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The Committees Results – Centralization of Media Ownership in Canada – Part 4

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In part 3, we looked at the specific case of the report published by the Canadian Media Guild, speaking out against the centralization of Canadian media. This part will attempt to cement the evidence of the imminent dangers due to the centralization of media and the inefficiencies the broadcasting regulator – the CRTC at the time. The primary document used is the Senate Committee report on the Canadian News Media, published in 2006.

Final Report on the Canadian News Media

In 2006, the Canadian Senate released a report on the state of Canada’s media titled the final report on the Canadian news media. The 99 page report stated the following,

In Canada, Section 2 of the Charter of Rights and Freedoms guarantees not only freedom of expression but also freedom of the press and other communications media. Canadians are fortunate to have these protections; this country has a long tradition of excellence in journalism, and can be proud of the overall quality of its news media. Innovations in technology coupled with recent changes in the ownership of certain news media groups in Canada, however, have raised some concerns and questions. These include: Will the diversity of ownership and of shared information be restricted? Will the diversity of viewpoints be reduced? Will smaller and more remote regions lose out in the new world of much larger media corporations?

In Section C, the document addressed the issues on various topics. Some of the biggest issues included:

  • On media concentration. A number of witnesses criticized the Competition Bureau, and the Canadian Radio-television and Telecommunications Commission (CRTC) for failing to address the issue adequately. Some of the most vocal came from journalists.
  • On the national public broadcaster. The Committee heard that the CBC was hammered with inadequate funding, an unclear role and mandate, and the Corporation’s reduced coverage of local and regional news were the most common concerns raised by witnesses.
  • On the legal and professional environment for working journalists. Witnesses stated there was concern over the impact of the legal system on the work of journalists, such as problems with access to information laws, the absence of adequate whistleblower legislation, the absence of appropriate policies to protect journalists from police searches, and Section 4 of the Security of Information Act, which made it a crime for a journalist to possess a government secret.

The Committee also recognized the importance of sustainable news media organizations, and did not agree, that the unfettered free market is as optimal or benign as its proponents sometimes argue. Consolidation, or the centralization, of some activities, is different from concentration and the Committee has seen evidence that there are news media organizations with excessively dominant positions within individual Canadian markets. Such concentration of ownership could have negative consequences for the public interest. The lack of appropriate regulation has led to the present situation

In the past, many local newspapers had correspondents in Ottawa to cover federal news of  consequence  to  their  local  audiences.  The report acknowledged that in today’s time, most  newspaper  chains  provided  the majority  of  their  coverage  of  federal  and parliamentary  activities  from  a  single  bureau. While this policy undoubtedly cut costs, some witnesses told the Committee that it may also have negative consequences.

Fragmentary  evidence  was  provided  in  a  submission  to  the  Committee  by  a  former journalist,  Professor  Christopher  Waddell  of  Carleton  University. Professor  Waddell examined  federal  election  voter  turnout  in  three  Ontario  cities  where  local  newspapers previously had Ottawa bureaus.

He found that the decline in voter turnout was greater in cities that lost their national bureau than it was either in Ontario at large or in a sample of communities whose newspapers had never had Ottawa bureaus.

Also an important finding, was that in some cases, bureaus covering provincial legislatures had been closed or reduced. In Vancouver, for example, the Committee heard that the city’s major dailies, the Sun and the Province, no longer had reporters at the provincial legislature in Victoria and instead depended on their sister paper, the Victoria Times-Colonist, for coverage.

The Committee was  also  told  that  the  Province  no  longer  had a  forestry  reporter,  even  though  forestry represents one of the province’s most important economic industries.

The report also mentioned an important fact. Centralization can also occur at the local level. The Committee was told that the Gesca newspaper  group  in  Quebec reduced  local  coverage  outside  Montreal.  In  Halifax, witnesses told of newsroom staff being cut by 75 per cent and then being called upon to provide newscasts for two or three additional private radio stations.

Several witnesses also appeared before the Committee to express concern about the potential loss of diversity in analysis and opinion. These concerns were heightened by CanWest Global’s 2001 announcement that national editorials would be featured two or three times a week in its daily newspapers. Under this policy, CanWest’s English-language papers would not be allowed to publish dissenting editorials.

CanWest had later withdrawn the national editorials of its own accord, however the initial announcement aroused great controversy amoung journalists. Some of the columnists who publicly disagreed with the policy had their columns dropped from the papers, even though the company had said that divergent views would be permitted on op-ed pages.

At the  Montreal  Gazette,  journalists  protested  against  the  policy  by  withholding  their bylines.

In  response,  the  paper’s  management  posted  a  memo  warning  employees  that public statements criticizing the policy:

violate the legal requirement for primary fidelity to the employer. Case law supports sanctions, including suspension or termination, against those who persist in disregarding their obligations to the employer after clear warning. …No one, journalist or otherwise, has the right to work at The Gazette. It is a privilege that carries with it the obligations of prudence, diligence, honesty and fidelity to the employer.

 

As the Senate Committee found, however correct these observations may have been in law, this was a clear message that dissent from the views of head office was a firing offence. As several witnesses reminded the Committee, the greater the media concentration, the harder it was for a journalist to find work elsewhere.

There were two  federal  agencies  to administer  the  legislation  and  regulations  that  have  an  impact  on the  corporate  practices  of  Canadian  news  gathering  organizations.  The  Competition Bureau  was  responsible  for  matters  relating  to  the  Competition  Act,  including  media mergers  that  might  affect  competitive  markets.  The  CRTC  regulated  the  broadcasting system; and changes of ownership that involved broadcasting licences required its approval.

The Competition Bureau applied a generalized form of economic analysis of individual firms’ behaviour to judge whether a particular market was competitive. As it explained in a submission to the Committee, prices were used to gauge the conditions in a market for goods or services. In the media market, where radio, tv, and some newspapers are supplied free of charge, the Bureau’s focus price was generally the price of advertising.

But as the Committee notes, the majority of readers buy a newspaper for content, not the advertising. Thus, a principal public interest about the news media should be the diversity of news and opinion.

The Committee also found, that the way the Competition Bureau defined a market may also impede it from preventing anti-competitive practices in the Canadian news media industry.

The Committee found that the  Competition Bureau’s general analytical framework may lead it to define local news markets in a way that was detrimental to particular regional or national markets. This definition of the news market, combined with the potentially misleading analysis of prices  in  the  advertising  market,  led  to  significant  concentration  of  ownership  of various  media  in  Canada,  notably  community  newspapers,  in  several  regions.

For example,  the  2004  decision  involving  Transcontinental  Inc.  and  Optipress  Inc.  left Transcontinental with control of every daily and weekly paper in Newfoundland

The Competition Bureau’s operating procedures may have been well suited to analysing most markets for goods and services in Canada, but not the news media market. The Bureau’s prescribed frame of reference – what some would have called a silo approach –missed a critical dimension of news and information, namely, the importance of the plurality of owners and the diversity of voices, not just in a given community but in the wider regional and national landscape.

This was in sharp contrast to the regulatory regimes in countries such as France, the United Kingdom,  Germany,  Australia  and  the  United  States.  Since each  of  those  countries  had  laws and regulations that questioned or prevented high levels of ownership concentration in media markets.

Further, as  for  media  concentration  and  cross-media  ownership,  the  current  regulatory  system  offered  little  protection  against  particular  adverse  effects  of  ownership  concentration  on  the diversity of voices. This absence of regulatory focus allowed media dominance by individual players in Vancouver, Quebec and New Brunswick and could as easily occur in other Canadian markets; indeed, it already happened in the community newspaper sector.

On the other hand, the broadcasting ownership rules and cross-ownership of a broadcasting and print outlet was the purview of the CRTC. Outside of this, there were no explicit laws that oversaw print media ownership and there was no law preventing one company from cornering the print media market in Canada.

This is where the Senate committee became concerned. If the number of owners diminished and newspapers became beholden to corporate masters or to shareholders only interested in profit, what incentive was there for them to invest in the news?

By the end, the Committee stated the following,

The Committee also agrees that proprietors (private media companies) should run their companies as they see fit, producing products ranging from world class, to mediocre or even terrible. They also are free to espouse whatever political position they choose in their opinion pages. The media’s right to be free from government interference does not extend, however, to a conclusion that proprietors should be allowed to own an excessive proportion of media holdings in a particular market, let alone the national market. Yet the current regulatory regime in Canada does little to prevent such an outcome.

At the end of the report, the Committee also outlined a list of 40 different recommendations that should be followed. Included below are the most relevant ones in the following format (Recommendation Number [#] – R#)

R3 – That  all  news  media  outlets  be  required  to  state  regularly  in  their publications   or   their   broadcast   programming,   the   identity   of   the controlling shareholder(s).

R9 – That the Government of Canada give the CRTC the power to levy fines on broadcasters.

R10 – That the CRTC revise its community television and radio regulations to ensure that access to the broadcasting system is encouraged and that a diversity of news and information programming is available through these services.

R23 – That the government of Canada continue program support to assist smaller and more remote communities to acquire broadband access to Canada’s telecommunications network in areas where the private sector does not provide its services.

R26 – That the Minister of Finance defer capital gains taxes paid on the transfer of family-owned newspapers from generation to generation.

R29 – That the access to information system be: simplified to be more transparent and accessible;  expanded to include crown corporations; and monitored so that costs for searches are reasonable and searches are conducted with reasonable dispatch.

R30 – That all departments and agencies ensure that their employees are made aware of the existence of any whistleblower legislation and its provisions.

R37 – That the system of government advertising in the media be modified to ensure that: criteria for placing advertising are transparent and  ethnic media have the criteria for the placement of advertising in their media explained to them. Government departments dealing with Canada’s ethnic community should examine whether the increased use of ethnic periodicals would be a more efficient way of reaching this audience.

R38 – That federal departments and agencies explore arm’s length partnerships with recognized non-profit or professional journalists’ associations to provide fellowships for mid-career journalists, with the fellows being chosen by journalists or independent third parties

Bottom Line: The Committee found that while  Canada  had  a  number  of  regulations  and  programs  designed  to  prevent  foreign ownership   of   Canadian   media,   corresponding   rules   to   prevent   high   levels   of concentration of ownership of media properties, either in particular regions or within the country as a whole, did not exist.

The Committee also found compelling evidence that the responsible authorities did not use the processes available to them to limit media concentration. Also, the Committee saw a public interest in having a plurality of owners. There was also a public interest in complementing private sector news organizations with a national public broadcaster (CBC).

Part 5 will demonstrate, that no matter how many Committee’s or Commission’s were set up, history would repeat itself if measures were not taken quickly enough on this pressing issue.

Contents:

Part 1 – The Blueprint

Part 2 – The Fallen Giant

Part 3 – The Opposition Attacks

Part 5 – History Repeats

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