Public subsidies essential to boosting media ecosystem, new study finds

The contrast could not have been starker between opposing sides of an important media debate this past week. Just as House of Commons committees in Ottawa were being double-teamed by anti-subsidies witnesses testifying to the perils of public funding for news media, a new international study has found subsidies to be an important determinant of news quality. The right-wing double-whammy first saw Sylvain Charlebois, also known as The Food Professor, testify last week before the Standing Committee on Procedure and House Affairs as part of its hearings into “civic resilience” in Canada. Then Peter Menzies, a senior fellow at the Macdonald-Laurier Institute, which is right-wing think tank, testified the same day before the Standing Committee on Canadian Heritage as part of its inquiry into the state of the journalism and media in Canada.

Charlebois complained that Montréal newspaper La Presse dropped his long-running column recently after he criticized media subsidies on social media. He announced his departure on X a few weeks ago, but he took the opportunity to amplify it during his scheduled testimony before MPs on Thursday. “I had publicly expressed as a citizen on social media about how public funding for private sector media could potentially influence editorial decisions,” he told them. “The reason they used to dismiss me was troubling.” La Presse said in a statement that it could not allow a contributor to undermine public trust in the media, and that Charlebois had “publicly attacked the integrity, independence and rigour of journalists.”

Charlebois’ own integrity has been questioned over the years, raising the possibility that he is using his cancellation by La Presse to score political points. Calgary-based blog The Orchard noted in 2023 that Charlebois defended Loblaws without disclosing that he once received funding from its owning Weston family and that he has regularly defended supermarkets from charges of profiteering. “Charlebois can always be relied on to provide PR for Canada’s largest grocers,” quipped journalist Jeremy Appel. A 2024 investigation by the National Observer found that while Charlebois claimed he has no political agenda, observers noted how often his criticism of the since-repealed carbon tax bolstered Conservative talking points. “He has lent great credibility to the anti-tax movement to include food pricing,” said Katrina Miller, executive director of Canadians for Tax Fairness. One un-named official with Environment and Climate Change Canada quipped that his positions “often conveniently compliment Conservative party narratives.” Charlebois’ prominence, which in 2024 alone included more than 90 columns in Postmedia newspapers and at least a dozen appearances on CBC, has earned him speaking engagements across the country, the National Observer noted. His resume by then boasted more than 1,000 articles published since 2018, it added, while he had more than 40,000 followers on X (now more than more than 70,000) and his podcast was ranked 4.3 out of five on Spotify. Despite being ditched by La Presse, Charlebois still has a wide readership in daily newspapers, including the Montreal Gazette and the Toronto Sun, both of which are published by the right-wing chain Postmedia Network, which is 98 percent owned by US hedge funds.

La Presse has actually not published in print since 2018, when it went non-profit and digital-only with the help of a $50 million donation from its owning Power Corporation of Canada to a new “social trust” that now publishes it. It has made a huge success of its innovative tablet app by including video ads that can’t be skipped or blocked before readers get access to its free content. Within a few years, La Presse had a monthly average of nearly four million readers, a $40 million reserve fund and rising ad revenues. It also gained charitable status as a Registered Journalism Organization enabled by 2019 changes in federal legislation allowing newspapers to issue tax-deductible receipts in exchange for donations. A La Presse executive announced in 2024 that it had posted double-digit profit margins for the previous four years, thanks in part to donations from readers that hit $8 million in 2023. “We have about 60,000 donors,” said François Cardinal. “However 75 percent of our revenues come from advertising still today.” As a result, noted The Hub, La Presse has bucked the national trend by hiring nine new journalists to expand its regional coverage, and has even opened a Washington bureau.

As a former editor and publisher of the Calgary Herald, Menzies’ conservative bona fides are beyond question, but his appearance before MPs last week shows he is now less a journalist than an advocate. He is extremely prolific on behalf of the Macdonald-Laurier Institute, as he publishes a Substack blog and writes for publications ranging from the Hill Times to the Epoch Times. He is a particular favourite of The Hub, which is published by the conservative think tank Centre for Civic Engagement, where he writes regularly and also appears on its biweekly media podcast Full Press. I have chronicled his incessant attacks on media subsidies, which have included articles paid for by the Digital Media Association of foreign streamers, which are now required under the Online Streaming Act to contribute five percent of their revenues to subsidize Canadian broadcasters.

In his Zoom testimony to MPs, Menzies derided media subsidies as “golden handcuffs” and “hospice care” for media companies. “Most journalists are now reliant on the corridors of power they are expected to patrol on the public’s behalf,” Menzies claimed. “Unless significant changes are made, that dependence is only to grow stronger as the list of organizations asking for more money grows and grows.” Government subsidies for news media were introduced in 2019 as part of a five-year $595 million package that included charitable write-offs, a 15 percent tax credit for digital subscriptions and up to $13,750 in payroll tax credits to news media per journalist, which were extended for another five years in 2023 and increased to a limit of $29,750. Menzies claimed to MPs that government subsidies, which were boosted this year by a promised $100 million annually from Google under the 2023 Online News Act, have resulted in news being viewed with increasing suspicion by the public and have suppressed investment by innovators looking to create sustainable digital ventures.

But public subsidies for news have worked well in other places, most notably in Scandinavia, where newspapers and broadcasters have been subsidized for more than 50 years, and a new transnational study by scholars in three countries shows that they result in higher quality news. “Even partial public funding, in the form of subsidies to newspapers or digital outlets, contributes to greater provision of public service information,” write the authors of the new book How Media Ownership Matters. “In contrast, primary reliance on advertising funding, most often linked to stock market-traded ownership, is associated with the lowest proportions of public service information in our research.” The book turns media ownership research on its head by focusing on diversity of ownership form rather than on concentration of corporate ownership. Media critics have pointed to ever-increasing media ownership concentration since Ben Bagdikian’s landmark 1983 book The Media Monopoly warned of its perils, but it is only one facet of ownership. “We can deepen our understanding of concentrated media power by paying attention to ownership forms,” write Rodney Benson, Mattias Hessérus, Timothy Neff and Julie Sedel, who point to research that shows US media actually have low ownership concentration but are highly concentrated in form (Canadian media ownership concentration is much higher). “The largest US news websites are all stock market-traded,” they note, “whereas the dominant media in France and Sweden are more evenly distributed across forms, including private, civil society, and public.”

Their analysis of the form and content of news media in these three countries, supplemented by more than 100 in-depth interviews with media executives, shows that public service media provide the best news coverage. “Public media offer a unique means of combining quality and accessibility,” they write. “Research suggests that the most market-driven media will produce the lowest proportion of public affairs news.” They point to “a progressive abandonment of public affairs news at US stock market-traded media outlets as the ‘shareholder value’ governance model has been widely adopted.” Countries seeking to fix their crisis in local news provision will need to examine different solutions, they conclude, depending on their circumstances. “No single ownership form or funding-audience adjustment strategy will be the magic bullet to solve all of journalism’s or democracy’s problems. Each has its civic and economic strengths and weaknesses.”

That’s why Canada’s recent move to provide subsidies to publishers is a step in the right direction. The problem is in their distribution, which was turned over to bureaucrats at the Canadian Radio-Television and Telecommunications Commission instead of to an arm’s-length body. The result has been the appearance of a government body handing out cash to journalists, which is bound to erode public trust. My proposal to give the subsidies directly to Canadians in the form of an annual media voucher to spend on subscriptions to the publications of their choice is set out in my 2024 book Tomorrow’s News: How to Fix Canada’s Media.

Marc Edge is a Vancouver-based freelance writer and the author of eight books.