March 22, 2019; National Post

Keenan Wellar is NPQ’s new point correspondent for Canada’s civil sector. He’ll be penning a periodic column called NPQ North to focus on trends and events above the border. Today, Keenan takes on the debates that have emerged around a new structure proposed for journalism organizations—one neither nonprofit nor for-profit.

The government of Canada released Investing in the Middle Class (Budget 2019) on March 19th. The introductory remarks tout progress to date on items like job creation (with an emphasis on programs for women) and support for families struggling with the high cost of living. These issues have been discussed previously with respect to the Oxfam Canada Report Card on Feminist Progress and the impact of the Trudeau government’s Child Poverty Reduction strategy.

Broad analysis of “winners and losers” lists those with student loans and first-time home buyers among those who have reason to smile, while those who were hoping for tax breaks—and/or edible cannabis products—aren’t pleased.

With two major exceptions (journalism and social finance initiatives, see below) the 464-page document was somewhat underwhelming with respect to news for non-profits and charities, but the budget did include significant funding announcements that particular organizations and sectors are celebrating:

  • An additional $9 million to charitable organization Indspire for education of First Nations, Inuit, and Métis students (only 11 percent of Indigenous peoples have a university degree versus 29.3 percent of the non-Indigenous population)
  • $12 million for a Phase II investment in Ready, Willing, and Able (RWA) a national employment program for persons with intellectual disabilities or Autism Spectrum Disorder (ASD)
  • Support for nonprofit science, research, and technology organizations like the Stem Cell Network ($18 million), Brain Canada Foundation ($40 million), Terry Fox Research Institute ($150 million related to cancer research), Ovarian Cancer Canada ($10 million), Genome Canada ($100.5 million), Let’s Talk Science learning programs ($10 million), and support from a variety of federal sources that totals close to $292.7 million for TRIUMF sub-atomic physics research.

A commitment for “up to $755 million” over 10 years for the establishment of a Social Finance Fund was referenced in November’s Fall Economic Statement, as well as $50 million to help non-profit and other social purpose organizations to “support more robust business planning, provide technical assistance and enable social purpose organizations to develop impact measurement tools to monitor progress achieved.”

The fund is broadly targeted to projects that will “have a positive social impact, such as reducing poverty, expanding employment opportunities for persons with disabilities, or building more affordable housing.”

The budget states that $100 million will be allocated towards projects that support greater gender equality by “leveraging existing philanthropic and private sector funds towards this purpose in order to help them reduce the social and economic barriers faced by diverse groups of Canadians of all genders” and specifies that a $50 million investment will be made in the new Indigenous Growth Fund.

In her NPQ Voices from the Field article of a year ago, “Social Impact Bonds and the Search for Ways to Finance Public Sector R&D,” Bhakti Mirchandani discussed social finance and social impact bonds, and their mixed results to date, noting that the approach is still in its infancy. “While the future is uncertain, there is reason to believe that social impact bonds may help generate increased investment in the development of improved service delivery systems going forward.”

The government of Canada’s dabbling with social finance might have generated more headlines were it not for a spate of new proposals for new tax breaks and other supports for journalism and media organizations, effectively creating a new type of structure separate from current nonprofit corporations and registered charities: “Qualified Canadian Journalism Organizations.”

The budget describes three new tax measures designed to support Canadian journalism:

  • allowing journalism organizations to register as qualified donees
  • a refundable labour tax credit for qualifying journalism organizations
  • a non-refundable tax credit for subscriptions to Canadian digital news

Putting $595 million toward promotion of journalism is certainly welcome news in a general sense for journalists and media organizations, given that nearly 270 local news outlets have either closed or merged in 194 communities across Canada since 2008, according to Ryerson University’s latest tracking data (February).

As Steve Dubb reported for NPQ last year, Canada lags far behind the rising wave of nonprofit journalism in the United States. These highly anticipated budget announcements may spark significant growth in this area, but process issues—and debate about the merits of the overall strategy and its tactics—are already getting heated.

Heritage Minister Pablo Rodriguez’s statement that “We are going to the root of the problem and creating concrete measures to support Canadian newspapers, big and small” drew quick reaction from major players, like the declaration of unfairness by the Canadian Association of Broadcasters.

“If the government is truly committed to recognizing the vital role media plays in helping citizens make informed decisions, it must find a way to include radio and television news outlets in this tax-credit regime,” said the association’s board chair Lenore Gibson, who is also a lawyer for Bell Media Inc., owners of multiple radio, television, and digital media outlets.

More neutral observers like Chris Waddell, professor at Carleton University’s School of Journalism, mused about whether this is a case of throwing good money after bad.

“We’re in a situation where, in fact, government is subsidizing the least likely people to succeed in the current format,” said Waddell. “My question is why? To what end?”

The issue of federal funding for news organizations has not only divided Canada’s media community, but has generated accusations about inappropriate influence, with the opposition party Conservatives arguing new funding to the media should not be awarded in an election year.

“The media should be independent from the government,” Conservative MP Pierre Poilievre said. “We should not have a situation where the government picks a panel that then decides who gets to report the news. That is very dangerous.”

New Democratic Party leader Jagmeet Singh suggested the federal government could take a more direct approach in supporting local media.

“Right now, the government spends most of its advertising dollars with web giants like Google and Facebook. If they were to spend that money in local media, in media in Canada, that would be a better use of our public dollars.”

CWA Canada—certainly not a disinterested party, given they represent 6,000 workers in the media industry—perhaps did the best job of grounding the debate in a legitimate concern about the future of the country and its communities.

“The loss of local journalists is a serious threat to our democracy,” CWA Canada president Martin O’Hanlon said. “It means fewer journalists reporting on the stories that matter to communities—and leaves almost no one to hold local politicians and powerful interests to account.”—Keenan Wellar