Milton Friedman famously said there’s nothing more permanent than a temporary government program. Final proof that he was right came when Finance Minister Francois-Philippe Champagne delivered his recent federal budget.

Budget 2026 confirmed that the Journalism Labour Tax Credit—introduced in 2019 as a temporary, five-year program to help newspaper publishers transition to the digital world—is now permanent. Not only that, it’s now worth roughly $29,750 (35 per cent of salaries up to $85,000) which is far more than the original 25 per cent up to $55,000 (or $13,750 per employee) pledged in the 2019 federal budget.

The Canada Revenue Agency, aided by a government-appointed panel, has approved 194 news organizations which amount to somewhere north of 350 outlets.

In 2019, even the publishers didn’t like the idea of being permanently subsidized. Now, Champagne has not only advanced the dependency, he’s added broadcasters to the journalism breadline. They will have to go through the qualifying process but there are currently more than 1,100 licensed radio stations and close to 100 over-the-air TV stations that may qualify. The bottom line: within a year or so, virtually every news organization in the country will be largely and permanently dependent financially on the government in power.

That’s an awkward position for journalists to be in, given that the people who read, listen to and watch them want to be able to trust journalists to do their work unfettered by a conflict of interest of this nature.

It didn’t have to be this way. Canada didn’t have to become a nation in which its journalists constantly face accusations of political bias based on the fact their salaries are getting subsidized through political acts.

The Macdonald-Laurier Institute has published policy and white papers concerning strategies that could have avoided this. The first was entitled And Now the News, authored by myself and Konrad von Finckenstein

The latest is written by Richard Gingras, a recently retired Google executive who served 15 years as the company’s global vice president for news.

At a recent Macdonald-Laurier Institute (MLI) event in Ottawa on the future of Canadian news media, Gingras argued against the public money being sent to legacy media which have failed to adapt to the digital age. His remarks are now the basis of a new paper he has published with MLI, The Myth of Market Failure.

Gingras is able to support his position with a remarkable success story that he is a part of: Canada’s Village Media, where he is now chairman of the board. In a little over a decade since its digital launch in Sault Ste Marie, Village Media now operates 31 titles in Canada and just launched a new operation, AppletonToday, in Wisconsin. It has plans for 14 more new launches in the United States. So, while Ottawa remains captive to arguments made by businesses incapable of a solvent transition to the digital age, it should be aware there are those in Canada capable of the innovation required to succeed.

“There has not been a market failure,” writes Gingras, whose resume includes stints at PBS and Salon.com. “There has been a failure of thoughtful market assessment, a failure of imagination, and a failure of innovation.” He says it’s not surprising that this level of change delivered a seismic shock that left industry and policy makers wanting to cling to the past.

However, by sustaining those “broken” businesses, writes Gingras, government risks depressing the opportunities for new entrants—the ones that “see a clean canvas upon which to innovate” and are most likely to succeed.

Detailing how the news industry’s traditional advertising sources have evaporated, Gingras makes the point that, while “news publishers continue to claim ‘platforms stole our ad revenue,’” most of that revenue, in fact, went elsewhere.

“This analysis is not new,” he writes. “In the policy arena, however, few wanted to believe it, including the policy makers whose long-term relationships were understandably closer to legacy publishers than to the platforms who allegedly “stole their revenue.””

Ten years ago, as a CRTC vice-chair, I sat and watched in an Ottawa meeting room as representatives of the news industry pitched those same policymakers, primarily senior public servants, on the concept of government funding for the news industry. They got a sympathetic hearing but my takeaway was that there was clear consensus on two points. One was that the public servants wanted nothing to do with defining what constitutes journalism. The other was that, if the government was going to create policies and programs involving the delivery of news, it would be to support “the next thing” rather than struggling dinosaurs seeking to sustain themselves.

Unfortunately, that approach only stood up for a couple of years. The Justin Trudeau government showed far more interest in preserving existing structures and companies than in carving bold new paths forward for innovators. The Carney government is now following in those footsteps.

If the government’s goal is to ensure Canadians have access to information they can trust and use to organize their lives, it would be well advised to think again and heed Gingras’s advice: develop policies focused on promoting a prosperous and innovative future instead of preserving an unsustainable past.

Peter Menzies is a senior fellow at the Macdonald-Laurier Institute, a past publisher of the Calgary Herald, and a former vice-chair of the CRTC.

The views expressed are those of the author(s). National Newswatch Inc. publishes a range of perspectives and does not necessarily endorse the opinions presented.