Budget Officer Conducting Independent Analysis of Newsroom Subsidies

Parliamentary Budget Officer Yves Giroux waits to appear before appearing at the Senate Committee on National Finance, in Ottawa, on Oct. 25, 2022. The Canadian Press/Adrian Wyld

Parliamentary Budget Officer Yves Giroux is conducting the first-ever independent analysis of the subsidies provided to newsrooms in the wake of the government doubling payroll rebates to $29,750 per year for employees of approved news organizations.

Mr. Giroux has requested specific data for his analysis, which includes the number of newsroom employees benefitting from the rebate and their respective salaries, as first covered by Blacklock’s Reporter. A specific date for the release of this analysis hasn’t been set.

The decision to increase these rebates was announced in the Fall Economic Statement on Nov. 21, 2023, escalating the maximum rebate per employee from $13,750 to $29,750.

“The 2023 Fall Economic Statement proposes to increase the cap on labour expenditures per eligible newsroom employee from $55,000 to $85,000,” says the statement.

“It is further proposed that the Canadian journalism labour tax credit rate be temporarily increased from 25 percent to 35 percent for a period of four years. As a result, organizations would be able to claim up to $29,750 in eligible labour costs per eligible newsroom employee per year.”

News Media Canada, a prominent newspaper publishers’ lobby, had previously advocated for enhanced support under a program initially budgeted at $595 million.

According to Paul Deegan, CEO of News Media Canada, the financial situation for most news publishers remains dire.

“The financial situation for most news publishers is extremely challenging,” Mr. Deegan, wrote the Commons finance committee Sept. 15, 2023. “It will remain so for many in the short to medium term.”

Mr. Deegan has also proposed that Parliament offer tax credits to companies advertising in newspapers and suggested a significant increase in the Government of Canada’s advertising budget to $35 million annually.

However, the subsidies, first approved by Parliament in 2019, did not lead to any net increase in job creation, as per a 2021 briefing note from the Department of Canadian Heritage. The note highlighted the adverse effects of the COVID-19 pandemic on the industry, including significant job losses and newspaper closures.

Opposition Leader Pierre Poilievre has been vocal in his criticism of these subsidies, promising to repeal direct cash grants to media if elected.

During his 2022 conversation with “The Taxpayer,” a publication of the Canadian Taxpayers Federation, Mr. Poilievre articulated his stance against government bailouts.

“Frankly I am against all kinds of bailouts, not just for media,” he said.

“We need a market-driven media that benefits by subscriptions, advertising, sponsorships, and donations rather than government subsidies. I am against bailouts.”