Using $ 10 million to the Group capital cities Media: Quebecor sued

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Michael Nguyen

On Wednesday 21 February 2018 15:32

UPDATE
On Wednesday 21 February 2018 15:32

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Quebecor Media is turning to the courts to invalidate government aid of $ 10 million granted to the Group capital cities Media (GCM), which would be not only illegal, but also electioneering, according to a motion filed to the court.

“The financial assistance seems to be rather based on political reasons of the government for a provincial election approaching,” says the document filed on Wednesday at the palais de justice of Montreal.

For Quebecor, which owns, among others, The Journal de Montréal and Le Journal de Québec, the executive Board “ignored its rules” in granting this amount in December last year, in the wake of the announcement of a programme of aid to the written press.

This program aims to “stimulate the transformation of business models by supporting the initiation or continuation of the transition to digital companies of the press written information”.

Decree impaired

However, the financial assistance of 10 million dollars to GCM, which holds, among others, The Sun of Quebec – has not been granted within the framework of this program, but has rather been made by decree, in the form of loans administered by Investissement Québec. And even if the executive Council has a certain discretion, it does not have “carte blanche” and must comply with the law, which is not the case here, indicates Quebecor in its application.

“The government can grant ad hoc financial assistance for the realization of projects, but they must submit an “economic interest important for Québec,” says Quebecor is based on a section of the Act respecting Investissement Québec.

The problem is, that the decree does not specify what the financial aid would have such an interest, one can read in the court document, which refers only to the State, and not GCM.

The government has justified government intervention because of the risk of loss of 400 jobs, without, however, indicate how the$ 10 Million would help the problem, is it specified in the query.

“More than that, Claude Gagnon, president and executive director of GCM, has publicly stated that he did not know how many jobs could be saved through the financial aid”, one can read in the court document.

Partisanship

The prime minister Philippe Couillard was on his side defended the loan, pointing out regional information.

“These statements, among others, have all gaits of formulas designed to seduce the electorate of quebec to the provincial election approaches, shortcomings and non-partisanship of the exercise of the discretionary power conferred on the executive Council,” says the court document.

By way of a press release, the president and chief executive officer of Quebecor, Pierre Karl Péladeau, has criticised the way that government which is “the arbitrary, the more total and favoritism in the most blatant”.

“The government has made, only a few months before the next election campaign, in an abusive manner by granting to the room, without that the criteria are established and known, financial assistance to a group of press given to us”, he said.

To ensure the sustainability of the print media, Quebecor said that a coalition had made several demands, including the implementation of tax credits covering the production of information, or digital investments.

The abolition of the GST and the QST for the newspapers sold had been proposed, while maintaining the obligation for municipalities to publish public notices in newspapers.

“In a context where the press lives at the time of an economic crisis and a crisis of confidence, every effort must be made to ensure that the actions taken by our governments in support of the media help to strengthen rather than to undermine the confidence of the population towards their print media, concluded Mr. Péladeau in the press release. The aid granted to Group Capitals Media miss the target in all respects.”

The request will be presented to a judge of the superior Court of Quebec in the coming weeks.