Ottawa To Announce Support For Canadian Media In Fall Economic Update

The federal government is expected to announce new measures to help Canada's struggling news industry when Finance Minister Bill Morneau delivers his fall economic update this Wednesday.

The measures will be designed to help journalism remain viable after years of shrinking advertising revenues that have resulted in major cutbacks at newsrooms across the country, and, in some cases, the closure of news outlets.

In last winter's federal budget, Ottawa committed $50 million over five years to support local journalism in "underserved communities." The feds also pledged in the budget to search for additional ways to support Canadian journalism.

Federal officials have raised concerns that the erosion of journalism could undermine democratic institutions throughout Canada -- from municipal councils to provincial legislatures to Parliament itself.

In its 2018 budget, Ottawa promised to take a closer look at potential models that will enable private donations and philanthropic support for "trusted, professional, non-profit journalism and local news." The government said eventual steps could include new ways for Canadian newspapers to innovate and receive charitable status for not-for-profit journalism.

Internal government documents obtained by Canadian Press note that overall operating revenues in Canada`s news industry fell to $3.2 billion in 2016 from a peak of $5.5 billion in 2008. The decrease includes a steep drop of 34% between 2012 and 2016.

The documents said the decline has been caused by falling advertising revenues and, when it comes to online ads, noted how Canadian news outlets have struggled to compete with giants such as Facebook and Google, which scoop up about 80% of the digital business. The number of daily newspapers in Canada is now down to 88. A decade ago, there were 139 such newspapers.

A report last year from the Public Policy Forum called for a sales tax on foreign companies selling digital subscriptions in Canada, which would serve as a fund to help finance reliable news and information with $100 million in federal seed money, a new "local" mandate for news agency The Canadian Press, and changes to the CBC's online advertising structure.