A financial crisis could jeopardize local news in most of Atlantic Canada

Local news media have, of course, been in trouble for years in Canada and around the world. 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 will be left without any traditional news broadcasts, aside from broadcasters.

Much of the problems with the two companies – which are jointly owned and include The Chronicle Herald in Halifax and The Telegram in St. John’s, Newfoundland, as well as The Guardian in Charlottetown – are their own fault. They have refused to cover 40 million Canadian dollars in debt over the past five years, or paid very little; they owe the government just under $5 million in HST; and they have funded operations with employee pension money.

But the move to dissolve the companies, and a corresponding request for creditor protection, comes at a time when news media large and small face another major threat to their survival. My colleague David Streitfeld writes that “there are signs that the very concept of ‘news’ is fading.” While he wrote 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, a journalism lecturer at the University of King’s College in Halifax, told me that the situation created by the possible collapse of the two companies, SaltWire Network and The Halifax Herald, could create a local news desert.

“It’s a real shock,” said Mr. Jobb, who worked as a reporter, editor and columnist at The Chronicle Herald for 20 years. “It is not an announcement of cuts or layoffs or the closure of one or two newspapers. The region may be left with very little media in most of its communities.”

The Chronicle Herald traces its roots back to 1824 and claims to be the oldest independent newspaper still operating in Canada. It is currently owned by Mark Lever, the CEO, and Sarah Dennis. Ms Dennis is a director of The Halifax Herald and SaltWire, Mr Lever’s husband and the fourth generation of her family to control the Halifax newspaper.

In 2017, when the newspaper was in the middle of it a strike that would last almost 19 months, The parent company of The Chronicle Herald purchased – from Transcontinental, a printer based in Montreal – a group of daily and weekly newspapers covering all of Atlantic Canada, with the exception of New Brunswick. The combined 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 what it said was misrepresenting the financial condition of the newspapers. That lawsuit continues. A court ordered SaltWire earlier this month to deposit half a million dollars to ensure Transcontinental’s legal bills are covered if SaltWire loses.

During the expansion, the companies borrowed C$32.7 million from Fiera, a private lender based in Toronto. In court documents, Fiera said the companies had been in default on these loans for five years “and have no path or timeline for repayment of the credit facilities, despite the forbearance of the lenders.”

For now, all newspapers and websites can continue to operate as usual while they pursue creditor protection. Fiera is asking the court to force the sale of all of the companies’ assets to cover the loans.

But Mr. Jobb is among many observers who worry that buyers will not be found for many of the newspapers, or that if they are sold, the newspapers will become a shell of what they once were. According to court documents, SaltWire lost 4.1 million Canadian dollars in its most recent fiscal year. The Herald suffered a loss of $24.8 million, which the company attributed to pension liabilities.

While private broadcasters across Canada have cut back on local news, the CBC continues to provide robust local coverage across Atlantic Canada. But Mr Jobb said this was likely to decline sharply if the Conservatives under Pierre Poilievre come to power at the next election and make good on Mr Poilievre’s oft-repeated promise to cut all government funding for the broadcaster’s English-language services. The CBC currently receives 1.4 billion Canadian dollars from the government for its activities, in both English and French.

But even if the worst happens, there may be one positive development. Earlier this week, my colleagues wrote that a handful of start-up media companies are finding success by learning from past mistakes.

[Read: Sprouts of Hope in a Gloomy Media Landscape]

While The Halifax Examiner is more of a general interest publication than those startups, it could benefit from the vacuum created by SaltWire’s financial collapse.

“Tim Bousquet, the editor there, did a fantastic job,” Mr. Jobb said. “He’s turned it into an award-winning newscast, and it certainly has some reach. Depending on what happens with SaltWire, it may become a must for more people.”

Trans-Canada

Ian Austen, born in Windsor, Ontario, educated in Toronto, lives in Ottawa and has been writing about Canada for The New York Times for 20 years. Follow him on Bluesky @ianausten.bsky.social

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