Local news, of course, has been in trouble in Canada and around the world for years. But now a financier has asked a Halifax court to break up the two companies that jointly own the majority of newspapers in Atlantic Canada outside New Brunswick. And this has opened up the possibility that the region could find itself without traditional media outlets other than broadcasters.
Much of the problems with the two companies — which are jointly owned and whose holdings include The Chronicle Herald in Halifax and The Telegram in St. John’s, Newfoundland, as well as The Guardian in Charlottetown — are of their own making. They have refused to cover, or have paid very little for, C$40 million in debt over the past five years; they owe the government just under $5 million in HST; and they financed operations using money from employee pensions.
But the decision to dissolve the companies, and the related filing for creditor protection, comes at a time when media outlets large and small are facing another grave threat to their existence. My colleague David Streitfeld writes that “there are signs that the whole concept of ‘news’ is fading away.” While he was writing about the United States, it appears that his findings apply to Canada as well.
[Read: How the Media Industry Keeps Losing the Future]
Dean Jobb, who teaches journalism at King’s College University in Halifax, told me that the situation created by the potential collapse of the two companies, SaltWire Network and The Halifax Herald, could create a local news desert.
“It’s quite a shock,” said Jobb, who has worked as a reporter, editor and columnist at The Chronicle Herald for 20 years. “It’s not an announcement of cuts or layoffs or the closure of a document or two. It is potentially the region that will end up with very few surviving media outlets in most of its communities.”
The Chronicle Herald traces its origins to 1824 and claims to be the oldest independent newspaper still operating in Canada. For now it is owned by Mark Lever, its CEO, and Sarah Dennis. Ms. Dennis is an editor of the Halifax Herald and SaltWire, Mr. Lever’s wife and the fourth generation of her family to control the Halifax newspaper.
In 2017, when the newspaper was in the thick of it a strike that will last almost 19 months, The Chronicle Herald’s parent company purchased – from Transcontinental, a Montreal-based printing company – a group of daily and weekly newspapers covering all of Atlantic Canada except New Brunswick. The amalgamated entity was named SaltWire.
Instead of paying Transcontinental C$10 million, the purchase price of the deal, he sued the news company for, in his opinion, misrepresenting the newspapers’ financial situation. This lawsuit continues. A court earlier this month ordered SaltWire to deposit half a million dollars to ensure that Transcontinental’s legal costs are covered in the event of SaltWire’s loss.
During the expansion, the companies borrowed C$32.7 million from Fiera, a Toronto-based private lender. In court filings, Fiera said the companies had been delinquent on those loans for five years “and have no path or timeline for repayment of the credit lines despite the patience of lenders.”
For now, all newspapers and websites can operate normally while pursuing creditor protection. Fiera asks the Court to impose the sale of all the company’s shareholdings to cover the financing.
But Jobb is among many observers worried that buyers will not be found for many newspapers or that, if they are sold, the newspapers will become just a shell of what they once were. According to court documents, SaltWire lost C$4.1 million in its latest fiscal year. The Herald reported a loss of $24.8 million, which the company attributes to pension obligations.
While private broadcasters have scaled back local news across Canada, CBC continues to provide robust local coverage across Atlantic Canada. But Jobb said that would likely decline significantly if Pierre Poilievre’s conservatives come to power in the next election and make good on Poilievre’s oft-repeated promise to eliminate all government funding for the station’s English-language services. The CBC currently receives C$1.4 billion from the English and French governments for its operations.
But even if the worst were to happen, there could be a positive development. Earlier this week, my colleagues wrote that a handful of start-up media companies are finding success by learning from previous mistakes.
[Read: Sprouts of Hope in a Gloomy Media Landscape]
While The Halifax Examiner is more of a general interest publication than start-up ones, it could benefit from any void left by SaltWire’s financial meltdown.
“Tim Bousquet, the editor there, did a fantastic job,” Jobb said. “He has made it an award-winning news channel and it certainly has some reach. Depending on what happens with SaltWire, maybe it will become a go-to for more people.
TransCanada
Born in Windsor, Ontario, Ian Austen studied in Toronto, lives in Ottawa and has written about Canada for the New York Times for twenty years. Follow him on Bluesky a @ianausten.bsky.social
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