Heritage Committee MPs want action on Rogers-Shaw merger’s impact on local and community news.

May 17, 2022

Today Heritage Committee (CHPC) MPs tabled their Report in the House of Commons following several days of hearings held on the Rogers-Shaw merger. While expressing a perfunctory opposition to the merger of broadcasting assets already approved by the CRTC, MPs of all parties are demanding the Liberal government mitigate the merger’s impact on local and community news coverage.

The significant threat to local news coverage by the merger will be felt in eight local markets —-Kelowna, Lethbridge, Saskatoon, Regina, Kingston, Peterborough, St.John and Halifax — currently served by Shaw-owned Global News stations that are not part of the merger. Because of existing CRTC regulations, $13 million of the Global network’s annual $131 million news budget will transfer automatically in a windfall to Rogers’ four western City TV stations in Vancouver, Edmonton, Calgary and Winnipeg.

(I’ve written previously in this blog about the complexities of CRTC funding rules for local and community news in the context of the Rogers-Shaw merger. There’s a summary at the bottom of this post.)

There’s some retail politics being played by Heritage MPs for whom support of local news is a must. To their credit (particularly Chair and Liberal MP Hedy Fry) the CHPC has long been an advocate of better regulatory and government funding of local news. Its 2017 Report was two years ahead of the Liberal cabinet in demanding support for journalism.

The Committee’s roster of mitigation measures address the eight local Global News markets, but also other hyperlocal community TV markets starved for news coverage:

• Juicing the government journalism funding program “Local Journalism Initiative,” a modest $10 million per year fund that focusses on “news poverty” regions and communities.
• Expanding the much larger federal journalist salary subsidy program to include broadcast journalism (currently it only applies to written journalism).
• Diverting money from the Canada Media Fund (co-funded by cable companies and the federal government to support film production) to local news.
• Reversing the impact of the CRTC’s 2016 decision that allowed Shaw Cable to reassign its $13 million funding of community news stations to its Global stations. This would require the CRTC to establish a new Community News fund.
• Directing the CRTC to increase cable company contributions to the Independent Local News Fund which will now have the eight Global stations applying as newly independent stations (no longer owned by a cable company) to replace the lost $13 million funding that is moving from their former parent Shaw Cable to Rogers.

MPs would probably not deny the scattershot nature of their recommendations. That’s because funding of local TV news coverage is a patchwork of band-aid solutions developed by the CRTC over the last decade in response to year after year loss margins of nearly 10%.

For advocates of local news, it’s good timing that Heritage MPs are alive to the plight of broadcast journalism. As I wrote in a recent post, they will have an opportunity to do something about it when they convene to review Bill C-11.

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How the CRTC makes cable companies and broadcasters sponsor local news coverage:

– Major networks Bell CTV, Rogers City-TV, Québecor TVA and Shaw/Corus’ Global News must spend 11% of total TV budgets (about $382 million) on news coverage by their 60 local stations.

– Approximately 25 independent local stations unaffiliated with major networks are eligible to draw from the $20 million Independent Local News Fund. The fund is underwritten by cable company cash. After Global is orphaned by the Rogers-Shaw merger, its eight local stations are expected to apply to the ILNF for an reapportioned share of the $20 million pie.

– Community TV stations owned by cable companies were for many years the recipients of parent company cash mandated by the CRTC but in 2016 the Commission, in response to intense advocacy on behalf of local TV stations, robbed Peter to pay Paul and gave the option to cable companies to reassign those community TV funds to their own local stations. Shaw Cable took the CRTC up on its offer, transferring $13 million from their community stations to their Global local stations. If and when Shaw Cable is merged with Rogers Cable, that money will be spent by Rogers on its City TV stations.

– The Liberals’ $10 million annual “Local Journalism Initiative” to fund journalism in under serviced communities includes funding some community TV stations.