We all agree: news journalism subsidies are necessary.

July 17, 2024

Last week the conservative opinion website The Hub collaborated with the pollster Public Square to publish a public opinion survey in support of three public policy recommendations, posed as an alternative to the Liberal government’s program to address market failure in Canadians news.

The article and poll summary is titled “DeepDive: New polling shows government funding of the news industry is eroding Canadians’ trust in the media.” 

Despite the gloomy headline it’s a refreshing dialogue, more constructive than the position taken by The Hub’s preferred candidate for Prime Minister, Pierre Poilievre. If elected, Poilievre plans to “defund the CBC,” repeal the 2019 federal aid to written news journalism, “kill Bill C-11” (which authorizes mandatory subsidies to broadcasting news), and kill Bill C-63, the Online Harms legislation. So much killing. 

Less bloody minded, The Hub proposes to replace Ottawa’s $35 million per year Journalism Labour Tax Credit by greatly expanding its companion Reader Subscription Tax Credit. The Hub also recommends making for-profit news organizations eligible for charitable donations and converting the CBC into a national wire service for local news. 

The first two recommendations are built on the Public Square survey, of which six of the 24 questions and answers have been published while the other eighteen have been withheld. [Note: Public Square has clarified that the “24 questions” include sub-field responses to the six questions in total.]

The poll identifies a lack of trust in subsidized media, the jump off point for The Hub recommending a larger role for private choice in allocating subsidies. In a nutshell, the polling results suggest a low level of public awareness of the existing Labour Tax credits that subsidize journalist salaries but, at least hypothetically, a real public concern about the risks of government funding of news journalism. 

This leads The Hub to recommend that policy makers prioritize subscription rebates and charitable donation write-offs as better public subsidies than the federal Labour Tax Credit’s that currently reimburses news outlets for 35% of journalist salaries.

Because The Hub anchored its recommendations in the Public Square poll, the survey deserves a closer look. Where I am going with this is to suggest that regardless of the merits of the recommendations, building them on the foundation of a poll on public trust in media neither advances nor undermines them. Declining trust in media and other civic institutions is a decades-old trend, an intractable problem that has very little to do with news journalism. 

The Public Square survey is thankfully not one of those polls torqued with loaded questions about the federal government’s media strategy (I could point to a few others).

But it’s the nature of the polling beast that questions drive answers. When it comes to detailed policy issues, it’s difficult for a pollster to phrase a question for a broad and relatively underinformed public audience that isn’t interpreted by respondents in very different ways.

trust in news outlets

When respondents were asked by Public Square to choose a general statement that comes closest to “your views of the news in Canada,” the available answers included “most of the news is biased,” “I don’t get the truth from mainstream news,” or conversely “I know I’m getting the truth from mainstream news.”

Putting aside the fact there is no statement querying public trust in “non-mainstream news,” the trouble with the question is that it’s like sticking a thermometer in the ocean and declaring the results to be a weather report. Does anyone really expect to get “the truth” from all news stories and all news outlets all of the time? 

By contrast, when Reuters polled on “trust in media” it carefully asked if respondents “think you can trust most news, most of the time.” The results, while far from encouraging, ran about 20% higher than the Public Square findings. 

Another vexing topic probed in the Public Square survey is public attitudes towards government funding of news journalism (despite important funding details and newsroom practices enforcing editorial independence not being well known).

On that point, Public Square asked respondents to choose from among a number of key statements such as “government paying journalist salaries” and “I trust the government to decide which specific news media qualifies for funding.” (Emphasis added).

I’m betting 99% of Canadians have no idea that the gatekeeper of subsidies under the federal Qualified Canadian Journalism Organization program—including The Hub’s favoured Reader Subscription Tax Credit— is not a “government” official but in fact an independent advisory board of journalism professors and retired journalists. That independent board has successfully avoided controversy since the program began in 2019. Its denial of QCJO status to Rebel News is the exception that proves the rule of its independent gatekeeping.

But putting aside my nitpicking, the most important thing I can say is that the decline in trust in media is as about as relevant as whether teenagers respect their parents. Declining trust is decades old, world-wide, applies to all civic institutions and is far worse in the United States which sports no public subsidies to news journalism at the federal level with only a handful of state programs. 

To hammer that nail, consider that the Canadian decline in trust in media began well before the Trudeau Liberals’ first foray into news subsidies in 2019. No, the decline in trust problem is better understood as a rise in civic alienation problem, and a deeply concerning one.

But let’s get back to the recommendations.

in us we trust

In recommending news media subsidies channeled through readers and donors, I believe that The Hub grasps that the task of any successful program of publicly supported news journalism is to engage the 85% of Canadians who say they won’t pay for news. Yes, that includes some news junkies who perversely insist on free content. But the cohort we must be most concerned about is the vast majority of Canadians: casual news consumers who will never pay but must remain engaged in our liberal democracy.

That’s why The Hub’s recommendation of juicing the Liberals’ Reader Tax Credit is appealing. The idea is to put government dollars in reader pockets so that individual Canadians choose which news outlets get subsidized while getting their own content for free. 

The current version of the federal Reader Tax Credit is anemic: it’s non-refundable at 15% of paid subscription dollars, capped at $500 in subscriptions (i.e. reducing income taxes owed by $75). The Hub would enhance it and make it refundable like political contributions. In this way, casual news consumers, presumably heavily represented among low-income earners, would be incented to take out a subscription.

It’s an appealing public policy tool with its emphasis on private choice. There are some design challenges that come with it. Will Canadians in this target audience be patient enough to wait up to 18 months for their rebate? What about Canadians that don’t earn enough to bother filing income tax returns? It would help if Revenue Canada would publish a demographic analysis of who has been claiming the current subsidy for the last five years.

There’s one other thing we should be clear-eyed about when advocating for reader tax credits. While reader subsidies are likely to reward editorial excellence, they will also reward partisan reporting of the news. Reader subsidies will weaponize the existing practice of newsroom editors chasing and retaining readers by publishing content that appeals to their prejudices, not necessarily their eagerness to reconsider them.

donating to journalism

Aside from rejuvenating the Reader Tax Credit, The Hub also recommends exploiting the Liberals’ 2019 changes to the tax code that made donations to non-profit news organizations eligible for income tax deductions. The recommendation is to extend this charitable status to for-profit news organizations. This is currently the practice in the United States.

Pursuing more donor dollars is worth considering. La Presse has had great success with it, soliciting small donors while keeping subscriptions free. 

But as many of the Public Square survey respondents would undoubtedly point out, donations are a significant funding source that might influence the independence of news reporting. Beware the angry philanthropist donor! Again, maybe that’s just a design challenge: like political contributions, charitable funding of news journalism could be capped at modest donations.

At the end of the day there is some public policy experimentation that can be usefully carried out over the next few years for funding news journalism, searching for the right mix of subsidies that limit the dominant influence of any one source.

On that note, allow me to put in a good word for the existing Journalism Labour Tax credits, the direct salary subsidy claimed by news organizations that have been vetted by the QCJO adjudicators as engaging in professional journalism covering original news. 

The headcount subsidy is a reliable policy tool in an industry that has always hired journalists on merit in a competitive labour market; jealously guarded newsroom independence from publishers and advertisers; and given great respect to the autonomy of the journalist within the newsroom hierarchy. And I agree with those who believe in rigorous newsroom standards, including binding commitments of news organizations to professional standards.

a CBC news wire

Then there’s The Hub’s third recommendation: don’t defund the CBC. Rather, re-cast its mission critical into a mandate to cover local news as a publicly owned news wire service. That’s a riff on a similar proposal made last year by Peter Menzies and Konrad von Finckenstein. My only hesitancy about this proposal (as a full-throated fan of public broadcasting) is what does that mean for the rest of the CBC’s news and entertainment programming?

One of the things that The Hub’s proposal doesn’t address is television and radio news, especially local TV news. Television remains the number one choice for Canadian news consumers.

Up until its recent tithing of US streamers to support broadcast news, the CRTC’s approach has been to mandate Canadian TV networks to produce news, at a mounting and considerable loss, while requiring cable companies (and now streamers) to subsidize non-network television stations. Television companies are also not eligible for federal QCJO payments, even for their news websites. Given the leading role that broadcasters play in our news ecosystem, The Hub might have weighed in on this as well.

What’s positive about The Hub’s venture into the policy debate about market failure and subsidies in news journalism is that we are now debating the “how” rather than the “if” of a public policy response. I hope that means we are getting past the fantasy that there’s a full-fledged market solution hiding behind the nearest bush, if only we could stop public policy makers from propping up newsroom “grant farmers” and force them to innovate or die. 

All of The Hub’s proposals are subsidies and I congratulate them on their policy courage. As for role of market solutions, some of the most successful innovators in the Canadian news scene —the Globe and Mail, La Presse and Village Media come to mind— are in receipt of subsidies. This hasn’t stopped them from innovating en route to achieving financial sustainability.

As a final word, let’s not forget about our festering “trust in news” problem. As I suggested, the root of the problem is rising social alienation and is beyond the ability of newsrooms to solve on their own.

If we want to get at declining trust in media in a direct way, we would do well to expend public resources on educating young people on how news journalism is made and how to view it with a critical eye. 

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