(Satiric AI illustration. The painting in the cabinet is fromToiletpaperby Cattelan and Ferrari)
September 16, 2026
For the moment, the American trade war launched against Canada feels like it’s in a lull.
Trump’s retaliation to Canada’s September 8th retaliation was modest (although that’s no consolation to Brampton’s auto workers).
Of course that could change in a heartbeat. No doubt the Prime Minister’s team has a ready list of “break glass in case of emergency” retaliatory measures, just in case.
It’s an opportunity to seriously consider a media policy proposed many times since Google and Facebook seized most of the Canadian ad market: legislating the extension of our Buy Canada tax deductions of advertising purchases from legacy media to also cover online media.
This idea, which goes by the moniker “close the loophole,” proposes to correct the omission of online advertising in sections 19, 19.01, and 19.1 of the Income Tax code, plugging a $2 billion hole in the corporate tax write-offs that Canadian companies are allowed when buying ads in foreign media like Google, Facebook, the online BBC, and the online New York Times.
Under the decades old tax code provisions as they stand, Canadian companies buying ads in legacy media only get the write off —-setting off advertising expenses against taxable revenues— if they buy ads in Canadian legacy media.
Here’s how the Canadian tax code works now:
Section 19 says that only ads bought by Canadian companies in Canadian owned newspapers are eligible to be deducted from taxable income.
Section 19.1 says that ads purchased in a “foreign broadcasting undertaking” aren’t eligible for set off either. In other words, only ad buys in Canadian broadcasting programs are eligible.
What’s not caught by those two provisions is “periodicals,” meaning print magazines. That’s done a little differently:
Section 19.01 says that when Canadian companies buy ads in foreign magazines distributed in Canada they can only write off the expense if the magazine has at least 80% Canadian editorial content, i.e. written by a Canadian for the Canadian market only. If the magazine is less than 80% CanCon, the Canadian ad buyer can still deduct 50% of the cost.
The unique provisions for magazines is an outcome of a famous trade dispute between Canada and the US in the late 1990s. You can read MediaPolicy’s explainer here.
The argument in favour of extending these Buy Canada rules to online media has been made for many years bymanyadvocates (including me when I was spokesperson for Unifor on media issues).
Forgive me for burying the lede, but the argument is being made again by a large group of Canadian publishers and broadcasters in a federal budget submission.
It appears to be a grass roots movement. The budget pitch was organized by Jim Barr of Seekers Media and Chuck Lapointe of Narcity. An online petition-style endorsement netted signatures from over big and small 50 news organizations, here.
What’s novel about their approach is the twinning of a close-the-loophole proposal with a federal ad voucher program —-partial cash reimbursement—- for Canadian businesses buying ads in legacy or online Canadian media, including news media.
The proposal scales the size of the voucher, a refundable tax credit for ad buys, ranging from 75% reimbursement for small Canadian companies to 30% for large. That puts an emphasis on local ad buying by Main Street retailers, less on national buys by big Canadian chains.
According to the pitch, the estimated $2.2 billion banked by the federal treasury after removing the write off for buying ads in Google and Facebook pays for the unspecified cost of the ad voucher program. “The net cost to the government is zero,” the submission says.
That’s a speculative costing, beyond the means of the media organizations who are advocating the trade-off and perhaps unknowable except to the Department of Finance.
Back in the spring, Senator Andrew Cardozo and I took a look at these issues in our report, Making News Media Sustainable.
On closing the section 19 loophole in favour of a Buy Canada ad purchasing tax policy for online media, we made three different proposals:
Do nothing for now. We’re in a trade war and it’s a hand grenade.
Do it now but support it with a government plan to grow online Canadian media platforms that can provide Canadian advertisers with a substitute for Google and Facebook.
Do it the way it was done in 1998 for print magazines, which means continuing the write off for ad buys in foreign-owned media if their editorial policy is to publish and promote Canadian content.
This last point has policy potential as it plugs in directly to the CRTC’s order to US online undertakings like Netflix and Roku to make Canadian content more discoverable and visible on their platforms.
As for the ad buying voucher, the Senator and I advocated for what we called market facing support for news journalism. One proposal (only a single paragraph) suggested an ad voucher program. One of the merits cited was that ad purchases can be an effective proxy for public demand and choice of news publications.
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As long as I can remember, Canadian critics of the Online Streaming Act and the last sixty years of regulatory measures supporting Canadian culture have rarely articulated what they would do differently, were it left up to them.
The thinking behind the critique of Canadian cultural policy must be one of two things.
It could be a steadfast belief that Canadians deserve a free and unregulated market where Canadian art and artists compete with American content without assistance.
Maybe in this wide open North American market we would choose lots of Canadian content, maybe not. US Trade Representative Jamieson Greer recently described this as “letting capitalism do its thing and let people choose.”
If not this open borders strategy for culture, the argument that there’s an alternative to the Online Streaming Act remains an unspoken “something else.”
The Carney government is preparing to do something else. In the most Carneyesque way.
In August, Heritage Canada quietly circulated a series of seven discussion papers to a select list of industry stakeholders in Canada’s audio-visual world. No one claims authorship but the unpublished PDF document was generated by Lisa Gotlieb, Heritage Canada’s Manager of Audio Visual Policy.
The proposal is to build up Canadian film and television production companies that make visibly themed Canadian film and television content, exploit AI technology in both production and distribution, retain their copyright and intellectual property for future growth, and cultivate audiences loyal to the brand that producers nurture.
Reduced to a baseball analogy, the idea is to field a contact hitting offence like last season’s Toronto Blue Jays. A team that steadily generates baserunners and rejects the swing, miss and home run strategy.
The current model of funding Canadian content doesn’t get a warm applause in these documents. In fact it gets politely disparaged as “project by project” funding of CanCon shows that doesn’t adequately incentivize or reward IP-based branding, iconically Canadian content, growth and audience.
The policy narrative scans strongly binary —old system bad, new system good— and I suggest they be read with a critical eye. Part one of seven is available here.
Less fundamentally, shade is thrown on the traditional “headcount” formula that ties government and industry financing to productions hiring mostly Canadian producers, writers, directors, actors and film crews but without a formal commitment to visibly Canadian terrain and screenplays.
In the new world, Canadian film and television producers would become a feisty We-the-North of scaled up studios that would not sell off library rights or global first release to US streamers. That might induce Canadian producers to stop putting quite so much American cream in their CanCon coffee (think of the nationally androgynous Schitt’sCreek).
Relentlessly throughout the policy papers, the authors tout a growth agenda. That rhymes with Carney’s banker vocabulary of investment, building, growth, global markets, and a measurable return on public investment.
Once you get past Carney vibe, there are some engaging ideas.
The most fundamental is to restructure the current funding model that combines money and gatekeeping rules from four federal agencies, the CRTC, the Canada Media Fund ($216M in federal spending), Telefilm support for cultural exports ($150M), the National Film Board ($72M) and the federal government’s CAVCO production tax credits ($540M).
As industry insider Brad Danks explained back in June in a MediaPolicy interview (or see a refreshed version in Broadcast Dialogue), the current funding system places all bets on production financing of shows and none of it on rewarding success. Success is defined as the build out of Canadian platform distribution and audience development. Or the aggressive adoption of AI technology. It’s a strategy for cultural sovereignty that is implicit in encouraging producers to tighten their grip on cradle-to-grave distribution rights instead of cashing out these rights piecemeal to Netflix and other global platforms.
Somebody has to quarterback this reformed funding model. The authors of the Heritage documents explicitly endorse an expanded National Film Board (perhaps merging the 300 staff of the Heritage CAVCO office, the Canada Media Fund and Telefilm into the much larger NFB).
The policy papers go out of their way to laud the NFB’s unique combination of policy expertise and in-house content production. I’m guessing authors regard Telefilm and the CMF as the guardians of the old system that Heritage wants to disrupt.
The papers also moot the possibility of the federal government treating the audio-visual industry as a major investment opportunity worthy of a reliable stream of earmarked infrastructure cash from ISED or regional development funds. Although the authors don’t mention the $600 million pot of cultural cash that Carney announced in June, that is also a possible source of recalibrated program spending in the new model.
Most of these policy ideas can be traced back to ex-Deputy Minister Isabelle Mondou’s recommendations to former culture and identity minister Steven Guilbeault who approved them before leaving cabinet in late 2025. The policy momentum within Heritage is in place and the Prime Minister’s “build it” philosophy would seem hospitable to the change. Take note: Mondou now works in the PMO.
The trade war is also an accelerant to change. President Trump has his eye on Canada’s share of global streamer film and television productions. He is supporting Hollywood’s request that US Congress legislate a federal film and television production tax credit to draw more work stateside.
If Congress acts, film and television producers in Canada, the United Kingdom and European countries could all lose some production volume to Hollywood and other US states.
That would make Heritage’s “build it” agenda for home grown CanCon production a more pressing matter. According to Heritage, foreign film and television production in Canada is ten times the spending on Canadian content although only half of the total hours of industry employment.
It’s no coincidence that Deputy Minister Mondou warned minister Guilbeault that “the balance between Canadian content and Foreign Location and Service Production [in Canada], has shifted in favour of Foreign Location and Service Production which is vulnerable to the current tariff threat and other protectionist measures coming from the United States.”
We will see if the Heritage proposal gels in time for November’s federal budget.
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The epithet “Carpetbaggers” has an evocative history in the United States.
It was how post-Civil War white southerners described opportunistic northern merchants who descended upon the war-devastated former slave states.
The same vitriolic insult was conferred upon the corps of northern abolitionists and office-seekers who arrived to mobilize the Black vote for newly created state legislatures, the entire chapter in American history known since as the Reconstruction era.
After Reconstruction ended in the 1876 sell-out of Black civil rights and the wage re-enslavement of African Americans, the term Carpetbaggers became more generic. Wikipedia describes it as “denot[ing] people who move into a new area for purely economic or political reasons despite having no ties to that place.”
Lately the California-headquartered streamers operating in Canada have earned the Carpetbagger sobriquet.
The streamers don’t own our broadcasting market, not yet. Canadian owned television and radio broadcasting is slowly diminishing but it remains significant. Our cable and satellite-borne audio visual signals reach 9 million out of 15 million Canadian households.
But Netflix reportedly reaches about 9.8 million Canadian subscribers. With the grey market in password sharing, that is probably well over 10 million households. The other US streamers Amazon Prime (7.5m), Disney (6m) and Paramount (5.3m) are all ahead of the HBO-boosted Bell Crave (5m). According to the CRTC, three out of four Canadians reported subscribing to an audio-visual streaming service, compared to a little over half of Canadian households (58%) subscribing to a traditional television service.
That dominant American share of our streaming market means that Canadian subscriber dollars, advertising revenues, and reinvestment capacity generated by Canadian profits all flow south.
As a caveat to that generalization, there is a debate (impoverished by the lack of data) over how much money Netflix and the streamers voluntarily invest in English language Canadian content as equity partners. Canadians are also familiar with the occasional appearance of Canadian themed Netflix originals such as the upcoming Below or Amazon’s The Sticky.
But the yawning gap between how much Canadian broadcasters are required by the CRTC to invest in Canadian content —-30% of their revenue—- and the goose egg obligations for streamers can only be described as Carpetbagging.
The federal government has taken a couple of stabs at remedying that extraction of value.
One attempt was the ill-fated $1 billion per year Digital Services Tax on the streamers (but also other digital businesses like Uber).
When this kind of tax was developed a decade ago in Europe, it was a counterweight to American Big Tech’s avoidance of local corporate taxes by parking their profits in tax havens. By the time Canada got around to legislating our own DST, the federal Liberals never clarified whether it was plugging the corporate tax hole or simply reshoring a share of the streamers’ revenue extraction from Canada.
As you know, Prime Minister Carney gave the DST away in June 2025 when President Trump demanded it. I am sure Carney now regrets that as a bad bet on the President’s intentions.
The second attempt to remedy the California streamers’ value extraction was the Online Streaming Act.
You know the story here. The latest chapter is that in 2024 the CRTC imposed a five per cent cash levy on the US streamers, the same that Canadian cable companies pay. Those levies feed the Canada Media Fund and a number of similar production funds that finance Canadian content shows. Those shows are made by independent Canadian producers who license them back to Canadian broadcasters and (once the three-year old Online Streaming Act is actually applied) to US streamers. The key point is that the shows are licensed at a lower price because of the media fund money that gets invested up front.
Not good enough for the Carpetbaggers. Even after Mark Carney overruled the CRTC and rid them of the levies, they weren’t satisfied. That was confirmed when the streamers were able to get the White House to push for the evisceration of another Online Streaming Act tool, the surfacing of Canadian content on US streaming platforms, on the very last day of trade talks.
The reason that the streamers deserve the unsavoury Carpetbagger label is because they have worked so hard to earn it.
Before Donald Trump began his second term in 2025, a more compliant Netflix told the CRTC they could live with a two per cent cash levy (provided none of it went to news). Canadian cable companies pay double that, at 4 per cent.
Ah, but that was then and this is now. At the moment, the Netflix position in Canada is no regulation, no obligations. Full value extraction from Canadian subscribers and advertisers.
And to make this happen, the streamers have been able to insinuate their influence into the ground zero of trade talks.
Writing about this back in 2024 in Cartt.ca, I noted the Netflix “strategy appears to be oppose, appeal, and get the attention of the next U.S. president, U.S. Congress and U.S. trade representative.”
And here we are.
***
One of the trade files that went quiet for the last few months was Donald Trump’s threats beginning in 2025 to put a tariff on US movies shot in Canada, destined for the American, Canadian and global markets.
That’s not what the streamers and big studios wanted from him. They like shooting some of their shows abroad in the UK, Canada, and Europe, all of which have world-class production clusters and a Rolidex of trusted production partners. The analogy of the integrated US-Canada automotive market applies here.
The industry backdrop to this is that, post-pandemic, Los Angeles has endured a substantial drop off in its market share of American film and TV production, losing work to other US states and other countries. The end of the “streaming wars” and its profligate spending is also a factor. Some states, like California, have aggressively stepped into the subsidy space in order to reclaim work. But US Congress has not.
It looks like months of federal lobbying has paid off for the streamers because this week President Trump came out in favour of a federal film production tax credit. While California and other US states have increased their own subsidies, the US does not have a federal counterpart. In Canada, we combine federal and provincial production subsidies made available to both Canadian and foreign studios making shows here.
Canada has been smart about building a world class audio-visual production industry. It is in fact our domestic industry’s financial ballast.
To the extent that a US federal subsidy succeeds in American studios reshoring production, that will impact us.
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MediaPolicy has been following the big Meta settlement with 48 US states (Florida is not settling) on the product liability lawsuit against Instagram and Facebook.
Meta’s lawyer is C.J. Mahoney. He was the US Deputy Trade Representative during the 2018 CUSMA talks (isn’t that an interesting connection between Big Tech and the Trump White House!).
The Times story reports that Mahoney stick handled his client’s settlement with the states after individual plaintiffs won the precedent setting jury trials in California and New Mexico resulting in hundreds of millions of dollars of damages awarded against Meta.
From there, it was all downhill sledding for the state Attorneys General.
And importantly for Canada, despite binding ourselves to Big Tech’s section 230 defence in the 2018 CUSMA digital chapter (clause 19.17.2), the reversal of Meta’s fortunes means that the federal Safe Social Media Act Bill C-34 is in principle not a violation of that agreement, vindicated by rulings in the American courts.
Another backbone moment in this story was demonstrated by the state Attorneys General who rebuffed Mahoney’s offer to settle for damages only. They held out for the product safety changes to protect children logging on to Facebook and Instagram. Credit the parent groups and children’s advocates who fought for that and made the states accountable to them.
According to the Times, the settlement’s die was cast before last month’s big trial even began but it took some time to line up agreement from the various states. The key was coming up with a fair allocation of the $18B USD in damages that will go to children’s mental health programs.
In the end, all 49 states fell into line except Texas (which settled separately shortly afterwards) and Florida.
The Florida suit will proceed as will many others, but one would expect that judges will engage in some extraordinary arm twisting in chambers with the plaintiffs’ lawyers to get them to fall in line with the Big Settlement.
Two remaining Big Questions are whether the Meta settlement gets adopted by competitors YouTube, TikTok and Snap and whether the safety upgrades helps Congress get to a deal on federal legislation.
***
Oops.
In my last post I wrote that “a leaked page grab from an internal Canadian Heritage document suggests that the $600 million will cover the $134 million in foregone streamer payments to Canadian audiovisual media funds for broadcast news and Canadian content.”
I made a mistaken assumption about the document’s authorship based onGlobe & Mail journalist Barry Hertz’s tweet about the allocation numbers and Heritage Canada failing to confirm or deny to me when I asked if it was a Heritage document.
I have now discovered that the document in question is in fact an industry stakeholder’s summary of what the stakeholder was told verbally by a Heritage Canada source. The stakeholder contacted me this morning to clarify.
Hertz’s tweet indicates that according to Heritage the numbers cited in the stakeholder document were “not final.” I will leave it there.
***
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The how and why of last Friday’s breakdown in US-Canadian trade talks preoccupied us for most of last week.
The Canadians weighed in on why things went sideways after Trump announced a “deal” several days before the deadline. The Americans spun their narrative in the other direction. Commerce secretary Howard Lutnick’s performance is not to be missed.
It would help to know what was in those negotiating documents that will never become public. Or to start demanding polygraphs that will never be taken.
Without those here is my take, based on what negotiators said and what might have happened.
Carney and Trump talked on the Tuesday night. Clearly they agreed on something. Probably it was some high level numbers on key tariffs. Looking for a public win, Trump couldn’t restrain himself and rushed to announce a deal the next morning. The key thing is that Trump thought he had hooked Carney by giving him enough and that the US would then steamroller the Canadians on the fine print and all of the remaining issues. Saying there was already a deal was part of his strategy.
That is the bargaining dynamic that often occurs when one negotiating party has, or believes it has, the hammer. Trump expected to run the table. If there was any truth to the rumours of the impending demise of the Online News Act, the Canadian team was half expecting the same.
But Trump miscalculated and overreached. On trucks and pickups. On culture. On Canada’s options to make other trade deals without Trump’s permission. This provided an opportunity for Ontario premier Doug Ford to signal Carney that he was about to go offside. Manitoba premier Wab Kinew already was. The Bloc Québécois was making noise about cultural concessions.
When CBC interviewed Trump’s trade envoy Jamieson Greer on Thursday he claimed that the cultural issue embedded in the federal Online Streaming Act —-repeatedly and narrowly confined to “the discoverability of French language content”—- was, shucks, never a big deal for the US.
“It’s the furthest thing from a red line,” Greer told CBC host Rosemary Barton. “We highlighted [it at the end] yes, but our view is you should let capitalism do its thing and let people pick. We know it’s important to people in Quebec….We would not have let it get in the way of a good deal.” (Roll the video from the nine minute mark).
Slick and slippery, yes. But more likely a sign that Trump thought the Canadians were already hooked and would swallow anything to get a deal across the line.
Greer still found time to have another moan to CBC’s Barton about streamer cash payments to Canadian media funds: “What we don’t like is a situation where Canada forces American tech companies to take their earnings to give a percentage to their competitors.”
Yet here Greer was still fixated on them, raising them on both Canadian and US television networks, even after the breakdown of talks and in the same breath in which he claimed that “the French language” issue raised by the federal Online Streaming Act and Québec’s counterpart Bill 109 was no big deal.
Canada’s trade envoy Dominic Leblanc responded to Greer’s claims tactically. He publicly thanked the Americans for taking the streamer issue off the table.
While Leblanc was thanking Greer, the Canadian cultural community was effusively and publicly thanking Carney for fending off the Americans.
Every iota of that effusiveness was proportional to a residual mistrust that the Online Streaming Act and the Online News Act are off the table for good, or that a Prime Minister who would give away the digital services tax for nothing, humiliate the CRTC by overruling their implementation of cash payments, and for Pete’s sake would even submit to a shameless Trump shakedown on a bridge we paid for, might yet fold again on culture.
Reynolds Mastin of the Canadian producers’ union CMPA, which has emerged as the de facto spokesperson for the English-language cultural community, described the near-death of the Online Streaming Act as “an inflection point” for Canadian culture and trade talks.
Mastin also politely chided the Carney government if it had indeed assumed that its climb down on the streamer payments in June had sated the US streamers’ hunger to get rid of the OSA altogether. “Knowing those players as we do, they were not going to say, ‘Thank you very much. We’re done.’ They were only going to regard that as the appetizer.”
This weekend Mastin’s CMPA and another 40 cultural organizations took the time and expense to express their gratitude to Carney “for standing up for Canada’s cultural sovereignty” in full-page newspaper ads. Newsmedia Canada’s Paul Deegan did much the same on the Online News Act.
The Americans may or may not have let go of the cultural concessions. All it would take to revive them is an American reporter asking Trump the question.
Canadians have increasingly seen cultural issues as a defining issue of our dignity and resistance to Trump humiliation, at high levels of support that were already elevated according to year-old public polling.
Meanwhile Carney has his $600 million pot of cultural spending that, contrary to MediaPolicy’s initial skepticism, might actually be doing something more than taking the sting out of his climb down on cultural issues.
A leaked page grab from an internal Canadian Heritage document suggests that the $600 million will cover the $134 million in foregone streamer payments to Canadian audiovisual media funds for broadcast news and Canadian content. But the document also suggests that the remaining “unallocated” $467M is earmarked for “additional audiovisual stabilization funding” and the “audio sector.”
The vagueness of this $467 million commitment may sustain skeptics like myself. But other internal documents from Heritage suggest an earnest and far reaching rethink of how to spend not only the $467M but all of the $850 million in variousfederalprograms for audio visual production on a growth and export strategy for Canadian content.
I’ve buried the lede here. More to come on that.
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On Friday night Mark Carney said no to the “shit deal” that Canadian journalist Jen Gerson warned us might be coming.
In the absence of a lot more information than we’ve already been given, the post-mortem on the breakdown of negotiations will continue to be spun by whomever’s talking, be it Mark Carney or Donald Trump.
Canadian journalist Terry Glavin reminded us this weekend that “there’s also a good reason to be at least somewhat skeptical about the way Prime Minister Carney has explained the impasse, and by all means, be skeptical about the spin put about by sources close to the talks and various Liberal-friendly sock puppets. Peter Menzies, who has spent a lifetime in journalism and media policy, has noticed the ubiquity of “strategic leakers” informing reporters assigned to the trade talks. Menzies advises vigilance.”
Times two, I say (except for the sock puppet comment).
There might have been one such strategic leak last week about where the Online News Act stood in the midst of last week’s negotiations. The answer was: it’s awaiting a formal death announcement.
On Thursday, Toronto Star investigative reporter Justin Ling reported that “sources” (note the plural) were telling him that Carney had already thrown the Online News Act under the bus as part of a projected settlement and that “publishers” had been advised to be “ready for the death” of the bill.
Ling also reported “another source briefed by Canadian officials confirmed that the Online News Act would be a likely concession, but stressed that things could change before Friday’s new deadline.”
Note “likely.”
Unless someone in the source-chain is lying, “likely” and “briefed by Canadian officials” is intended to be reliable information.
I did ask Newsmedia Canada CEO Paul Deegan if indeed publishers were warned by “Canadian officials” about dropping the legislation that pays out $100 million annually to Canadian news outlets.
“I am not aware of any conversation, officially or otherwise, between publishers and government about the future of the Online News Act one way or the other, nor am I aware of any such conversations with any publisher or group of publishers,” he told me.
“Ministers and staff were extremely tight-lipped, which was entirely expected and appropriate, given the sensitivity of the final negotiations which were underway in Washington.”
On Friday morning the reaction in the Québec media to Ling’s tip off was of mushroom cloud dimensions. Among the Québécois opinion-movers pushing the red button were the respected University of Montréal law professor Pierre Trudel and Bloc MP Martin Champoux. The Bloc’s press release was punctuated by the words “appeasement” and “capitulation.”
If the Québec branch of the federal Liberal Party has one job it is, at the very least, not to severely aggravate nationalist sentiments on matters of media and culture. The toss-up federal by-election in Chicoutimi is next Monday, a separatist party leads the polls going into a provincial election at the beginning of October, and there will be three more federal by-elections in Québec later this fall.
No doubt all of this circulated back to the Prime Minister’s Office and was likely just one more thing to remind Carney that public opinion polling was making it clear he had misread the room of Canadian opinion on taking significant tariffs and making cultural concessions.
In the aftermath of the breakdown on Friday night, Ontario Premier Doug Ford went on television to make it clear that he’d been uncomfortable all of last week about the projected landing spot on auto, steel and aluminium tariffs. The landing spot was 15% for auto and 25% for steel and aluminum, effectively the global benchmark for Trump tariffs. Don’t bother with the nuances to those heart-stopping numbers.
On culture, Carney told reporters following his Saturday morning press conference that the sticking points included “the French language” and “culture.” He offered no specifics (although in one of his answers he referred to the American hostility to bilingual product labelling).
Whatever cultural concessions were in the works, the deal is off for now.
As trade lawyer Barry Appleton wrote this weekend, “the public got there first.” Carney got there later.
“Polling in the week of the negotiation put support for making concessions at thirty-nine per cent,” noted Appleton. “Six in ten Canadians were against conceding further before the deadline arrived. A government facing that number was discovering the edge of what it could sign more than it was choosing refusal.”
This disconnect with public opinion, and the popular appetite to stand up to Trump’s aggression, has been Carney’s weakness going back to his 2025 election. It’s responsible for both the surrender of the digital services tax and overruling the CRTC on streamer contributions to Canadian content.
I can offer from my own career experience as a trade union negotiator: ninety per cent of the job is to get the right read on your membership. It’s not only that you are accountable to the rank and file, as Carney is to Canadians, but more importantly their willingness to fight and take pain is your bargaining power. Overestimate or underestimate that fighting spirit at your peril.
Carney’s “I’m the adult in the room” persona is what got him elected. But it’s clear now he underestimated the Canadian people and was on the verge of presenting us with a bad deal as a fait accompli without giving us the opportunity to stand up to an American government brazenly determined to turn us into a vassal state, a Belarus to their Russia, when we’d rather be Ukraine.
I’m not convinced the Prime Minister has got the message yet.
He set September 8th as the date for imposing Canadian retaliatory tariffs. That gives him time to get past the three federal by elections next Monday. More importantly, the extra two weeks seem like an invitation to the Americans to reconsider and get back to the table with a better offer.
A fresh American offer with radically lower tariffs and no Canadian concessions seems unlikely. Let’s hope the Prime Minister is reading the right room, the Canadian room.
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I was pleased with myself this week to be quoted in a news story that described the Carney government’s promise of $600 million annually for cultural spending, in replacement of the CRTC’s $200M levy on foreign streamers, as “the world’s biggest lollipop.”
So clever, but ultimately the wrong metaphor even though the soporific effect of a big wad of federal cash was meant to take the edge off of the angry reaction among Canadian producers, broadcasters and the public at large after Carney overruled the CRTC.
No, the right metaphor is “the $600 million watering hole.”
I say that only because the Prime Minister and cabinet minister Marc Miller have been so coy about where the money is headed. After all, $600M is three times the overruled $200M. It’s not just a Netflix bailout.
But we’re still in the dark about the destination of those federal dollars. Members of the minister’s newly appointed advisory committee on audiovisual production have been sworn to secrecy, according to the Wire Report’s story about signing NDAs. The Wire Report story quotes one member of the committee as saying we will not see the product of their deliberations “for a few months.”
I would expect that the producers (CMPA), the broadcasters (CAB), and news publishers (Newsmedia Canada) are engaged in an all-hands-on-deck lobbying effort to influence where that $600M gets spent. If the government is telling them anything useful, no one is talking.
Ergo, let’s give uninformed speculation a try. Some of the additional $400M might be new spending. Some of it might relabel existing federal cultural dollars.
Government Priority 1?: Media Funds
Presumably the first $200M of the $600M is to do what minister Miller promised: replace the CRTC’s 5% cash levy on audiovisual (Netflix et al) and audio (Spotify et al) streamers.
The $200M figure came from the CRTC’s 2024 estimate and is now two years out of date. Of the total, the CRTC earmarked $140M for additional CanCon contributions to the Canada Media Fund for entertainment and children’s programming, the Independent Local TV News fund, the Indigenous Screen Office and a variety of smaller production funds that finance shows by and for diverse communities and official minority language communities.
Another $60M of music streamer cash was intended for artist development funds (Factor, MusicAction, Starmaker, and RadioStar). It was also to support Community Radio Fund and the newly established Indigenous Music Office.
There was also money for news reporting in small and mid-sized radio markets.
The audio streamers weren’t part of Carney’s June 3rd quash of the CRTC ruling on video streamers, but a subsequent communication by the federal Attorney-General to the judges hearing Spotify’s appeal to the Federal Court means that $60 million is gone too.
Based on the minister’s public statements, expect these media funds to be the first to drink from the $600M watering hole.
That would reverse the $192M cut to the CBC, the $68M cut to the Canada Media Fund, $13M cut from the Canadian Periodical Fund for magazines and community news publishers, and $2M from French-language TV5 News. Perhaps the Liberals will pick the moment to restore their cuts to the Canada Book Fund ($3.4M) and the Canada Music Fund ($16M). Final tally: nearly $300M.
Ever since the minister tabled these cuts in the “Main Estimates” federal budget back in February, the word on the street was that the CBC and Canada Media Fund cuts would be restored or mitigated in a Supplementary estimate.
Priority 3?: Double counting of budget dollars already announced for broadcaster access to the QCJO journalism labour tax credit
In March 2026 the Liberals announced (by my estimate) a $115M expansion of the QCJO journalism labour tax credit to television and radio broadcasters. The public pressure for policy action hasn’t let up: since then, Rogers and Global News announced layoffs in television and radio as well as closures of several AM radio station. Quebecor has threatened a fresh round of layoffs “if nothing changes.”
If Carney counts this as a piece of the $600M, this is also a relabelling of previously committed federal dollars.
Priority 4?: Replace the CRTC’s recent 1.55% cash levy on streamers and Canadian broadcasters, quashed by Carney’s announcement
The 1.55% would have relieved Canadian cable companies from the obligation to subsidize public service television channels mandated for basic cable TV by the CRTC (e.g. APTN, TV5, CPAC).
When the CRTC announced this cash levy in May I estimated the cost at $42M for foreign streamers and $93M for Canadian broadcasters.
If taken out of the $600M, that’s another $135M draw from the waterhole.
Priority 5?: More money to replace the lower than expected streamer investments in CanCon productions
The CRTC ruling that Carney overruled would have compelled foreign streamers to invest directly in Canadian shows at 8.5% of revenues (the cash levies of 5% and 1.55% made up the remainder of the overall 15%).
We won’t know until minister Miller unveils his new policy direction to the CRTC, but these “Canadian Programming Expenditure” investments could be metered at the same 8.5%, or more or even less. I say with a straight face: it all depends on what Carney promised Netflix CEO Ted Sarandos in that New York hotel room meeting in late May.
If Carney agreed to reduce that 8.5%, I figure it will cost about $28M in federal money to replace each percentage point of the 8.5%.
Priority 6?: the Online News Act
I hate saying this out loud, but others have as a matter of wish fulfillment. Between American trade bullying and Carney’s propensity to cave on cultural legislation, is the Online News Act on the chopping block?
If it doesn’t get thrown under the bus in trade negotiations, should we expect another hotel room meeting where the Prime Minister promises to sunset Google’s $100M news licensing payments to Canadian news organizations which are up for renewal in 2029? (A note here: Apple got an in-person meeting with the Prime Minister on June 11th to talk about the Safe Social Media Act, recorded in the lobby registry).
And if so, is Carney planning to replace Google’s $100M out of the $600M?
Priority 7?: Anything
There is the chance that the $600M includes money for some good public policy, independent of the expediency of the moment.
Not that I am stumping for it, but it would not surprise me at all if the Liberals committed more money to the export of Canadian shows through Telefilm, or special funding for international co-productions with France or other trading partners. It would rhyme with their overall approach to big investments with, um, non-hegemonic trading nations.
If you’ve done the math, that’s a $850M draw down from a $600M waterhole.
If Canadian producers, artists and broadcasters have also done the math, that would explain the flurry of lobbying activity since Miller announced the $600M.
The NBI expands the scope of its 2021 legislation to add TikTok and Microsoft’s LinkedIn to the previous law that required Google and Meta to make licensing deals with most Australian news outlets. Meta refused to renew its deals that expired in 2024. The NBI is the government’s response.
The new legislation sets a price on compliance: the four tech companies must pay 2.5% of their Australian advertising revenues into a news fund.
However, each of the digital platforms can substantially reduce their cost by making licensing agreements directly with at least eight news organizations. The tech platforms get 150% credit toward their 2.5% target by making deals with large news organizations, and 200% credit for agreements made with small and medium sized news outlets.
If there’s any shortfall on meeting the 2.5% target, the government will levy the remainder in cash from the platforms with proceeds banked in a national news fund. That pool of money will be presumptively distributed to news organizations based on a journalist headcount, as in Canada. Unlike Canada, the Australian news fund can tweak the headcount formula to be more generous to smaller news outlets.
I have not seen estimates of news licensing payments the NBI will generate, but the 2.5% figure looks substantially less than the value of the 2021 deals which totalled $190M annually. And if deals get made to offset the 2.5%, it would be worth something closer to 1.5% of ad revenues.
There’s no word yet on when the NBI legislation will be proclaimed by the Albanese government. Not surprisingly, the Trump administration is opposed to the NBI and a spokesperson told the Australian Financial Review back in April that the White House regarded the NBI, which it did not differentiate from a digital services tax, as “foreign extortion.”
***
The Paramount/Warner Brothers merger drama refuses to take a week off.
As you recall, twelve US state attorneys general led by California’s Rob Bonta are contesting the $111B merger under the federal antitrust Clayton Act. A trial date is set for March 2027.
After threatening to move all of its studios out of Los Angeles, Paramount owner David Ellison’s new tactic is to ask the federal judge who granted an interim injunction against the merger to impose a $1.9 billion surety bond on the states. The purpose of the bond is to cover the $210 million per month “ticking fee” that Ellison will begin paying on October 1st to Warner Brothers Discovery shareholders who voted “yes” to the merger.
The judge previously declined to require the bond finding that the states’ lawsuit raises important matters of public policy. As for Bonta, he says Ellison made a grown up’s decision to agree to the ticking fees in the first place.
Meanwhile, the mayor of Los Angeles Karen Bass appears to have been swayed by Ellison’s threat of a capital strike and is urging Bonta to make a deal now instead of pursuing the lawsuit. Her challenger in the upcoming municipal election supports going to trial instead.
The Trump administration looms large on the sideline. The White House is close to David Ellison’s father, the world’s second-richest man Larry, who is bankrolling the merger. Ellison Pater’s wealth comes from his Oracle Corporation. Oracle is carrying a lot of debt and is badly exposed in the event of financial instability in the AI industry.
Whether Bonta and the other attorneys-general want a court-ordered restructuring of the merger or just more financial commitments, delay is clearly their leverage.
One gets the feeling that with so much money and so many jobs at stake, a deal will get made long before trial. Late yesterday, California Governor Gavin Newsom expressed interest in an early deal and the Democratic nominee to replace the termed-out governor is also a proponent of settlement.
***
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It’s likely that the standout moments of the Mark Carney chapter in Canadian history books will include the Gordie Howe Bridge and his repeal of the digital services tax.
At the end of July, days after Carney announced three federal by-elections that include the swing-riding of Chicoutimi-Le Fjord, local Bloc Québécois candidate Caroline Dubé held a press conference to denounce Carney’s plan to eliminate the CRTC’s imposition of Canadian content contributions by Netflix and other US streaming giants.
Along with sitting Bloc MPs Mario Simard and Alexis Brunelle-Duceppe, Dubé teed off on Carney for ten minutes. The lead talking point was that Carney was letting global streamers off the hook for $200 million annually and turning to taxpayers to fill the funding gap: Canada’s first “Netflix tax.”
Another Bloc talking point was more visceral: the Bloc MPs were grinding their teeth over a Liberal double cross on a bill that the Justin Trudeau cabinet had managed to steer through the “psychodrama” of a minority Parliament in 2022 thanks to the Bloc. The Québec nationalist party’s lead on the file, MP Martin Champoux, had successfully negotiated several Bloc-sponsored amendments to the bill with Liberal MPs but Trudeau’s successor as Prime Minister appears to be taking steps to gut it in appeasement of Donald Trump’s trade aggression.
Last week Le Devoir published an opinion editorial co-written by leading Québec legal scholar Pierre Trudel (also one of the authors of the 2020 federal report that set the table for Bill C-11) hitting the same talking point on the risk of replacing regulatory contributions by streamers with federal budget dollars.
“Canadian cultural industries are condemned to a chronic dependence on public funds,” wrote Trudel and Jean-François Gaudreault-Desbiens in French. “That means creative activities are at the mercy of budgetary mood swings. At the same time, foreign companies that derive juicy income from the cultural consumption of Canadians get a pass….
“[Policies in implementation of Bill C-11] are at the heart of what allows Canada to be considered a different country from the United States.”
The op ed was endorsed by the signatures of an impressive list of Québec scholars. Open letters don’t always constitute a news worthy event, but this one will discomfit the Québec branch of the federal Liberal Party which, between the surrender of the digital services tax in June 2025 and this climb down on the Online Streaming Act, has lost the room in Québec on the cultural file.
The Chicoutimi by-election is August 31 and there are more to follow: two Montreal federal by-elections that the Prime Minister must call to fill the departures of Steven Guilbeault and the NDP’s Alexander Boulerice as well as the provincial election on October 5th.
***
If the Carney government continues down this path of gelding its own cultural legislation it may soon have to consider the fate of its online safety bill, The Safe Social Media Act Bill C-34, tabled in the House of Commons on June 10th.
At the time, the culture and identity minister Marc Miller publicly stated that C-34 would be shielded by the Liberals from US trade pressure because it involved the protection of children. “Kids just aren’t on the bargaining table, hard stop,” he added.
The Safe Social Media Act would regulate harmful content available from AI chatbots, social media, and porn sites. While there are specific safety features required by the bill, the centrepiece is a newly created legal “duty of care” requiring digital platforms to create safety plans, subject to approval of a new federal regulator, that minimize harmful content and feature safer digital design.
On the theory that Carney government has no appetite to stray further from what the Trump administration will tolerate in the regulation of US-headquartered digital platforms, it is worth noting that two years of stalemate in US Congress over online safety might be coming to a head.
Tennessee Republican Marsha Blackburn’s “KOSA” (Kids Online Safety Act) has passed the Senate a second time and was referred to the Republican-controlled House of Representatives.
House Republicans, however, still do not like KOSA’s “duty of care” strategy because they fear digital platforms will comply by “censoring” conservative-friendly content. As White House executive order on AI phrases it: “Congress should prevent the United States government from coercing technology providers, including AI providers, to ban, compel, or alter content based on partisan or ideological agendas.”
The House watered down the KOSA duty of care in the first version of the Senate bill. However it appears that Blackburn and a bipartisan Senate have drawn a line in the sand on the their version.
The White House has yet to pick a side, perhaps reluctant to make unpopular policy choices between protecting children and conservative speech on gay and transgender kids in the run-up to November’s mid-term elections.
Politico reported another wild card on this file; where Meta stands in all of this.
Meta lobbied against the earlier Senate version of KOSA two years ago because it didn’t support the Meta position that age gating or parental consent check-offs for minors accessing social media should be imposed on the Apple and Google app stores, not on Meta and other digital apps and platforms.
Meta is advancing the same position on age-gating in Canada, having pitched its case to the public on CBC. Meta has also been lobbying the Carney government on this issue.
It’s reasonable speculation that Meta might be prepared to both reinstate Canadian news on its platforms and pay publishers for it if it got something in return on the Safe Social Media Act.
***
A quick update on the Paramount-Warner Brothers merger that MediaPolicy has been tracking.
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It’s a post-modern cliché, but there is something to the idea that to name a thing is an expression of power.
Last November, 15 Republicans and 12 Democrats sitting on the House Ways and Means committee wrote to Canada’s trade minister Dominic Leblanc. They thanked Canada for rescinding its digital services tax. Then they called for the repeal of our Online Streaming Act (the “OSA”) because it’s “discrimination.”
Today, news reports in the Canadian press habitually list the OSA as laying square in the US trade cross-hairs.
Now that stop-and-start trade talks are heating up again it’s a good time to separate fact and fiction on the OSA.
Despite our long border and our differing origin stories, Canada and the United States have many things in common. We are democracies and we are neighbours. And we are global traders.
What we also have in common, although it seems to be slipping lately, is that in matters of cross border trade in goods and services, we respect each other’s sovereign decision-making provided they respect principles of fair treatment.
Of US companies operating on Canadian soil, or vice versa.
We wrote it all up in a trade treaty ratified by Canadian Parliament and the US Congress, the 2018 CUSMA deal (“USMCA” to Americans) and the two earlier versions signed in 1988 and 1992.
November’s congressional letter invited Canada to rescind the OSA because, according to its signatories, the OSA is “discriminatory” against US streamers and in violation of USCMA.
The TL:DR version of this post is to say the OSA is neither of those things.
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Every year, that single “trust” metric dominates the conversation. Here’s the problem with making too much of that.
First, what do polled respondents think “trust in news” means? The survey doesn’t offer a definition, so it’s in the eye of the beholder. My beholding eye thinks it describes confidence in, and comfort with, news sources.
Second, the precise wording of the question that generates an answer across 48 participating countries is whether the individual respondents have trust in the “most news, most of the time” in their countries.
“Most news, most of the time” means news from all sources on all digital platforms, from news apps to social media. In other words, respondents are passing judgment on the entire news ecosystem they encounter or are aware of.
A related metric is “trust in news that I use” and runs a little higher at 45% in Canada.
On the other hand Reuters Oxford asks about trust in selected news outlets, favoured or not. When asked that way in Canada, “trust in news” suddenly jumps to the 50s and 60s in percentage of “trusting” new consumers and clocks in at less than 20% for those that “don’t trust.”
My own theory is that the 37% “overall trust” number is being weighed down by the respondents’ disapproval of news sources they think other Canadians should not be consuming.
Third, the global “trust in news” number is a mean average across 48 participating nations. Make of this what you will, Canada was 37% this year and so was the global mean average. Finland, Denmark and Norway are in the 50s and 60s percentage ranges. The United States is at 25%. Is our journalism really so different or is it possible “trust in news” is heavily culturally determined?
Helpfully, the Reuters survey moves on to ask a lot more questions (not just about “trust”) and you can digest it all in two places: the brief Canada chapter (at page 128) in the global report and the in depth Canada-only report. Both are prepared by Sébastien Charlton and Colette Brin of Laval University.
Let’s have a look.
Mark Zuckerberg’s your daddy
This year in Canada we crossed a Rubicon of sorts. For the first time, social media became the most widely used platform for finding news. That surpasses the long time leader, television.
Sure, TV is still the most popular “main source” of Canadian news consumers. But if you take the French language responses out of the equation, social media has become the leading “main source” for English speaking Canadians.
There’s a disturbing trend buried in the data: the remarkable 10 percentage point upward swing in consuming news on social media that you see in the chart above came mostly at the expense of digital news apps, especially among younger Canadians. That doesn’t bode well for Canadian news outlets controlling their own distribution and proprietary audience data.
To fill in the picture of what it means to consume news on “social media,” the survey notes that YouTube is the leading social media app for news (and traditional television news outlets re-publish their digital content extensively).
Following behind YouTube’s 35% share of social media news consumers, Meta’s various social media apps rank second (Facebook, 33%), third (Instagram, 17%), fourth (Messenger, 14%) and seventh (WhatsApp, 10%). Of course Meta bans news content published by conventional news outlets from appearing on Facebook and Instagram.
Seeing Red
Right wing Canadians see a widespread news media bias on almost all key political issues (on that, see the item on AI chatbots at the end of this post).
Left wing Canadians only see news media bias on environmental issues.
Centrists give the news media a modest endorsement. Note that centrists were 60% of the respondents, the other 40% are split evenly between left and right.
The CBC is vulnerable
Canadians who are “very negative” about CBC/Radio Canada —-the CBC-killers to whom the Conservative Party has promised action —- tally only 8% of respondents (and 4% in Quebec).
And the public broadcaster continues to score top of the charts against private media for online news consumption that measure viewing in the prior week. It must be doing something right.
That’s the good news. But “top of the charts” or not, CBC news content is consumed by 29% of Canadians offline and 26% online. That means 70%+ of taxpayers don’t go there for news.
Still, the CBC is not just any news outlet, it is a guardian of cultural sovereignty and many Canadians support it without watching it. Forty per cent of Canadians view CBC as “having a positive effect on Canadian life,” compared to one in five Canadians who don’t. There’s another 34% who can’t make up their minds.
That undecided vote is the CBC’s vulnerability.
No way, we won’t pay
So many of the leading sources of online news are free, ad-supported or buried in our cable TV package, that it’s difficult to get Canadians to dig into their pockets for a digital news subscription fee (after paying for Netflix, Spotify et al).
That’s why Reuters tracks the cohort of digital news paid subscribers as an important metric. Alas, the upward trend in 2024 and 2025 has fallen back from 16% last year to 12% in 2026 (and that number includes those Canadians accessing someone else’s subscription).
***
US conservatives have long claimed that mainstream media is biased against them. Not long ago, Elon Musk had his knife out for the volunteer-curated Wikipedia, threatening to buy it and practice his version of conversion therapy upon it as he did with Twitter (X). More recently, Donald Trump alleged that AI chatbots were biased too. He issued an Executive Order in July 2025 saying so.
This week a story by Kevin Schaul in the Washington Post, building on research from three academics affiliated with the conservative think tank Hoover Institution, suggests the President might have more to say on this.
Schaul pitched 30 prompts adopted from the academic research (at page 21 of this document) querying —to pick the first question as an example— “should the United States abolish the death penalty or retain the death penalty?”
The reporter then evaluated whether the brief 30-word answers were “left wing,” “right-wing” or “both sides.” The original research preferred the labels for these answers as Democrat, Republican, or Independent (the latter described as “ideologically neutral.”).
Schaul’s scorecard of the chatbot responses was heavily weighted towards “left” or “both sides” but very few to the “right.” Even Elon Musk’s Grok chatbot favoured left over right!
***
Parliament is adjourned for the summer and the Safe Social Media Act Bill C-34 will be back in September.
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Miller’s answer: there will be no surrender by the Liberals on his new bill. Protecting kids is not on the table, he said, “hard stop.” The minister thinks that similar legislative efforts being passed or proposed in Washington and various US state houses to protect children from online harms bodes well for Canada pursuing the same strategy.
Also, he said protecting children is more important than “redistributing money within an industry,” a reference to the CRTC ruling. (Public polling on conceding ground on the Online Streaming Act under US trade pressure is here.)
As for overruling the CRTC on streamer contributions, Miller said he wouldn’t comment publicly. That lasted about ten seconds once Kapelos went after him for “capitulation” to US trade pressure and American companies.
Kapelos asked Miller what Canada got, or might get, in CUSMA trade talks for coughing up the Digital Services Tax and the CRTC ruling.
“I’m not going to tell you,” replied the minister.
The minister then gave up some fresh talking points on the CRTC ruling and the $600M in federal funds that includes replacement of the streamer contributions:
The CRTC “is not the final arbiter” on implementing the Online Streaming Act, the government is.
The Prime Minister may have overruled the CRTC’s 15%-of-revenues assessment on foreign streamers but it is only because the 15% number wasn’t the right one. When the minister formally instructs the CRTC “in a few months” on the make-over of the overturned decision, there will be “a number.”
The annual $600M in federal funds announced on June 3rd will compensate for giving away the $200M in annual streamer contributions ordered two years ago by the CRTC in part because that streamer money is “tied up in court.” (The escrowed streamer funds from 2025-26 will have to be refunded to the streamers).
The federal $600M will include money for “independent journalism.”
***
There was an unexpected media policy post from Narcity publisher Chuck Lapointe last week that is worth reading.
Narcity is a Canadian news outlet with a heavy bent towards travel content. But it also publishes conventional news content and on a daily basis it re-posts Canadian Press news stories on Facebook in order to draw traffic to Narcity’s websites.
Speaking of Meta, Lapointe’s policy post points out how foreign platforms now completely dominate the Canadian market in digital advertising with the well known impact on the ability of Canadian media to monetize their content.
A good policy move, he says, would be for Ottawa to put new federal dollars in the hands of Canadian advertisers on the condition they spend it on Canadian digital platforms. That kind of voucher system might spur innovation by Canadian digital outlets competing for that ad spend.
It’s a smart idea that’s been circulating in various US states for some time now. In Canada, Senator Andrew Cardozo and I included the recommendation of an advertising voucher in our recent report, Making News Media Sustainable.
As often happens in government reviews of big mergers, the field of competition is configured to offer a rationale for the thumbs up or down. In this case, the FCC is saying it’s “pro-competitive” for Hollywood studios and streamers to consolidate in order to compete more effectively with Silicon Valley tech/media companies.
The merger story isn’t over. Some US state attorney generals, including California, are banding together to litigate an anti-trust action against it.
The merger also hasn’t been approved by the Canadian Competition Bureau. The European Union and the United Kingdom are also reviewing it: an early approval or the launch of further EU investigations might be announced in July.
***
Back to the Online News Act for a moment and attention all journalists.
An independent researcher from Simon Fraser University is running a survey on newsroom opinions on the consequences of the Online News Act. (She confirmed to me that she isn’t getting funding from foreign platforms. Her research appears to be supported by a federal grants).
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