Media organizations still waiting for rollout of key federal government support program

As the second of wave of COVID-19 , questions remain as to when a key federal government support for journalism will be rolled out.

The refundable journalism labour tax credit for media outlets was part of an aid package first unveiled by the Liberals in 2018, as the media landscape was getting smaller, newspaper editions were being cut and financially struggling outlets were shutting down for good.

The credit is calculated at a rate of 25 per cent of a newsroom employee’s salary, for a maximum credit of $13,750 per employee per tax year. Outlets eligible for the credit must first be designated a “qualified Canadian journalism organization” (QCJO) by an independent panel. The credit is retroactive to Jan. 1, 2019.

Despite being announced almost two years ago, it would appear the program has yet to start issuing payments for the credit for 2019.

Canadian Heritage Minister Steven Guilbeault had said in May that the first eligible news organizations would learn if they qualify for the credit this past spring, and that payments would follow in the summer.

However, media advocacy organizations say they’re unaware of any outlet having yet received a payment. The groups also say it’s unclear just how many outlets have received the QCJO designation.

Criteria that an outlet must meet for the designation includes being a corporation, partnership or trust operating in Canada, engaged in the production of original news content and which employs at least two journalists.

Guilbeault’s office referred questions about the tax credit this week to the Canada Revenue Agency, which told the Star in a statement that QCJO designations are now being issued, but that provisions in the Income Tax Act prevent the agency from disclosing who has applied for, received, or been denied a designation.

The agency did not respond to questions as to when the panel actually started approving QCJO designations, or when payments would be issued.

“While we’re seeing things being cut to the bone — and there’s very much a sword of Damocles hanging over the industry right now — we’re trying to figure out what the best course of action is, because we don’t have a lot of details at this point, from the government, and from others,” said Brent Jolly, president of the Canadian Association of Journalists.

“Sometimes I worry that it’s paralysis by analysis…That at the end of the day, it’s ultimately journalists and the public’s right to know that are the ones most compromised by the lack of action.”

The COVID-19 pandemic has exacerbated the problems of an industry, particularly newspapers, that has struggled for years with declining advertising revenues, while at the same time media outlets are being relied on more than ever by the public.

Since the first wave of the pandemic hit in March, 24 community newspapers have ceased publication, while about two dozen more are temporarily closed, said April Lindgren, a journalism professor at Ryerson University. Two private radio stations have stopped operating and 11 daily newspapers have cut one or more of their print editions, she said.

Lindgren is the principal investigator with the Local News Research Project, which collects data for the COVID-19 Media Impact Map for Canada, along with online trade publication J-Source and the Canadian Association of Journalists.

“Yet again we’re seeing local media in particular being in trouble at a time when never before has their role in informing the public about what are essentially life-and-death situations been so important,” she said.

“That’s why it’s so disturbing because you won’t find out about what’s happening in the intensive care unit of your local hospital by watching a national news report. You need local media to make those calls and ask those questions.

“To give people that information so they can make informed decisions about whether they want to send their kids to in-person classes or study online, or whether their elderly relatives are going to be OK in local nursing homes.”

At least for this year, media organizations, along with many other businesses across the country, have been able to tap into the federal government’s emergency wage subsidy, brought in due to COVID-19 to help cover a portion of workers’ wages.

(Torstar, the parent company of the Toronto Star, is among the recipients of the subsidy.)

“It’s been the lifeline for many newspapers across the country this year,” said Bob Cox, chair of the Canadian News Media Association.

Guilbeault’s office highlighted in a statement to the Star on Friday that the government had also brought in a one-time $45-million special measures program due to COVID-19 to help digital, small circulation and free magazines and community newspapers.

While grateful for the wage subsidy and other one-time supports, Cox said media organizations would like clear timelines from the government regarding the journalism labour tax credit.

“Here is our biggest fear: It’s that next year we are going to go forward and we’re not going to have wage subsidies, and we’re not going to have special measures, and the kind of support we got this year for COVID,” he said. “And we need (the tax credit) working by then so that we can go back to something approaching normal.”

Guilbeault is also continuing to monitor work in Australia and France around possible measures to make digital giants like Facebook and Google pay media outlets for using their content, his office said Friday. The minister discussed the issue with his French and Australian counterparts this week, and is considering options for a made-in-Canada framework.

Jacques Gallant is a Toronto-based reporter for the Star. Follow him on Twitter: