Paul Schratz - Life In The Schratz Lane

If it’s OK for CBC, why not for others?

Voices Nov. 29, 2018

As news organizations struggle to stay alive, government tax credits may be a reasonable solution to help transition to newer models of journalism, writes Paul Schratz. (Wikimedia Commons image)

The federal government’s proposed tax package to support Canadian journalism is being largely presented as a minefield for any news organization that dares to touch it. The $600-million tax aid package will give tax credits to qualifying news organizations and digital news media subscribers, as well as charitable tax status to non-profit news organizations.

The response has been almost universally negative from those outside journalistic circles, as well as a few on the inside (Andrew Coyne, National Post). Their fear is that this corporate welfare, once accepted by journalists and publishers, will make them reluctant to bite the hand that feeds them.

It’s a valid concern. For years the CBC has been perceived as beholden to government, especially those more inclined to throw funding its way.

Here’s where my struggle comes in. I’m not a big fan of corporate bailouts. But I also don’t like seeing Canadian journalism in its death throes. If some tax breaks, as opposed to $1 billion in annual subsidies à la the CBC, can help with the transition to new models, is that so terrible? News organizations, like any corporation, already write off costs of doing business. Advertisers can currently claim expenses for TV, radio, and newspaper advertising. Letting readers claim digital subscription costs or allowing a newspaper tax credits to offset some costs to keep it alive just might be something I can hold my nose about.

I realize there’s a potential accusation of conflict of interest here. The B.C. Catholic receives annual funding through the federal government’s Aid to Publishers – Canada Periodical Fund, which in our case reduces our Canada Post costs of mailing tens of thousands of issues per week.

Yet The B.C. Catholic’s acceptance of federal funding hasn’t resulted in our pulling punches when it comes to criticizing Ottawa. We’ve gone after various governments, regardless of who was in power, on issues ranging from the Canada Jobs attestation to the redefinition of marriage.

Are government tax credits an ideal solution? Hardly, and I hope we see other models develop. For example, Civil Media, a two-year-old startup company that is trying to develop the next model of journalism using blockchain technology. Civil has put together more than a dozen digital community newsrooms that will be funded through cryptocurrency collected from supporters.

Civil’s hope is that cyber newsrooms, rather than financially benefiting company shareholders who are more interested in profits than journalism, will serve up independent journalism without fear of upsetting traditional stakeholders like advertisers or the politically powerful.

Civil has gotten off to a rocky start, with some of its journalists saying they’re not being adequately compensated (paid) for their contributions. But as Civil tries to build on its relationship with readers by incentivizing quality journalism, it has attracted at least one noteworthy partner. The Associated Press wire service is now collaborating with Civil to make AP news content available for use by Civil-based newsrooms.

Civil is not alone. A social media site called Steemit offers rewards to contributors who produce content that gets upvoted by users.

Meanwhile, Canada isn’t alone in looking at tax measures to support news organizations. The U.S., Britain, and Australia are all looking at various types of government support for struggling news organizations.

Journalism isn’t free, and those who say we shouldn’t help reduce the burden of producing it may get the pure playing field they desire, with few players on it.

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