Canadian media co-operative makes temporary lay-offs due to Covid-19

The Canadian government has announced tax breaks for struggling news publications

A Canadian co-operative that publishes six daily newspapers is to temporarily lay off 143 employees and cease print editions during the week.

The measures are designed to help it cope with a drop in advertising revenue caused by the Covid-19 outbreak.

The co-op’s member publications will continue to produce a Saturday edition but will be unable to print the Monday to Friday publications. However, the newspapers will continue to publish online stories throughout the week.

Set up in August 2019, CN2i (Coopérative nationale de l’information indépendante) is the only group of co-operative publications in Quebec and the largest in the country. It brings together six local papers with 360 employee-owners: Le Droit in Gatineau and Ottawa, Le Nouvelliste in Trois-Rivières, Le Quotidien in Saguenay−Lac-Saint-Jean, Le Soleil in Québec, La Tribune in Sherbrooke et La Voix de l’Est in Granby. Each of the six papers is now a co-operative in its own right.

The six publications used to belong to Groupe Capitales Médias (GCM), which had to go through financial restructuring. GCM’s shares were acquired by the co-op in December 2019.

During the process of setting up and raising capital, the co-op was advised by the Le Conseil québécois de la coopération et de la mutualité and La Coopérative de développement régional du Québec.

Employees invested 5% of their salaries in the collective buyout. They also received loans totalling CA$12.3m and provincial and federal tax credits. Some of the loans came from Desjardins and other financial co-ops and solidarity funds. Local residents have also chipped in to support their papers. The six co-ops raised CA$3m from their communities.

Since setting up, the co-op said it had the aspiration to go digital. And with Covid-19 affecting its revenue, the group says it needs to adjust its activities to ensure sustainability.

Other media organisations in Canada are facing similar challenges. On 25 March the federal government announced it had set up the Independent Advisory Board on Eligibility for Journalism Tax Measures to decide which publications could benefit from tax reliefs to cope with the crisis.

The board is composed of current and retired faculty members from post-secondary journalism schools across Canada.

“Right now, it is more important than ever that Canadians have access to the latest news and information,” prime minister Justin Trudeau said in his daily appearance. “To ensure that journalists can continue to do this vital work, our government is announcing new measures to support them.”

Diane Lebouthillier, minister of national revenue, added: “Our government remains committed to supporting a vibrant journalism industry, while respecting the core principle of journalistic independence. The members of the Independent Advisory Board appointed today are all highly respected in their fields. I thank them for agreeing to help deliver unprecedented support for Canadian journalism organisations and to ensure the vitality of our democracy.”