The Canadian Newspaper Industry is Getting a New Jolt of Life by H.G. Watson

Mar 6, 2017

Source: Editor & Publisher

On Jan. 24, 2017, news broke that Postmedia, a Canada-wide newspaper chain, had sent layoff notices to a handful of staff in three newsrooms—the Windsor Star, the Montreal Gazette and the Ottawa Citizen.

On Twitter, the reaction was immediate. It ranged from anger at the media company— that had recently awarded five executives just under $2.3 million in retention bonuses—to what can only be described as despondency.

This cycle of despair over the state of affairs of the Canadian newspaper industry is something I have witnessed many times over. I edit J-Source, a website dedicated to media news in Canada. Just two weeks into starting my job in 2015, I reported on the closure of the Alberni Valley Times, a community newspaper that had served a community of 25,000 in the Alberni Valley on Vancouver Island.

It is never long until I am reporting on another round of layoffs; another closure. In January 2016, Torstar, which owns the Toronto Star and several smaller regional papers, closed their printing plant and culled 13 staff from the Star newsroom. Only four days later, Postmedia underwent a massive restructuring and cut 90 jobs company wide. A week and a half later two separate newspapers—the Guelph Mercury, a 149-year-old paper owned by Torstar, and community newspaper the Nanaimo Daily News, owned by Black Press—sent their last ever issues to print. In February, buyouts were confirmed at the Ottawa Citizen. In March, the Winnipeg Free Press—touted as the largest independent paper in Canada—offered “voluntary layoffs” to its staff. Metroland, a Torstar subsidiary, offered buyouts next, and seven staff at free daily paper Metro were laid off. In June, 135 people lost their jobs after Postmedia decided to outsource their printing operations in southwestern Ontario. In August, Torstar announced they were laying off 52 staff, many of whom had been working on a much hyped tablet app, Star Touch. By September, the Globe and Mail, one of Canada’s national newspapers, had announced they were offering buyouts to staff—at least 30 people ended up taking them. Buyouts were also the order of the day at Postmedia in the fall—the National Post saw 20 staff leave, with more following chain wide.

And that was just in the newspaper sector.

Canada’s journalism community is small, and in many ways insular. Each new layoff and closure announcement was a keenly felt blow, leaving us all staring agape at one another, asking essentially the same question: What the hell happened to the Canadian newspaper industry?

A Unique Situation

Canadian newspapers are not at all exempt from the global pressures that have affected the rest of the media industry. Google and Facebook dominate internet advertising revenues in Canada, much as they do elsewhere. Revenues are, across the board, down, and more people are accessing news online—and they aren’t paying for it. A Reuters survey in 2016 found that only 9 percent of Canadians polled pay for news online.

While American media outlets felt the blow of the global economic crisis as soon as it hit, Dwayne Winseck, the director of the Canadian Media Concentration Research Project, based at Carleton University in Ottawa, says here, the impacts were delayed. It’s why things seemed more stable until about 2012. “Something that is well known by media economists (is) that advertising in particular is a really good barometer for the condition of the macro economy,” he said. “(If the) macro economy suffers from economic recession or financial crisis, advertising goes down in lock step, and when economic conditions improve advertising goes back up.” Newspaper advertising revenues in Canada has been on the decline since the early 2000s, but, if you look at statistics provided by Newspapers Canada, you can see that pace accelerates 2012 onwards.

A recently released report on news and democracy in Canada, Shattered Mirror, found that Canadians do understand the linkages between democracy and journalism—but they still aren’t interested in paying for news. According to Allan Gregg, who contributed to the report and spoke at an event explaining the report’s findings on Jan. 26, in many cases, people didn’t even realize our newspaper industry was in trouble because to them, it seems like there is more journalism than ever before, available in every corner of the web for free.

But everyone has these problems. In other ways, Canada’s situation is unique.

To try to make more sense of Canada’s newspapers present, we need to understand the industry’s past. The situation was not always as dire as it feels today. According to Newspapers Canada, an advocacy group for the Canadian newspaper industry, Canada had 110 daily newspapers in the 1980s. In 2015, there were 99 paid dailies—not a huge change. What has significantly changed is who owns those papers.

The ownership of Canada’s newspapers has become more concentrated in the last 30 years. Researchers looking at media concentration in Canada have found that as of 2011, four companies accounted for 84 percent of all newspaper ownership in Canada. Though levels did fall since then, one company in particular saw a spike in ownership—Postmedia.

This history of Postmedia itself illustrates how newspaper ownership has contracted in Canada. To quote from Bruce Livesey, an investigative journalist for the startup National Observer, in a deep dive he did on the company:

“Postmedia’s roots go back to the Southam Inc. newspaper chain that was founded more than a century ago. In 1996, Black bought the Southam papers and soon created the National Post as its flagship paper. His term as boss would be short-lived, however: pressed by his bankers to chop debt, Black sold the papers to the Asper family’s CanWest Global Communications Corp. in 2000. Seven years later, the New York-based hedge fund GoldenTree—co-founded by Steven Shapiro, a former manager with CIBC World Markets—began buying up CanWest’s debt issues. As CanWest floundered, GoldenTree acquired more of its debt. Poorly managed by the Aspers, weighed down by $4-billion in debt and pummeled by the credit crisis, CanWest declared bankruptcy in 2009. A year later, GoldenTree and 19 other foreign and domestic lenders, mostly hedge funds, paid $1.1-billion for the CanWest papers, created Postmedia and made Paul Godfrey its CEO.”

In October 2015, Postmedia completed a debt recapitalization plan that reduced its debt from approximately $648 million to $341 million.

Despite all this, as of 2015, Postmedia owns a full third of the Canadian newspaper industry, the result of the purchase of Quebecor subsidiary Sun Media, comprised of a group of broadsheet and tabloid papers, some titled the Sun in their respective markets.

The result was that Postmedia had two newspapers in three cities—Edmonton, Calgary, and Ottawa, as well as the Toronto Sun in the same city where their flagship paper, the National Post, has its newsroom, and two newspapers in Vancouver they already owned, The Vancouver Sun (not a part of the Sun Media chain) and The Province. The deal was approved by the federal Competition Board, with Paul Godfrey, president and CEO of Postmedia, telling the Globe and Mail that they planned to keep the newsrooms of the papers separate. That changed in January 2016, when the newsrooms were merged in Ottawa, Calgary, Edmonton and Vancouver. At the time, Postmedia spokesperson Phyllise Gelfand told me that stories would be rewritten at to suit the tone of the publication they would appear in. “The right content and the right voice will be adapted at a re-write desk,” she said.

Winseck believes that as newspapers were bought at inflated prices by the various chains, the debt they ended up incurring has weighed them down, dramatically cutting resources and overall impacting the quality of journalism produced. “It was kind of a vicious downward cycle,” he explained. “Audiences could see through the declining quality of the journalism, and they loosened their attachments to these newspapers as their go-to sources of information.”

Some papers have tried to innovate. The Toronto Star, following the lead of French language daily La Presse, launched a tablet edition, Star Touch, in September 2015. They hired 60 new staff for it, joyous news for the industry when it was desperately needed. James Bradshaw, a Globe and Mail journalist, reported in a recent feature on Torstar that this gave the newsroom at “startup feel.”

It didn’t last. According to the Ryerson Review of Journalism, the app itself was static. “Its stories don’t change throughout the day, much like a traditional newspaper,” wrote then Ryerson Review editor-in-chief Katrina Eschner. “Breaking news stories aren’t fully integrated into the app, but can be read on a pull-out tab, as long as you have web access.” Audience pick up was “slower than expected,” she noted in an addendum to the story a few months later.

Many of the staff assigned to the tablet have been laid off. Revenue continues to fall. And Torstar took drastic measures to cut costs to offset revenue declines company wide.

The Local News Crisis

Guelph is a mid-sized town about an hour and a half drive north-west of Toronto. Primarily known as a regional agricultural center, it is a rapidly changing place. Commuter trains shuttle people back and forth to Toronto a few times a day, and University of Guelph, which has an enrollment of over 27,000, continues to grow. And for 149 years, the town was home to an ambitious local daily newspaper.

Phil Andrews was the managing editor of the Guelph Mercury for 10 of those years. During his tenure, he oversaw an investigative series on the local gravel industry that won a National Newspaper Award and stories that were nominated for and won multiple Ontario Newspaper Awards.

“There was an ambitious culture quite deeply rooted there when I walked in the door,” he recalled. “The paper took a great deal of pride in being in doing journalism that was probably beyond its resources to do.”

What he remains proudest of are the journalism careers that were cultivated at the Mercury through its internship programs. (Full disclosure: I interviewed for, and didn’t get, an internship there in 2013—but the fact I was even considered thrilled me beyond belief). The paper was a farm team for emerging talent, and many great reporters emerged. Daniel Dale, the Toronto Star Washington correspondent widely known for his aggressive daily fact checking of Donald Trump, was a sports reporting intern at the Mercury, according to Andrews.

Andrews says that for months, he had been nudging channels at Metroland, a Torstar subsidiary, for meetings to discuss the future of the Mercury. “I just couldn’t get anywhere.” In hindsight, he realized why. On Jan. 22, 2016, a Friday, he alone was told that next week, the Mercury would print its final edition. The announcement was made public on Jan. 25, and on Jan. 29, the final edition—a -30- splashed above the fold on A1—came off the presses.

Local news outlets in Canada have borne the brunt of the impact of falling revenues. April Lindgren, an associate professor at Ryerson University’s School of Journalism in Toronto, studies news poverty—the extent to which a community’s critical information needs are being met by local media. To that end she co-created the News Poverty Map, a crowdsourced map that tracks what is happening to local news across Canada. Using data collected from the map, Lindgren has determined that since 2008, there have been 171 local news outlet closures in 138 communities. Of those closures a majority are community newspapers which publish four times a week or less.

What often happens, according to Lindgren, is that where chain buys another paper in smaller centers, they close it or consolidate it with the competing paper. A good example of this is seen with the West Coast chain Black Press. After purchasing several papers on Vancouver Island from Glacier Media in 2014, they went through the process of shutting down the competing paper in two-newspaper towns.

The overall result is simply less coverage. Lindgren also researched how well the Canadian federal election in 2015 was covered by a few small communities across Canada. Surveying coverage from the month before people headed to the polls, she determined the number of stories focusing on the local races per 10,000 registered voters. Some cities fared well—Thunder Bay had 25 stories per 10,000 voters, for example—while others did not. Brampton, a diverse city that had grown out of what was once a Toronto suburb, only had two stories per 10,000 voters, despite the fact that there are five federal ridings in Brampton, and thus five local electoral races to cover.

Everyone knows there is an issue here. Even the federal government has gotten involved, last year launching a committee of Members of Parliament (MPs) to examine the “local news crisis.” Academics, publishers and editors have all appeared before it to explain what they think is to blame for the crisis in the newspaper industry.

However, the biggest boogeyman might be Canada’s publicly funded broadcast corporation. The CBC ranks among the most highly trafficked websites in Canada, according to recent comScore results, and draws in digital ad sales valued at about $25 million, according to the Shattered Mirror report. At a public talk with several newspaper publishers last year, Globe and Mail publisher Phillip Crawley said, “I hate that I’m competing with something that I fund with my taxpayer money.”

However, CBC’s internet ad sales, while more than the Globe and Mail’s, are still much lower than the internet ad revenue reported by Torstar and Postmedia in 2015. And while local newspapers are hollowed out, the CBC maintains a Canada-wide network of bureaus and offices. It isn’t lost on people that should newspapers collapse, the CBC might be the last outlet standing for many local communities.

The Shattered Mirror report, which came at the request of the federal government, offered 12 recommendations to help improve the civic function of journalism–everything from overhauling tax laws; creating a multi-million dollar journalism fund; and making the CBC digital ad free. Several of those ideas, especially the idea of a fund, are already being opposed by Canadian journalists. And others wonder if any of these changes will actually be made, and if they are, will they only benefit large legacy media organizations?

 Shaping Our Own Future

There is a palatable sense of frustration that has been bred amongst Canadian journalists. During much of 2016, while out for drinks with colleagues from other news organizations, we’d experience a collective grimace as we discussed whatever the latest layoff news was.

I can only speak for myself, but I do experience a sense of powerlessness. It doesn’t feel like the entrenched higher-ups, whether they be publishers or editors, have any interest in aggressive innovation or changing the status quo of newsroom culture. Maybe they do—but that feeling isn’t being communicated down the ranks. It doesn’t encourage a lot of confidence in our industry’s future. I love journalism, and I will keep doing it as long as I can be paid for my labor, but I genuinely wonder sometimes: what jobs will be left for us?

Perhaps, the ones we create ourselves.

Take, for example, Discourse Media. Based in Vancouver, it was originally conceived as a freelancer collective. But it quickly evolved into a journalism startup focused on doing in depth journalism that is often too costly for media outlets to do themselves. One project had them do a deep data investigation about transportation in Vancouver—their findings led to stories in a number of local media outlets and then nominated for a global data journalism award, according to their website. A recent project closely examined how the constitutional right to freedom of the press applies to Canada’s Indigenous communities. These are stories that fill a demonstrable need.

“I think Canada is an incredibly underserved market,” said Erin Millar, the co-founder of Discourse. It’s not just locals who have noticed, she pointed out. The BBC and BuzzFeed have opened offices here in the last two years, and the New York Times just recently appointed a Toronto bureau chief. A small but steady stream of new journalism organizations have begun to appear, some national—Canadaland, iPolitics, the National Observer—and some local—The Halifax Examiner, AllNovaScotia.com, The Tyee.

So far the evidence suggests that these new organizations have yet to fill the gap left by local newspapers—Winseck points out that none of the new Canadian journalism organizations listed above have managed to crack the top 60 on comScore. And the data from Lindgren’s map shows that only 51 new local media outlets have opened Canada wide.

But for every shared grimace, there are also all of the people I’ve met or interviewed in Canada who believe there is opportunity here—like Millar, who continues to grow Discourse into a bigger company; or Phillip Smith, who pulled his community together to start an innovative journalism funding project; or Maureen Googoo, who used crowdfunding to make her dream of creating a news outlet covering Indigenous news in Atlantic Canada a reality.

Those outlets may be small now, but we don’t know what the next 10, 20, 30 years are going to look like. The point is, in Canada, we have the opportunity to shape what the future of our news industry will be—who could say no to that?

© Editor & Publisher