Postmedia fights for financial support to preserve ‘brands, voices’
TORONTO — A $17-million interactive digital media tax credit from the Ontario government helped pare Postmedia Network Canada Corp.’s second-quarter net loss to $1.3 million from a loss of $28.5 million a year earlier.
However, Postmedia executive chairman Paul Godfrey said that was the last quarter for the tax recovery because newspapers were specifically excluded in the 2015 Ontario budget. Instead, he hopes continued lobbying of all levels of government will lead to financial support and “ultimately the preservation of distinctly Canadian brands and voices.”
Godfrey singled out Quebec, which announced in its recent budget that it will spend about $36 million to help newspapers in the province, including about $19 million to aid their transition to digital platforms.
“We are hopeful that this may inspire support from other provincial governments and even perhaps our federal government to help made-in-Canada industries level the playing field,” he said during a conference call.
Federal Heritage Minister Mélanie Joly unveiled a cultural strategy in September that lacked measures to boost newspapers. She said Ottawa had no interest in bailing out industry models that are no longer viable.
Ottawa was called upon to tax foreign companies selling digital subscriptions in Canada, create a $400-million fund to help finance reliable news and information and provide a five-year tax credit to partially offset digital investments by print outlets.
February’s federal budget included $50 million over five years to support “local journalism in underserved communities,” along with plans to explore new models that would allow private and philanthropic support for “non-profit” journalism, including allowing Canadian newspapers to receive charitable status.
Postmedia’s net loss for the three months ended Feb. 28 was down despite a continued decline in revenue at its newspaper operations as the company continued its focus on cutting costs, partially through the closure of several community newspapers between November and January.
The Toronto-based company, which owns the National Post, Vancouver Sun and many other paper and digital publications, said its operating expenses were down 21 per cent or $36.2 million.
The company said it was granted the $17-million media tax credit in February after refiling its tax returns relating to previously recognized compensation expenses between September 2012 and April 2015.
Excluding the tax recovery claim, expenses excluding depreciation, amortization, amortization, impairment and restructuring decreased 11.1 per cent or $19.2 million. Those positives offset a 10.8 per cent decline in revenue to $157.6 million.