A Financial Crisis May Jeopardize Local News in Most of Atlantic Canada
Local news outlets have, of course, been in trouble in Canada and around the world for years. But now a lender has asked a Halifax court to dissolve the two companies that jointly own most of the newspapers in Atlantic Canada outside New Brunswick. And that has opened up the possibility that the region may end up without any legacy news outlets aside from broadcasters.
Much of the trouble with the two companies — which are commonly 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 — is of their own making. They have either refused to cover, or paid very little, on 40 million Canadian dollars in debts over the past five years; they owe the government just under 5 million dollars in H.S.T.; and they have funded operations using employees’ pension money.
But the move to dissolve the companies, and a corresponding filing they made for creditor protection, come at a time when news outlets large and small are facing yet another major threat to their existence. My colleague David Streitfeld writes that “there are signs that the whole concept of ‘news’ is fading.” While he was writing about the United States, it appears that his findings also apply in Canada.
[Read: How the Media Industry Keeps Losing the Future]
Dean Jobb, who teaches in the journalism program at the University of King’s College in Halifax, told me that the situation created by the potential collapse of the two companies, SaltWire Network and The Halifax Herald, might create a local news desert.
“It’s a real shock,” said Mr. Jobb, who worked as a reporter, an editor and a columnist at The Chronicle Herald for 20 years. “It’s not an announcement of cutbacks or layoffs or the closure of one or two papers. It’s potentially the region ending up with very little media surviving in most of its communities.”
The Chronicle Herald traces its origins to 1824 and claims to the oldest independent newspaper still operating in Canada. It’s owned, for now, by Mark Lever, its chief executive, and Sarah Dennis. Ms. Dennis is a director of The Halifax Herald and SaltWire, Mr. Lever’s spouse and the fourth generation of her family to control the Halifax newspaper.
In 2017, when the newspaper was in the midst of a strike that would last almost 19 months, The Chronicle Herald’s parent company purchased — from Transcontinental, a printer based in Montreal — a group of daily and weekly newspapers covering all of Atlantic Canada except New Brunswick. The amalgamated entity was branded as SaltWire.
Instead of paying Transcontinental 10 million Canadian dollars, the purchase price for the deal, it sued the printing company for, in its view, misrepresenting the financial state of the papers. That lawsuit continues. A court earlier this month ordered SaltWire to deposit half a million dollars to ensure that Transcontinental’s legal bills are covered if SaltWire loses.
During the expansion, the companies borrowed 32.7 million Canadian dollars from Fiera, a private lender based in Toronto. In court filings, Fiera said that the companies had been in default on those loans for five years “and have no path or timeline for repayment of the credit facilities notwithstanding the patience of the lenders.”
For now, all of the newspapers and websites can operate as usual as they pursue creditor protection. Fiera is asking the court to force the sale of all of the companies’ holdings to cover the loans.
But Mr. Jobb is among many observers who are concerned that buyers won’t be found for many of the papers or that, if they are sold, the newspapers will become just shells of what they once were. According to court filings, SaltWire lost 4.1 million Canadian dollars in its most recent fiscal year. The Herald had a 24.8 million-dollar loss, which the company attributes to pension obligations.
While private broadcasters have been cutting back on local news throughout Canada, the CBC continues to provide robust local coverage throughout Atlantic Canada. But Mr. Jobb said that was likely to diminish greatly if the Conservatives under Pierre Poilievre come to power in the next election and follow through with Mr. Poilievre’s often repeated promise to eliminate all government funding for the broadcaster’s English language services. The CBC currently receives 1.4 billion Canadian dollars from the government for its operations, English and French.
But even if the worst comes to pass, there might be one positive development. Earlier this week, my colleagues wrote that a handful of start-up media companies are finding success from learning from previous mistakes.
[Read: Sprouts of Hope in a Gloomy Media Landscape]
While The Halifax Examiner is more a general-interest publication than those start-ups, it may benefit from any vacuum left by the SaltWire financial meltdown.
“Tim Bousquet, the editor there, has done a fantastic job,” Mr. Jobb said. “He’s made it an award-winning news outlet, and it certainly has some reach. Depending on what happens with SaltWire, maybe it will become a more of a go-to for more people.”
Trans Canada
A native of Windsor, Ontario, Ian Austen was educated in Toronto, lives in Ottawa and has reported about Canada for The New York Times for two decades. Follow him on Bluesky at @ianausten.bsky.social
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