Is Quebec’s $36 million promise to newspapers enough?

Publishers of Quebec newspapers have welcomed the acknowledgement of the industry's struggles, but is there still work to be done?

In his budget speech to the National Assembly of Québec on March 29, finance minister Carlos Leitão emphasized the importance of newspapers in the daily lives of Quebecers.

“The existence of a lively, diversified and high-quality print media sector is crucial for the vitality of our culture, but also for the health of our democratic way of life throughout Quebec, and particularly in the regions,” Leitão said.

That  speech was backed up with monetary support, with the Quebec government setting aside $36 million over five years for newspapers in the province.

Of that total, $12 million will be allocated to printing companies to help relieve the costs they have to pay to municipalities to help them recycle paper. According to the Fédération Professionnelle des Journalistes du Québec, the cost on printers “has increased sharply over the years.” While the current Quebec government wants this compensation to remain over the years, the $12 million will be used as a temporary grant to offset costs.

The remaining $24 million go toward helping with what the government calls the “digital transformation” of the province’s newspapers.

That money will be funneled into two different assistance programs, although the proportions of each program have not yet been announced. One will be aimed at “[strengthening] the local and regional information disseminated by community media,” while the second will be aimed at the province’s larger newspapers to “support and encourage print news companies to overhaul their business models and focus on digital technology.”

No specifics have been released on the structure and details of the assistance programs and Quebec’s culture minister is to announce details at a later date.

Luc Fortin, Quebec minister of culture and communications, told MiC in an email that the government is also recommending an increase in ad spend to local news.

“The local media are undoubtedly of great relevance to the communities they serve and efforts to upgrade their role are not discarded,” he said in a statement translated from French. “It is in this light that a government directive suggests that all ministries devote 4% of their advertising investment budget to investments in community media.”

Pierre-Elliott Levasseur, president of La Presse, said in a statement to MiC that the announcement is “excellent news for the entire industry,” and that the encouragement for legacy print organizations to shift to digital could give struggling companies the opportunity to turn business around the way it did when it shifted most of its editorial operations to digital.

“This is the process we launched at La Presse several years ago, which gave birth to the great success of La Presse+,” he said in a statement translated from French. “Today, we still have steps to complete our digital turn and this program is a concrete gesture that we welcome.”

Indeed, in its year-end financials for 2016, released last month, the digital newspaper reported an increase in readership of 40,000 tablet users in 2016, a jump of 18.7%. Levasseur has also said digital ad revenues are up, but as a private company he opted not to disclose specific figures.

Brian Myles, director of Le Devoir and a member of the Coalition for the Sustainability of the Information Media in Quebec (an advocacy group formed in 2016 to press the government for more support), provided a more mixed reaction. While he said in a statement delivered in French that the budget “marks a turning point in the history of relations between the written media and the government,” he also added that the amount is “insufficient to create the electroshock that we hoped for.”

Karine Courtemanche, president of Touché! told MiC that the intentions of the budget are reflective of the current state of the industry, and anything that helps media companies become more platform-agnostic gives more options to advertisers, citing La Presse+ as a great example of a newspaper that adapted to the change.

“For us, more than half of our revenues go to digital advertising and that trend is not going to change,” she said. “The more [newspapers] come in line with today’s consumers, the easier it is for us to support them and invest in the platform.”

But, she said, the balance of digital spend for the agency is still vastly weighted toward Silicon Valley tech giants, which she noted have advantages over local media companies. Various advocacy groups including Public Policy Forum and Friends of Canadian Broadcasting have proposed different amendments to the Income Tax Act to incentivize advertisers away from spending on those platforms, but no policy changes have been made in the area yet.

“The vast majority of our spend goes to Facebook and Google, which frankly do not pay taxes in Canada when the local media partners have to do so,” said Courtemanche. “Because of this, many [newspapers] are faced in situations where they may just have to shut down at some point, so we fear as a media agency that someday we’ll be very restricted in the choices we have and the ability we have in the marketplace.”

But, she said, making more newspapers competitive in the digital market place is a start.

“As a buyer, we want to make sure we have many different options in the marketplace.”

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