News media bailouts short on transparency
Full costs to federal treasury remain unreported
Members of a journalism panel who decide which Canadian newsrooms have the government’s seal of approval have billed taxpayers at least $243,000 for their work.
Internal records from the Canada Revenue Agency, obtained through the Access to Information Act, show the part-time members have together drawn an average of $47,000 annually in pay for the last five years, plus $8,000 in travel expenses for one Ottawa meeting in October 2023.
Additional costs to produce their annual reports, along with some administrative support, have likely pushed the total bill to more than a quarter of a million dollars to date, the documents show.
The Independent Advisory Board on Eligibility for Journalism Tax Measures was created by the federal cabinet in March 2020 to certify which newsrooms applying for newly created tax breaks meet a government test of legitimacy.
Panel membership can range from three to seven persons each year. To date, almost all have been former journalists. Most are paid a per diem of between $275 and $325 for their work, except for the chair and vice-chair who earn between $375 and $450.
There’s currently a full slate of seven members, under chairperson Colette Brin. At the highest pay rates, that panel would cost taxpayers $2,525 for a full-day meeting. In 2023-24, the group met 18 times virtually and once in person, says their latest annual report.
The government has said its journalism bailouts would be transparent, but the pay and expenses of the expert panel have not been proactively posted by the host department, the Canada Revenue Agency. The agency said it does not track the cost of the salaries of public servants in its Journalism Division for the time spent supporting the panel.
The access-to-info release package (A-2024-188283) is posted here:
The panel acts as gatekeeper, briefing the national revenue minister on which newsrooms are “qualified” to receive a trio of tax breaks, announced in the 2019 federal budget as a $595-million, five-year package.
The bailouts have come under fire from academics, think tanks and even some journalists who say government handouts compromise news reporting, introduce bias, and undermine public trust in the media’s work.
At least one group, Rebel News Network Ltd., has gone to court after being denied status by the panel. Rebel News is appealing a Federal Court decision (Docket T-1319-23) from last September that upheld the panel’s finding that it was not an eligible news organization for lack of original content.
The most generous of the three programs supported by the panel subsidizes the salaries of journalists, by up to 35 per cent. Another allows not-for-profit newsrooms to acquire a kind of charitable status in order to issue tax receipts to donors. The third gave consumers a modest annual rebate for subscribing to digital news publications in Canada.
Reporters subsidy: Finance Canada estimates the first program, the heavily used labour tax credit, has cost $275 million to the end of 2024, and will cost another $70 million in 2025. The money has benefited more than 400 claimants, including at least 116 corporations, but government provides no details about recipients. The program has been extended to 2029.
The labour subsidy has a “lack of transparency” because of its “limited public visibility into who’s benefiting, how much has been spent on the program, and whether it’s actually creating net jobs,” an independent U.S.-based study concluded.
Near-charities: In the second program, 11 non-profit news organizations – most of them in Quebec – are currently registered as near-charities or “qualified donees,” able to receive donations and issue tax receipts. The Narwhal News Society, based in Victoria, B.C., and Winnipeg’s Presse-Ouest Ltee, are the only news non-profits outside Quebec. (An Ottawa-based group, New Canadian Media, lost its registration last fall after going out of business.) Government does not publish details of the value of these tax breaks.
Digital subscription tax credit: The third program, the digital subscription tax credit, ended on Dec. 31 after five years, and was considered the least impactful of the three. The program rebated 15 per cent of the cost of a digital subscription, to a yearly maximum of $75.
A study suggested the rebate primarily benefited existing digital subscribers rather than attracting new ones. Finance Canada has estimated the total cost to the treasury at $80 million since 2020. Some 191 digital publications were registered in the rebate program just before it shut down last month, as scheduled.
Local journalism fund: A fourth subsidy, the Local Journalism Initiative, is a grant program rather than a tax break. Administered separately by Canadian Heritage, the fund currently funnels about $19.6 million each year through six organizations who hire journalists in small, underserved communities, dubbed “news deserts.”
Among critics of the bailouts is Conservative Leader Pierre Poilievre, whom the polls suggest is poised to form a government later this year. “Canadian Conservatives do not believe in giving tax dollars to media outlets,” Poilievre said last year.
In the 2021 federal election under then-leader Erin O’Toole, the Conservative party vowed to kill the bailout program. Poilievre has been less categorical but his comments have suggested the bailouts will be a target - including the Local Journalism Initiative - should he form a government.