Fraser Forum

Let’s not subsidize journalism

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When the country’s financial and economic journalists gather in Ottawa Feb. 27 to be voluntarily locked up for several hours in the Ottawa Convention Centre to read (and try to digest) the federal budget, many will be wondering, more than usual, what’s in it for me?

That’s not new. They’re all taxpayers (journalist salaries are low but not that low). So they’re always curious about the budget’s impact on them personally. But recently there have been rumours the federal government may be open to some sort of newspaper fund that would, in a yet-to-be-specified way, provide financial support to journalism.

Parts of the industry, including a couple of its leading publishers, have been pushing the idea. Others disagree—strongly. The old adage that you don’t want to pick a fight with people who buy ink by the barrel may not carry so much weight in the digital age. (What would be the modern equivalent: “who push bytes by the billion?”) Still, Ottawa may want to hedge its bets on the declining influence of newspaper barons and come up with some kind of assistance package.

Personally, I can’t imagine a world without my daily fix of news and opinion. I assume there are lots of people out there like me, and so tend to think that in some way or other our demand for these things will end up being satisfied, albeit in formats and through delivery mechanisms we can’t yet anticipate and which, in fact, may only become evident once newspapers have suffered whatever their ultimate fate is to be.

But should our demands for news and opinion be supplemented with taxpayer dollars? Are we really performing a public service by reading about news in general and politics in particular? Yes, effective democracy requires that governments be subjected to close scrutiny. But it’s not clear the usual way of doing journalism these days contributes much to good government. Investigations and exposés typically involve “Isn’t that awful!” stories with the implicit or explicit admonition that governments should fix the outrage in question, preferably by the end of the week. Too often, they try to.

Probably because many Canadians aren’t prepared to believe they should subsidize their fellow citizens’ newspaper reading, recent industry lobbying has focused instead on the supposed unfairness of the tax treatment of publications. As an influential 2017 report from the Public Policy Forum put it, “A Canadian advertiser cannot deduct expenses when buying space in The New York Times but can when placing an ad on" That the ice is tilted is a basic unfairness anyone can understand. But in fact the industry’s complaint here is that the ice has been un-tilted.

A Canadian advertiser buying ads in any Canadian publication gets to deduct the cost of those ads as a business expense, as is only reasonable—they clearly are a business expense. But since 1965, in an attempt to encourage Canadian newspapers and magazines, that deduction hasn’t been allowed when the ad purchase was in a foreign magazine or newspaper—even though it’s still a legitimate business expense. Last century Ottawa deliberately tilted the ice. But the digital revolution has now partly un-tilted it. What the industry wants Ottawa to do is re-tilt it and make ad buys ineligible in foreign digital publications as well.

Whatever the merits of the case, people who favour tilting things to their own advantage usually get less public sympathy than those who favour level ice.

What does seem strange to many of us is that our digital purchases of foreign publications, including the New York Times, aren’t charged GST while our digital purchases of Canadian newspapers and magazines are. That does seem a tilt worthy of elimination. Purchases of newly produced goods and services should be subject to sales taxes. But the money raised should go into general revenue, not a fund government somehow allocates to journalists, however deserving they/we may be.


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