The Department of Canadian Heritage is introducing a new media subsidy – for university students. The department, after warning of the bankruptcy of the nation’s largest newspaper chain, said it must “encourage the next generation of young Canadian publishers.”
“We plan to target universities as part of our communications strategy,” Deputy Minister Graham Flack wrote in a memo. The March 10 document was obtained through Access To Information. “This is an example of an experimental push,” wrote Flack.
The department in an earlier report contemplated the bankruptcy of Postmedia Network Canada Corp. and its Sun tabloid subsidiary. Collapse of the chain would leave 28 cities without a daily newspaper, authorities noted.
Postmedia last year reported $263.4 million in losses with corporate debts totaling $671 million. “Public and industry concerns will probably grow in light of future closures, and the number of voices requesting government actions could become significant,” said the report Newspapers In Canada: The New Reality Of a Traditional Industry.
“Postmedia is burdened with high annual interest payments which restrict cash flow and place it in a difficult financial position,” Newspapers said. “This has raised fears among experts that it may not be able to repay its substantial debts, the bulk of which come due in 2017 and 2018, and that this could result in further restructuring or even bankruptcy.”
Thirty-seven print dailies have folded in Canada since 2008 including the Guelph Mercury, Halifax Daily News, Kamloops Daily News, Nanaimo Daily News and Prince Rupert Daily News.
In the newly-disclosed memo to Heritage Minister Mélanie Joly, staff said an existing subsidy program for other media – including magazines and weeklies – should be expanded in 2017 to include campus website start-ups that use crowd-source funding. “The changes will increase the number of new applicants by opening the program to digital periodical start-ups; recognize the emergence of crowdfunding by prioritizing applicants who seek to generate revenues through this platform; encourage different applicant behaviour to collect more accurate information by employing behavioural science; and reduce entry barriers to the program by applying more flexible criteria and reducing eligibility thresholds within the current terms and conditions.”
The current Canada Periodical Fund pays out $74.5 million annually in grants to periodicals like Maclean’s ($1.5 million), Chatelaine ($1.5 million) , Reader’s Digest ($1.5 million) and TV Week ($1.04 million).
The department proposed a new subsidy “targeting youth by encouraging university students to participate in the next field of digital periodical publishing and contributing to the next generation of Canadian publishers,” said the memo Canada Periodical Fund Business Innovation Component. The memo did not disclose the costs of new subsidies.
Dailies’ paid circulation as a percentage of Canadian households has declined by more than half, from 49 percent of homes to 20 percent, in the period from 1995 to 2014, by official estimate. Employment in the industry has fallen 23 percent since 2006. A total 66 percent of Canadian dailies are owned by three publicly-traded corporations: Postmedia, Torstar and Transcontinental.
By Tom Korski 
