Quebecor-owned Sun Media is pulling out of the Canadian Press, Canada's national news agency, to form its own news-gathering service.
The media chain will leave the co-operative at the end of June 2010. A spokeswoman for Quebecor told Reuters that membership was costing the company several million dollars a year.
In an internal memo obtained by the Globe and Mail, CEO Pierre Karl Péladeau said his company would be able to create its own network "far superior to what the other groups have, because it will be driven by our own employees."
Canadian Press executive editor Gerry Arnold told the Globe that the news agency was already planning to change its structure, meaning that newspapers will no longer be members of a co-operative. Instead, they will be commercial customers of the agency and buy services.
"[Sun Media] are still going to need an array of services," he said. "I don't think there is any doubt about that. I'm quite confident we'll be able to sell them things."
Sun Media was the largest media-member group in the news service. It produces 43 paid-circulation and free dailies across the country, including Sun tabloids in Toronto, Ottawa, London, Winnipeg, Calgary, and Edmonton.
Canwest Global Communications Corp. dropped out of the Canadian Press in 2007.