Reading the Recent Federal Budget

Matthew Holmes
Matthew Holmes

There has been a lot of recent public discussion on what was in (or not in!) the Government of Canada’s Budget 2018. So I wanted to provide some insights from my perspective at Magazines Canada.

For the second budget in a row, arts and culture received relatively few commitments after the considerable increase in funding announced in the government’s first budget in 2016, most of which went to increases to the Canada Council for the Arts.

Leading up to the Budget announcement however, we had been working for months with the understanding that the “modernization” of the Canada Periodical Fund might appear in Budget 2018, along with similar updates to a number of other culture files. During this time, many of you would have heard the loud and concerted efforts calling for the government to bail out large daily newspapers, many of which proposed taking funds from the Canada Periodical Fund (CPF) to do so.

This of course raised serious flags for Magazines Canada, as the $75-million-per-year CPF remains a critical support for the Canadian magazines and paid community newspapers that have been sustained in this way for over 150 years. And one could argue this amount would hardly make a dent in the debt load and profitability crisis many of the daily newspapers are facing.

1. What the Budget included:

The Budget made it clear that the Government is investing in content and supporting the media industry as it continues to adapt and evolve, rather than bailing out or underwriting what Minister Mélanie Joly called “unviable businesses” during her September Creative Canada Framework speech. Instead, the budget includes language committing temporary funding ($10 million per year for five years) to invest in a third-party organization to help cover local news. Importantly, this is to be focused on content for markets not currently served by media (e.g., this could be in provincial capitals or regions where there is no longer a media outlet).

This is important: The government is not choosing winners nor is it creating government-backed competition for existing media; it is investing in content-creation in underserved communities. Also, significantly, this is new money, it is temporary money, and it will not come from the Canada Periodical Fund.

The Budget also made commitments to explore ways in which media companies could take on non-profit, charitable or foundation models, possibly expanding coverage of charities under the Income Tax Act beyond education to also include the coverage of news and information in the media. This is something Magazines Canada has endorsed in the past and called on the government to investigate further. In fact, we have a number of member magazines who already have models that include foundations and charitable arms. We are already in contact with Canadian Heritage to explore how some of our magazines can offer positive precedents and models in this new work, and how our members may implement new financial models aimed at increasing self-sufficiency in the media.

It is important to underscore that in both of these instances, the government is avoiding any “propping up” of existing business models and instead is focusing its efforts in two areas: directly supporting content creation, and helping existing businesses adapt to the new realities and pressures of the consumer marketplace (whether that disruption originates from digital, advertising, and/or shifts in consumer behaviour).

2. What the Budget did not include:

Clearly, the Budget did not include any changes to the Canada Periodical Fund.

For us, this is a victory: We were able to maintain our funding base, which will continue in its current form and with its current budget for the foreseeable future—and it will continue to be for the Canadian magazines and paid community newspapers that it has always helped. As Minister Joly stated in September, the CPF will remain the “primary vehicle” by which the government supports Canadian magazines and paid community newspapers.

That said, over the coming months and years, we need to continue the conversation we’ve already started with Canadian Heritage regarding how to modernize the Canada Periodical Fund and supports for magazines. Clearly, the government has signaled on many fronts that they aim to more directly tie their financial support to editorial and content creation, and less to specific models or platforms for doing business. They have also signaled that they want to assist our industry and provide enough flexibility for our members who are expanding or pivoting into digital content creation.

Under its current framework, the CPF does not allow for that flexibility, but Magazines Canada is at the table with Canadian Heritage to explore ways in which it might slowly adapt to meet our evolving needs as a sector. This dialogue continues and, as Magazines Canada members and stakeholders in this important process, we will keep you informed as we make progress on the future of the CPF!

3. Hear more about the future of the CPF and other public policy issues during MagNet

MagNet 2018 (April 25–26) is right around the corner and we have senior officials from Canadian Heritage coming to talk about changes to their respective funding programs, as well as dozens of other great speakers and sessions to meet the needs of your entire magazine team. We’ll also be joined by officials from the Canada Council for the Arts, the Ontario Arts Council, the Ontario Media Development Corporation, Canada Post and other major funders and partners to our industry. I encourage you to be part of the conversation and take advantage of the early-bird and Magazines Canada member discounts by registering for MagNet now:

Hope to see there so we can continue the conversation!

Matthew Holmes