La Presse is throwing in the towel. Who will be next?

La Presse announced on Tuesday that its business model is no longer viable after 134 years of sustained operations. This is a dark day for Canadian media and the democracy it sustains.

The company’s executives pointed directly to the flight of advertising money to Google and Facebook as a key driver of the restructuring, a reality aggravated by Ottawa’s policy of subsidizing companies for buying ad space from Google and Facebook. The entire Canadian media sector is exposed to this problem.

Google, Facebook and other foreign internet giants extract 80 per cent of Canada’s digital advertising spending, and this outsized dominance sucks the life out of newsrooms.

In a last-ditch attempt to stay afloat, La Presse will restructure as a non-profit organization to qualify for government handouts and corporate charity.

If La Presse can’t survive, most Canadian media outlets have little chance.

In Budget 2018, the federal government launched a $50-million fund to assist publications with the “transition to digital.” Ottawa also announced a yearlong study of whether journalism should be funded by charity.

What’s wrong with these measures? Basically everything. First, La Presse didn’t have a problem going digital. It was a world leader in this regard. What’s more, this approach opens the door for government and big money to stick their fingers into Canada’s newsrooms.

There is a market-based solution that can bring enough cash to Canadian media while avoiding the ethical pitfalls of government subsidy.

Last year, Canadian advertisers spent more than $5 billion on online ads. Most of it flows down a tax-free express lane straight into the pockets of Google, Facebook and other giant American internet corporations.

Ottawa encourages this exodus. Section 19 of the Income Tax Act creates rewards for Canadian advertisers who work with Canadian media outlets, effectively imposing a tax road bump on companies who advertise to a Canadian audience using foreign media.

Here’s the rub: The government does not apply these laws to internet-delivered media. You are free to place an ad in the Canadian edition of the New York Times, but you cannot deduct the cost of it.

If you place the same ad on nytimes.com, you reap the full tax deduction that is supposed to be reserved for those who buy from Canadian media.

Closing this loophole would raise public income by $1.3 billion annually, and repatriate up to $440 million in ad spending to sustain Canadian media and the critical work they do in service of democracy.

Let’s not wait until another major news operation joins La Presse in the intensive care ward before this loophole is closed.