Think tank warns federal subsidies turning MSM into government arm

Expanding subsidies risk transforming Canada's mainstream media into a government-controlled entity, an Ottawa think tank warned Thursday.

Blacklock's Reporter says the Macdonald-Laurier Institute, in a report by former Calgary Herald publisher Peter Menzies, argued that growing reliance on federal funding is damaging journalism’s credibility and independence.

“Soon, with very few bold exceptions, the entire news industry will essentially be a Crown corporation if not a department of government,” stated the report, Changing The Channel.

“This is no way to maintain public trust in journalism or freedom of the press.”

The report pointed to the lack of critical coverage of media subsidies within organizations benefiting from them.

“This strongly suggests subsidized media are willing to suppress debate of certain legislation when it is in their self-interest to do so,” it said.

Menzies, a former vice-chair of the Canadian Radio-Television and Telecommunications Commission, highlighted the growing financial dependence of Canadian mainstream media outlets on government funding.

In 2019, Parliament approved a $595 million bailout package for newsrooms, initially set for five years. Instead, in 2023, cabinet expanded subsidies with an additional $129 million, extending funding beyond the next election and doubling yearly payroll rebates to $29,750 per newsroom employee.

The CBC, Canada’s largest newsroom, was excluded from payroll rebates but saw its federal grant increase to a record $1.4 billion annually. Then-CEO Catherine Tait testified before the Commons heritage committee last November that the broadcaster needed an additional $400 million to $500 million.

The report called for a complete phase-out of media subsidies, including the CBC’s English-language operations, over 24 months.

“A subscription-based system would not only provide financial independence but also establish a direct, accountable relationship between the CBC and Canadians,” Menzies wrote.

“Ultimately, this approach would promote healthier competition within the media landscape.”

Menzies argued that increasing financial dependence on government support is eroding public confidence in journalism.

He previously testified before the Commons heritage committee in 2019, warning that subsidies damage media credibility.

“The more government assistance news media gets, the more broken the relationship with readers becomes,” he said. “The more that relationship is broken, the more subsidy will be required.”

A 2023 Statistics Canada report found that Canadians rated news media as less trustworthy than politicians, judges, educators, or police. When asked, “How much confidence do you have in the Canadian media?” only 31% of Canadians said they had a “good or great deal of confidence,” according to the Canadian Social Survey.

The Western Standard refuses to accept government bailout money.

Disclosure: Menzies is a member of the Western Standard Editorial Board.