The Department of Public Works quietly awarded millions in untendered contract fees to the nation’s largest newspaper chain twelve days after announcing a media bailout, records show. The sole-sourced contract to Postmedia Network Inc. was the largest of its kind approved for “communications research services”.
Neither Postmedia nor the department commented on the contract worth $5,551,698. It was awarded April 1, only days after cabinet’s March 19 budget proposed a $595 million bailout for federally-approved media in a bill that has yet to pass Parliament.
Postmedia’s flagship daily National Post in news coverage of the bailout wrote: “The federal government’s plan to invest $595 million in local journalism should assist Postmedia in continuing to make its transition from relying on print revenue streams to those in the digital realm.”
Records did not explain why Postmedia was paid for “communications research”, or what justified the $5.55 million fee on a contract to expire in a year. The department on the same day awarded a similar untendered communications research contract to the rival Torstar Corporation’s iPolitics division worth $266,545, one-twentieth the value.
The newspaper chain has reported a total $962.23 million in net losses in the past six years. No Postmedia executive has testified at parliamentary hearings on the bailout detailed in Bill C-97 the Budget Implementation Act.
Then-CEO Paul Godfrey in his last appearance at parliamentary hearings in 2016, at the Commons heritage committee, told MPs dailies would die without taxpayers’ aid. “We’re asking the government to be an ally,” said Godfrey: “We know that a free press isn’t really free.”
“There have been no fiercer critics of subsidies to the media than the Toronto Sun and the National Post; how do you square your editorial position with your corporate position?” asked Liberal MP Adam Vaughan (Spadina-Fort York, Ont.). “You realize that columnists have the right to say what they want,” replied Godfrey.
The Department of Canadian Heritage in earlier 2016 Access To Information memos questioned whether Postmedia could “keep the wolf from the door” amid annual, multi-million dollar losses. Postmedia that year announced it would cut its payroll 20 percent and stop hiring freelancers. “Postmedia’s valiant efforts to keep the wolf from the door do not mean the chain can survive in its current form,” wrote Ramzi Saad, then-deputy director general of cultural industries.
“What is happening to Postmedia papers will now happen to the Globe & Mail and the Toronto Star in five years,” wrote Ben Schnitzer, then-senior policy analyst with Heritage Canada’s periodical publishing policy division.
Collapse of the Postmedia chain would leave 28 cities without a daily newspaper. The heritage department as late as 2017 opposed any attempt to “bail out industry models that are no longer viable”, said then-Minister Mélanie Joly.