The upcoming federal budget will include no cash to set up a civic journalism fund — as was recently recommended by the Public Policy Forum in a report commissioned by Heritage Canada, several sources confirmed.

OTTAWA — The Trudeau government won’t be bailing out Canada’s struggling news industry, The Huffington Post Canada has learned.

Heritage Minister Melanie Joly scrums with media in Ottawa on Sept. 13, 2016. (Photo: Matthew Usherwood/CP)

The report, titled “The Shattered Mirror: News, Democracy and Trust in the Digital Age,” suggests the establishment of a “Future of Journalism and Democracy Fund,” funded through a tax increase on non-Canadian digital publishers and a one-time $100-million federal injection.

The fund would help news organizations transition to digital formats, support civic-function journalism projects through an arm's length structure and help small news organizations obtain legal advice.

It would dedicate $8 million to $10 million towards a free local news service — hiring 60 to 80 reporters to cover courts, provincial legislatures and city halls where Canada’s major newswire, The Canadian Press, has no current reporters. The fund would also devote $8 million to $10 million annually to support journalism by indigenous news organizations.

“There is no way we’re doing it,” a senior Liberal told HuffPost.

Joly focused on ‘independence of journalists’

In an interview, Heritage Minister Mélanie Joly was less definitive but stressed all future plans the Liberals announce will ensure “journalism independence is paramount.”

“We will be bringing forward in 2017 an entire new model on how to support Canadian content,” she told HuffPost.

“At this point, we are studying all scenarios but for us, the most important thing is that we keep the independence of journalists and government has nothing to do in politicizing the media that’s for sure,” Joly said.

There should be a “sound distance” between journalists and government, she said.

Ottawa already plays a role in the information sector through funding the CBC, through funding weeklies and periodicals, and through certain forms of tax credits, she noted.

"There are a lot of local media who are still putting in the good fight and could use some help and could succeed in transitioning and coming up with new business models."

The Public Policy Forum’s suggestion for a civic journalism fund actually creates a more independent structure than the government-appointed CBC board of directors — an organization Joly wholeheartedly affirmed is “independent.”

Some in the industry are also concerned by the Public Policy Forum’s recommendation.

The government already has a “news bureaucracy” with the CBC, whose large online footprint is “distorting the market” for local newspapers, said Winnipeg Free Press publisher Bob Cox, the chair of Newspapers Canada.

While Cox likes the tax changes suggested in the report and believes it could go some way in levelling the playing field with advertisers who are now spending more money on Facebook and Google ads, he said a super fund for civic journalism would finance journalists to compete directly against his newspaper.