Feds face new pressure to help hobbled newspaper industry amid more shutdowns

Ottawa is coming under fresh pressure to find a way to save the ailing Canadian newspaper industry, although the Liberals remain steadfast in their argument that the solution lies in the transition to digital platforms and more viable business models.

Torstar Corp. and Postmedia Network Inc. announced Monday they will cut nearly 300 jobs as they plan to shutter more than 30 newspapers across the country, with most of the dailies and community weeklies affected based in Ontario.

"It's absolutely brutal," Canadian union leader Jerry Dias said Monday as he urged federal Heritage Minister Melanie Joly to protect print journalism.

Earlier this year, a major report from the Public Policy Forum called for a sales tax on foreign companies selling digital subscriptions in Canada and a $400-million fund to help finance reliable news and information. The Canadian Press participated in the roundtables and research.

And in June, the House of Commons heritage committee also issued recommendations on how to save the industry, including a five-year tax credit to compensate print outlets for a portion of their digital investments.

But in September, Joly unveiled a cultural strategy that was criticized by industry experts for lacking measures that could have given a boost to struggling newspapers across Canada.

At the time, Joly said Ottawa had no interest in bailing out industry models that are no longer viable, and would instead focus on supporting innovation, experimentation and the transition to digital platforms.

Asked Monday if news of the closures had encouraged her to rethink her approach, Joly reiterated that the government would provide support in the coming months for local media as they continue to shift to web-based models.

"Of course, I'm sad to hear about these local closures and my thoughts are with the families affected," she said.

Canada Periodical Fund could help

She also noted the federal government invests up to $75 million annually in the Canada Periodical Fund, which includes support for local media.

A government source said the Liberals believe there is still a strong appetite for local news and that there could be a way for other local media companies to begin filling in the gaps.

The source, speaking on condition of anonymity in order to discuss matters not yet public, said the Liberal government is looking at modernizing the Canada Periodical Fund in ways that could help local news outlets, such as by moving away from funding based on paid print circulation, which does not account for a digital audience.

Helping print media out of a crisis does not have to be about propping up a failed business model, said Dias, the national president of Unifor and one of several prominent Canadian business leaders who took part in consultations on the future of the industry.

"If the government wants to have a thriving industry, if they want to have freedom of expression, if they want to have journalistic integrity, then we're going to have to find a mechanism to deal with it," Dias said. "You put money into journalism. That's what the issue is."

Media union CWA Canada, which represents employees at The Canadian Press, also urged the Liberals to take urgent action.

Ottawa-area Liberal MP Anita Vandenbeld called the closures — several of which will impact papers in the national capital — an unfortunate development that will impact democracy and make it more difficult for politicians and community groups to connect with locals.

Vandenbeld said that if there are solutions available to help the industry, the government should pursue them. But she believes the industry's challenges are a much larger issue that are part of a global trend.

"If there are solutions, then absolutely I think we should be doing what we can," she said. "But I think this is a much bigger, societal issue than individual papers."

'The barn is burning'

Conservative MP Peter Van Loan, who is the heritage critic for his party, said he thinks the newspaper chains are making a mistake by shutting down the local papers, but said the federal government should not intervene.

"When you have dynamic change, the answer is not to have government fund money to turn back the clock and try to keep an old model alive that doesn't work anymore," said Van Loan, whose own Ontario riding of York — Simcoe is also losing a local paper, the Bradford Times.

But his Conservative colleague Karen Vecchio, whose southwestern Ontario riding is losing the St. Thomas/Elgin Weekly News, suggested it might be a good idea for the Liberals to take another look.

"I think they have to make sure, at the end of the day, they are supporting smaller communities and this may be a way," Vecchio said. "I think they should look at it once again and see what's best."

New Democrat heritage critic Pierre Nantel urged the government to reconsider.

"Wake up," Nantel said. "The barn is burning."