CORRECTED-As Canada's newsrooms shrink, concerns over coverage grow

(Corrects to show Mélanie Joly is heritage minister, not the
minister's spokeswoman, in paragraph 9)
By Alastair Sharp
TORONTO, Feb 23 (Reuters) - Canadian newsrooms are shrinking
in increasing numbers as an oil shock rocks the economy and
curtails the appetite of advertisers already distracted by
digital outlets.
The media retreat is touching small-city newspapers
thousands of kilometers apart and television stations tucked
into larger telecom companies that struggle to turn a profit.
Last month, the Black Press' BLKPRP.UL Nanaimo Daily News
closed and Torstar's TSb.TO Guelph Mercury stopped publishing
a broadsheet edition, keeping its website going with content
from other outlets.
Those cuts came just as the country's biggest chain,
Postmedia Network Canada Corp PNCa.TO , fired 90 journalists
and merged its tabloid and broadsheet newsrooms in four major
cities, including the capital Ottawa.
The moves from the indebted publisher came less than a year
after the competition watchdog approved its purchase of the Sun
tabloid chain and have led to accusations it has broken a
promise to retain each paper as a distinct operation.
"The promise was that they weren't going to do this," said
Brian Masse, a New Democratic Party parliamentarian said ahead
of a hearing on Tuesday that will examine how Canadians are
informed by the media, the erosion of local news reporting and
the consequences of news media concentration.
A Postmedia spokeswoman did not respond to requests for
comment. The Competition Bureau said it had not sought
assurances the publisher would not fire journalists or close
newspapers.
The sharp reduction in the size of Canada's press corps also
has some questioning the media's ability to investigate and
report on corporate malfeasance and political chicanery.
Mélanie Joly, the Canadian heritage minister, said via a
spokesman that "journalism plays a central role in a healthy
democracy" and that she plans consultations on how a shift to
digital is impacting Canada's creative, media and production
sectors.
The heritage committee plans at least 10 meetings to hear
from experts and pull together recommendations.
"What we're concerned about, as an industry and I think as a
society, is the loss of public interest journalism," said John
Hinds, head of Newspapers Canada, an industry group representing
publishers.
Hinds wants the government to retake its role as the
industry's largest advertiser, spending that was cut under the
previous Conservative government, and create tax incentives for
local coverage.
Print advertising revenues held up better in Canada versus
the United States in the aftermath of the 2007-2008 financial
crisis but are now sinking faster, according to data from
Newspapers Canada.
U.S. print revenues slumped 40 percent between 2007 and
2009, compared with 21 percent in Canada. But in the last two
years, Canada is down 31 percent while U.S. sales eased 13
percent.
Concentration in Canada is roughly double that in the United
States, according to Dwayne Winseck, a Carleton University
professor and director of the Canadian Media Concentration
Research Project.
"What sets Canada out as an outlier is the extent of
vertical integration," he said. "The companies that own the
pipes also own the content providers whose messages are flowing
over those pipes."
The Canadian Radio-television and Telecommunications
Commission last week took a swipe at such companies - including
BCE Inc BCE.TO and Rogers Communications RCIb.TO , both of
which have cut hundreds of media jobs recently - saying they
must invest in robust news operations or be held accountable
ahead of license renewals due next year.
A major media union wants even more forceful action, calling
for Postmedia's breakup and tougher rules against concentration
and the type of leveraged buyout that helped Postmedia gain
control of roughly one-third of Canada's English-language daily
newspapers.
"I'm absolutely stunned it's legal, it shouldn't be," said
Martin O'Hanlon, president of CWA Canada, which represents
roughly 6,000 print, digital and broadcast media workers,
including at Thomson Reuters. "And we're going to be pushing the
government with all our might on that front."