The non-profit news sector has flourished in the U.S. and other countries around the world in large part because it is recognized as a charitable endeavour

Much ink has been spilled over the Canadian government’s announcement of support for Canada’s struggling news media, valued at $600 million over five years.

There are valid concerns about the eligibility criteria, which will be crafted by a yet-to-be-determined committee. There are also concerns about the funds being wasted on propping up old business models and stifling innovation in the process.

But one thing that’s been largely lost in all the hand-wringing is one simple fact: journalism is a public good and at long last the Canadian government has recognized it as such.

“In short, strong and independent journalism serves the public good — for Canada, and for Canadians,” reads page 42 of the 158-page fall economic update.

The non-profit news sector has languished in Canada, while it has flourished in the U.S. and other countries around the world. Why? In large part because — until now — non-profit news organizations haven’t been qualified to receive charitable donations or issue tax receipts in Canada.

Meanwhile in the U.S., a robust non-profit news sector has emerged over the last decade.

That country is now home to more than 200 non-profit newsrooms, employing more than 2,000 journalists, according to the Institute for Nonprofit News’ 2018 Index. All have charitable status, publish original reporting and are committed to standards of editorial independence and transparency.

Take The Centre for Investigative Reporting, for instance. It has a budget of more than $10 million a year and employs nearly 80 people. ProPublica operates at a similar scale. And in 2013, InsideClimateNews won a Pulitzer Prize for its work.

Philanthropic foundations in the U.S. are pouring millions into journalism, while philanthropic support for journalism in Canada exists only in isolated pockets, from rare funders willing to forgo the tax benefits of giving away money.

Even some of America’s large daily newspapers are converting to a non-profit model. All of this is made possible because journalism is seen as a charitable endeavour in the U.S.

Meanwhile in the Great White North, I can count Canada’s non-profit news organizations — including The Narwhal — on one hand.

But that’s likely to change after the government’s announcement of a trio of measures to help sustain professional journalism.

New rules could prompt non-profit revitalization

One part of the government’s plan is to introduce a new category of qualified donee for non-profit journalism organizations. This means news organizations like The Narwhal will be able to issue tax receipts to readers who make donations. It also means we’ll be able to accept donations directly from charities.

Being a “qualified donee” does not mean actually becoming a registered charity (which would require re-writing Canada’s law around charitable purposes) — it is a status reserved for special situations. Municipalities and amateur athletic associations are also “qualified donees,” for instance.

La Presse, Canada’s largest French daily newspaper, moved to become a non-profit entity earlier this year. And the Globe and Mail is already musing about creating a non-profit arm.

Becoming qualified donees makes journalists no more beholden to the government than any municipality or amateur athletic association is.

The other two measures announced by the federal government are a refundable tax credit to support labour costs associated with original news content creation and a new temporary non-refundable tax credit to support subscriptions to Canadian digital news media.

It’s the tax credit for labour costs that has become a significant target of backlash.

Paul Willcocks at The Tyee makes a compelling case that it would be problematic for the bulk of the federal assistance to flow to corporate news organizations, such as Postmedia whose CEO Paul Godfrey’s total compensation was more than $5 million last year.

“By prolonging the agony — and not letting Postmedia and the other corporations deal with market forces — the federal funding could in fact hurt innovative outlets trying to find an audience and funding in a crowded landscape,” argues Willcocks.

I agree that the tax credits for labour costs could easily be misspent on propping up the big players (although some have already recommended thoughtful ways to avoid this). At the same time, I think allowing non-profit news organizations of all shapes and sizes (including legacy outlets) to receive charitable money is in the public good, so long as there’s transparency around where the funding is coming from.

Spurring innovation, collaboration

Opening up philanthropic funding for news in Canada will require innovation on the part of traditional players (they have to attract the donations, after all) and may well spawn more co-operation between start-ups and established outlets, which benefits everyone.

Funders are known for encouraging collaboration between groups, which may help ease some of journalism’s traditional competitiveness and pave the way to more partnerships. Again, this is something we’ve seen south of the border, with projects like The Investigative Fund partnering with diverse news outlets such as The New York Times, VICE, The Rolling Stone and The Intercept. This type of co-operation is exceedingly rare in Canada.

Looking to the future, it’s not unlikely, for instance, that The Narwhal’s in-depth and investigative environmental reporting could be shared among other publishers, including legacy publishers like The Globe and Mail — which would be a much more efficient use of limited resources than us each battling away in individual fiefdoms.

Some people like to paint philanthropic funding for journalism as fundamentally tainted, but it’s certainly no more tainted than the widely accepted status quo.

The Institute for Nonprofit News in the U.S. has set standards to safeguard journalism from undue influence and ensure transparency around where funding comes from, which results in significantly more transparency than traditional business models that rely on investors and advertisers.

The success of the federal plan is going to be determined by the details — especially the composition of the committee, which will determine eligibility for all of the measures.

But the move to making non-profit news organizations eligible to accept charitable funding is a massive step forward for the future of news in Canada.

Photo: Carol Linnitt / The Narwhal