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Business Leader Summer 2018
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Government walks away

by Dave Adsett

I was going to leave it alone - until the question popped up again at a local store.

The owners there are solid farm stock - hard working people, generous to others and tend to think long and hard about the world around them.

Last week I made a quick reference in my editorial to the seismic shift in the newspaper landscape when Postmedia and Torstar announced swaps and shuffles of their many titles. The intention of my column was to provide assurance to a senior who called in with a query about closures that the Advertiser was fine and looking forward to serving Wellington County residents well into the future.

For our friend behind the counter, that was a little too wishy washy. Not one to talk a whole lot on most days, he just dropped the bomb in the form a question: “Dave, are these guys not just getting rid of competition with all these closings?” He summed up in a sentence what dozens of bloggers, commentators and politicians spent days blathering about without ever reaching a conclusion.

Newspaper people are a competitive lot, but government actions and inaction have had a real dampening effect on the viability of legacy media.

Arguably the primary custodian of Canada’s heritage and culture, Heritage Minister Melanie Joly spelled out clearly what the Liberal government position was - “Our approach will not be to bail out industry models that are no longer viable. Rather, we will focus our efforts on supporting innovation, experimentation and transition to digital.”

This took industry insiders by surprise because up until that statement, ministry staff appeared to embrace the concept that strong newspapers are critical to a functioning democracy. As proponents for the news industry were ushered from the room, they were essentially told to deal with their problems and not count on the government.

Then it should have been no surprise to hear, a few short weeks later, that Postmedia and Torstar announced their deal.

Wishing to have her cake and eat it too, Minister Joly tweeted, “We know Canadians care about their local media and we will continue to support it. The decision to swap and shut down these community papers on the same day is cynical and disappointing. Our thoughts are with the hundreds of workers and their families affected by these closures.”

The hypocrisy of her statement is overwhelming considering her clear directive months prior was that the federal government will not “bail out industry models that are no longer viable.”

In all of my reading on the subject I have failed to find an instance where the industry asked to be bailed out. All newspaper industry leaders have asked for is some consideration to expand a current program and that the government quit picking winners and making losers when it comes to their advertising needs.

For example, although 72% of Canadians in a Totum Research poll believe government messages are best delivered by newspapers, the government continues to rush headlong into digital advertising with American firms like Google and Facebook.

Of the $30 million spent on government advertising this past year, a paltry $1,164,567 was spent in several hundred newspapers across the country. Adding insult to this injurious fact is these American firms do not remit HST on ad revenue earned in Canada.

The current Aid to Publishers Program (APP) last paid out $68.9 million. It was established initially to help with distribution costs. Of that figure, just $7.8 million was allocated to community newspapers. The balance went to magazines and specialty publications. The Ontario Farmer for example, (owned by Postmedia) received $666,196 for 2014-15. The Advertiser does not receive a cent from the APP, nor do daily newspapers that don’t qualify.

The federal government is not alone in taking precious advertising revenue away from newspapers.

The province of Ontario, despite the willingness of every single MPP our association members lobby to support local newspapers with ads, spends exponentially more with Facebook and Google each year. Last year, independent publishers in Ontario received an average of $122 per week in provincial advertising. That is a fraction of what was booked 10 years ago.

Times change and certainly the newspaper operations of today look vastly different than what they did a generation ago. I think most newspaper people share a sense of excitement with all of the tools available today to tell stories and relay news in different ways.

All of this, however, has a cost, and the cavalier attitude on the part of the federal government exacted its price last week with the mass closures across Ontario. Minister Joly was warned.

As for this publication, we thank our loyal advertisers, readers and faithful municipal governments that still place ads with us.

You make us strong.

 

December 8, 2017

 
 

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