HALIFAX - The recent decision by SaltWire Network Inc., Atlantic Canada's largest newspaper company, to seek protection from its creditors is another sign of the decline of the business and the growing threat to local journalism, experts said Tuesday.
"We're seeing a resurgence in a steady spate of closings and scaling back of local news operations," said April Lindgren, a professor with Toronto Metropolitan University's journalism program. "If anything, it's at an accelerated pace."
SaltWire publishes four daily newspapers: the Chronicle Herald in Halifax; the Cape Breton Post in Sydney, N.S.; the Guardian in Charlottetown and the Telegram in St. John’s, N.L. — as well as 14 weekly publications in every Atlantic province except New Brunswick.
On Monday, a private equity firm that has lent money to SaltWire filed documents in the Supreme Court of Nova Scotia to initiate insolvency proceedings against the Halifax-based company. The Fiera Private Debt Fund claims SaltWire owes the firm tens of millions of dollars after several years of mismanagement.
"It points to the continued peril of local journalism in any format these days," said Lindgren, principal investigator for the Local News Research Project, which tracks the fate of newspapers, broadcast outlets and online news sources across Canada.
SaltWire's chief operating officer, Ian Scott, has said the company is facing "unprecedented challenges." However, he said business will continue as usual as the company hopes to restructure its operations and finances.
Lindgren said many media businesses resumed cutting costs and shutting down operations after the pandemic, when government subsidies dried up. Meanwhile, advertising revenue has not recovered to pre-pandemic levels, and potential readers have shown a recent reluctance to pay for digital subscriptions, she said.
As a result, the mainstream media's business model remains in tatters as digital platforms such as Meta and Google continue to gobble up advertising dollars.
In August 2023, Quebec-based Métro Média suspended operations at its more than 30 local publications, including the Journal Métro and 16 print weeklies. The following month, the company announced its pending bankruptcy, ending its coverage of local government in parts of the province's two largest cities
In December 2023, creditors of Toronto-based Metroland Media Group voted to approve the company's restructuring proposal after the newspaper chain announced cuts to 60 per cent of its workforce — about 600 jobs — and a move to a digital-only model. The changes left large swaths of Ontario without their local papers.
According to Lindgren's research, between 2008 and Feb. 1, 2024, a total of 518 local news operations have closed in 344 communities across Canada. Still, 224 new local news outlets were launched during that time frame — a net loss of 294.
Willy Palov, president of the Halifax Typographical Union, said that when he started working at the Chronicle Herald almost 30 years ago, the newspaper had 100 reporters and editors on staff. Today, there are 24 unionized multimedia journalists like himself, as well as a number of non-unionized production and editorial staff.
"We've had to make a lot of choices on our coverage, but the people who still work there feel that we produce a good product," said Palov, whose union local is part of the ºÚÁϳԹÏÍø branch of the Communications Workers of America.
Palov said he's hoping the restructuring process will keep SaltWire alive.
"Our priority is to stay employed ... and whether that's with the current ownership or new owners, that's out of our control. But the worst-case is that this is the end of the line."
Palov stressed that SaltWire's publications have been transitioning to digital platforms since April 2017 when the Chronicle Herald's owners announced they would buy more than two dozen newspapers from Quebec-based Transcontinental Inc., a move that created the SaltWire network.
"The newspaper business and its physical product that you can hold in your hand is changing," he said. "We feel our information is reliable and more engaging ... What you see on Twitter or Facebook/Meta, Instagram or Reddit, you can't really be sure of its accuracy."
Brad Works, a journalism instructor at Holland College in Prince Edward Island, said there are many possible outcomes for SaltWire. But in general, Works said local news is critically undervalued.
Local newspapers, he said, "are part of the fabric that holds a community together."
“Go into a community that used to have a newspaper and no longer does. Suddenly, no one is holding those local politicians to account in town council meetings ... No one is going to the local high school to cover the championship game. No one is telling the stories of the communities outside of the major markets."
Across Atlantic Canada, the outlets providing those stories are largely SaltWire papers, Works said: “So any loss of that would be detrimental to those communities.â€
Susan Newhook, a retired journalism professor who taught at the University of King's College in Halifax, said the big stories that make national headlines typically start from local news stories.
"Local news for journalism is the roots that feed the whole tree," Newhook said in an interview. "When you don't have strong local news anymore, the network won't know what's going on here. The national papers won't know what's going on here."
In court documents, the Fiera Private Debt Fund said SaltWire and The Halifax Herald Ltd. together owe it $32.7 million, plus almost $600,000 of accrued and outstanding interest.
As well, Fiera has alleged senior SaltWire managers used employee pension funds for operations and failed to remit HST, among other allegations.
This report by ºÚÁϳԹÏÍø was first published March 12, 2024.
— With files from Sarah Smellie in St. John's, N.L.
Note to readers: This is a corrected story. A previous version stated there was a net loss of 120 news outlets between 2008 and Feb. 1, 2024, but the correct figure is 294.
