(February 1, 2021) On January 2, 2021, La Presse Inc. became the first Canadian news organization to be listed as a ‘qualified donee’ by the Canada Revenue Agency, signalling a potential sea change in the production of Canadian journalism.
The potential extinction of local news organizations has been one of the slow-burn stories of the last several years. In 2018, 2019, and 2020, Google and Facebook received at least three-quarters of all revenue generated globally by online advertising. This has deprived local newsrooms of their main source of funding, and many have closed, or drastically reduced their circulation. As a result of this vacuum, misinformation, suspicion, and conspiracy theories have abounded on social media, which in some cases has interfered with public health efforts during the COVID-19 pandemic.
“We saw a lot of missing infrastructure for news and the decline of information and what it means for communities,” Fateema Sayani, director of donor engagement for the Ottawa Community Foundation said in August 2020. “[H]aving quality information is part of that building of community.”
In an effort to turn the tide, earlier this year the Canadian Revenue Agency made changes to the tax responsibilities of qualified news organizations, allowing them to seek for non-profit status through a three-stage application process. Having pivoted to a non-profit structure back in 2018, La Presse Inc. were the first to apply for this new status. At the time, both iPolltics and Jsource considered it a risky and even presumptuous step but in the two years since then the problems threatening local news have grown even more severe. La Presse Inc. may have made the shift just in time.
Now that La Presse have resolved their tax status, they face the challenge of continuing to motivate an already squeezed pool of donors. According to a Reuters Institute Study, only 9% of Canadians paid for online news in 2019. However, in 2020 this number increased to 13%. And even before La Presse received its official nonprofit status, it raised $3-million in a 2019 fundraising effort.
“Despite the fact that we still cannot issue tax receipts, many readers responded to our fundraising campaign,” La Presse president Pierre Elliot Levasseur said at the time. “Their solidarity touches us greatly.”
Although many reputable mainstream publications operate on a for-profit basis, for-profit journalism can indirectly contribute to extremism, as dramatic headlines and polarizing debates catch the public eye and thus are necessary for the survival of the publication. Further complicating the issue is the fact that some crucial issues of today, such as climate change, typically underperform on for-profit news sites, meaning that there is less internal interest in covering such stories. Clearly, some regulation and support are needed if Canadian journalism is to retain its integrity but relying on public donations may not be a sustainable solution in the long term.
April Lindgren, principal investigator for the Local News Research Project and the Velma Rogers Research Chair at Ryerson University’s School of Journalism, reflected early this year that “What I hope everyone will realize is that charitable support for local journalism isn’t as much about saving journalism as it is about acknowledging that news is part of the critical social infrastructure of communities. The pandemic has made this so clear — news about what is happening locally is in high demand.”