The CBC has a hip two-minute cut-for-social video explainer narrated by the tattoo-embossed Nick Parker.
And for another take, here’s Paul Wells interviewing Canadian tax expert Allison Christians.
President Trump has promised to re-announce tariffs this week. Carry on Canada.
***
Two months ago when Donald Trump blurted out his desire to tariff US movies filmed abroad he got a tepid response from the supposed beneficiaries, Hollywood studios and the Big Tech streamers.
That’s because the studios and streamers make so many movies in Canada, at a competitive and government-subsidized cost, with world class quality.
What Hollywood really wanted was production subsidies from the US federal government, but so far that has not happened.
Now California is stepping up to the plate. Governor Gavin Newsom is prepared to double existing state subsidies to the tune of $750 million, quite a slice of the pie in what is otherwise a major austerity budget for the state.
***
The Canadian Press has reported that Justice Minister Sean Fraser is having a close look at the federal Liberals’ online harms legislation before re-tabling it.
Bill C-63 died on the order table when Mark Carney called a federal election in March. The core of the Online Harms Bill was to require social media platforms to establish content safety codes, legislation that polling suggests is a winner.
The add-ons to the bill were more controversial. The opportunity for private citizens to file anti-hate complaints against each other under federal human rights legislation, abolished by Parliament in 2012, is to be revived.
And the anti-hate provisions in the Criminal Code are to be strengthened with more severe punishments. MediaPolicy offered some perspective on that, here and here.
Prior to the election, then Justice Minister Arif Virani reluctantly split the controversial from the core elements of the bill into separate legislation. Neither bill was taken up by Parliamentary committees in the months leading up to the election call.
The CP story quotes the new Minister as wanting to make his own “fresh consideration of the path forward.”
There are two 15-minute weekend reads on media that I can recommend.
In his personal blog “Fagstein,” the Montreal Gazette’s Steve Faguy has posted a short history of the CRTC’s decades long struggle to keep local television news solvent.
He’s done a great job. I know how hard it was as I tried to do the same in a shorter space in chapter six of my book on the Online Streaming Act. Faguy’s post is the learning resource that has been missing.
The other read is a feature story from the Globe and Mail’s Josh O’Kane. He’s updated his whodunnit reporting on the cyber-theft of $10 million from FACTOR, the music funding organization that distributes dollars contributed by government, radio stations and (subject to a court appeal) music streaming companies to Canadian musicians.
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Mark Carney’s shock repeal of Canada’s digital services tax on the eve of Canada Day was greeted by a gloating fan-dance by President Trump’s press secretary who claimed that “Carney and Canada caved to Donald Trump and the United States of America.”
In a brief news interview the Prime Minister suggested that the corporate tax measure, designed to capture offshoring of Canadian revenues by US tech companies, was never going to be in the final trade deal that he is working on with Donald Trump. MediaPolicy expressed its view on all of this in Monday’s post.
This might end up as a historic moment of humiliation, pending future events.
The backlash against Carney has come from all sides. He may be fortunate that Parliament is not in session and his minority government doesn’t have to face the music until the Fall. No doubt, that was his calculation.
Today the Toronto Star published an open letter signed by Canadians for Digital Sovereignty who describe themselves as “a group of patriotic Canadians and civil society organizations who care deeply about the future of Canada.” The letter expresses the concern that backing off the digital services tax will embolden Trump to press other trade demands, in particular where Big Tech and Hollywood are involved.
Carney might regard some coalition members as the usual suspects in public policy matters affecting digital and cultural sovereignty, but the inclusion of others suggest a broader opposition that ought to disquiet the Prime Minister.
The members of the coalition hail from English speaking Canada. From what I have seen on social media, their French-speaking counterparts in Québec are angered by Carney’s DST climb-down and their displeasure will be expressed.
Here’s the Open Letter:
Open Letter: Canada cannot afford to concede more to foreign tech giants
Dear Prime Minister Carney and Minister Champagne,
We are a group of patriotic Canadians and civil society organizations who care deeply about the future of Canada. We are disappointed by the government’s decision yesterday to both halt collection of the Digital Services Tax and eventually repeal the Digital Services Tax Act. As a result, on Canada Day, foreign tech giants will enjoy an immediate $2.5 billion windfall and a $7.2 billion tax break over the next 5 years. While we recognize the difficult choices facing the government, we feel that we cannot ‘build Canada strong’ while surrendering ever more of our digital sovereignty and security.
We urge the Government of Canada to:
(i) Find ways to use foreign tech giants’ massive untaxed profits to fund homegrown alternatives, despite proposing that Parliament repeal the Digital Services Tax Act
(ii) Strengthen Canada’s digital sovereignty in trade negotiations and in undertaking a reset of Canada’s forward digital policy agenda, and
(iii) Make no further concessions to foreign tech giants, including on legislation passed by Parliament (the Online StreamingAct, Online News Act) or in addressing urgent matters including combatting online harms, regulating artificial intelligence, ensuring the integrity of the information environment (including for health information), protecting privacy, among other measures to rein in foreign tech giants’ negative impacts on our economy and society.
Foreign tech giants, especially U.S.-based companies, have made hundreds of billions of dollars in Canada in recent decades and yet have not paid their fair share in taxes. Many enjoy tax breaks on digital advertising paid for by Canadians thanks to a loophole in the Income Tax Act. We are one of the largest digital markets in the world, with a highly online population, skilled workers, and innovative companies. Yet in 2023 alone, U.S. tech giants made $20.7 billion in Canada from distributing online content. U.S. tech giants are crushing domestic competition, dominating our markets and imposing a range of externalities on Canadians. They profit from the amplification of online harms, including the spread of false and manipulated information, hurting the mental and physical health of children along with all Canadians. They are eroding the economic basis for the professional news media and feeding the toxification of our increasingly digital public sphere upon which our democracy depends.
The Digital Services Tax is a modest yet much-needed measure that will ensure foreign tech giants are more fairly taxed and held accountable for their enormous power over Canada’s society and economy. We are disturbed to see the alignment of CEOs of Alphabet, Meta, Apple, Amazon and X Corp. with the current U.S. administration’s agenda, which threatens Canada’s political and economic independence.
Rather than repealing the DST, we urge you to consider how foreign tech giants’ massive unfair profits in Canada could be taxed to invest in Canada’s digital sovereignty, building homegrown alternatives to U.S. monopolies. At many times in our history, Canada has invested to build communications infrastructure in the national interest. Canadian companies can help build platforms, networks, and tools that reflect Canadian values, strengthen our cultural and information ecosystems, and nourish our diversity as a country with two official languages and three founding peoples – Indigenous, French, and English – so that Canadians in communities across our far-flung country can better serve their own needs to communicate and connect.
We note that the U.K. did not make concessions to their digital services tax to get a trade deal with the US.
We stand ready to help our government, to inform and rally Canadians to help build our digital sovereignty and a better digital society.
Regards,
Organizational signatories
ACTRA National Amanda Todd Legacy Society Broadbent Institute Canadian Anti-Monopoly Project Canadian Centre for Policy Alternatives Canadian Centre for Child Protection Canadian Federation of Nurses Unions Canadian Medical Association Canadian Media Guild Canadians for Tax Fairness Centre for Media, Technology and Democracy Children’s Healthcare Canada Community Radio Fund of Canada The Dais Documentary Organization of Canada Friends of Canadian Media Goodbot Society Inspiring Healthy Futures Open Media Pediatric Chairs of Canada Reset Tech Unifor National & Local 87-M
Individual signatories Mike Ananny, former advisor to Canadian Heritage on the future of CBC/Radio-Canada, and Associate Professor of Communication and Journalism, University of Southern California
The Right Honourable Adrienne Clarkson, CC
Linda McQuaig, author and journalist
Taylor Owen, Director of the Centre for Media, Technology and Democracy and Associate Professor at McGill University
John Ralston Saul, CC
Leslie Regan Shade, Professor Emerita, Faculty of Information, University of Toronto
Paul Valée, CEO of Tehama.io
Dwayne Winseck, Director Global Media and Internet Concentration Project, and Professor School of Journalism and Communication, Carleton University
***
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After years of calling the shots as a business CEO and bank governor, the Prime Minister is discovering how tough it is to play the weaker hand when negotiating —-well, trying to negotiate—- with a bully like the United States.
Trump not only wanted the DST to be cancelled, he demanded on Sunday morning it be repealed as a condition of further negotiations over tariffs, trade and continental security. On Sunday evening Canada folded.
Carney cancelled the DST literally hours before the Silicon Valley titans were obliged to send us about a couple of billion dollars in corporate tax remittances, after years of Canada delaying the tax in the hope of coming up with an alternative measure to address the problem of US tech giants reducing their global tax bill by offshoring revenues earned in Canada and countless other jurisdictions. A deal with former President Joe Biden fell through because US Congress would not ratify it.
The rapid chain of events on Sunday had a whiff of Kabuki theatre: it’s plausible that weeks ago Carney made the decision to clear ballast from his trade agenda, much as he did with a carbon tax he once endorsed, but he needed Trump’s threat of walking away from the trade talks to do so. Whether Carney and Canada got anything from Trump in exchange for this unilateral concession we may never know.
It’s an understatement to say there is a disturbing pattern taking hold. Canada spent $1.3 billion on border security to rebuff Trump’s first round of trade tariffs triggered on the phony pretext of fentanyl smuggling.
We enacted and then suspended most of our retaliatory tariffs in hopes of expedited trade negotiations.
We joined hands with NATO allies to click our heels at Trump’s demand that NATO countries more than double their defence spending to 5% of GDP.
And as a ten out of ten on the cringe scale, who can forget Ontario Premier Doug Ford’s bumbling bluff to cut electrical power exports to the United States.
Carney is gambling that Trump won’t see the DST climb-down as weakness and be emboldened. If Canada was the European Union of 400 million souls, an ocean away from the US, the Prime Minister might have chosen a different strategy.
What’s the right way for Carney to play this in the next few weeks?
I spent my trade union career negotiating against powerful companies, usually playing the weaker hand unless the rank and file were angry enough, for a long enough period of time, to face down their employers. One of the key responsibilities of the negotiator is to figure out your own strength.
This is Carney’s challenge. How resilient are Canadians in our collective commitment to economic defence against the Trump onslaught? We get riled up by Trump’s “51st state” threats. But are we tough enough for a grinding trade war of attrition that lasts until Trump’s economy tanks and he has to face mid-term voters next year?
This is a question that the Prime Minister must ask himself every day. It is a question we must ask ourselves.
Our first test of bargaining solidarity is for our politicians, especially our provincial premiers. I suppose we could ask them to just shut up and let the winner of the federal election speak for Canada and certainly not head south to cut their own deal with the US President at Mar-a-Lago.
But voters expect their elected officials to speak up for their constituencies —-Alberta Premier Danielle Smith has every right to remind us that the oil patch is as important as the auto industry— or else they will no longer be elected officials. But there is a line to be drawn and respected.
The same test of solidarity can be expected of non-elected political agents. The chorus of domestic critics of the tax on Uber, Google, and the other digital titans has mischaracterized the tax as just another cynical cash-grab from Big Tech companies that are better left unregulated.
Canadian journalists have tried to correct that misimpression, reporting on the DST as a story of global tax policy. The story is that Canada was a relative latecomer to the international consensus among OECD nations that US Big Tech was offshoring revenues earned in other countries to tax havens like Ireland and that national digital taxes were the best way to combat it until the cheating stopped.
Most European Union nations have already implemented their digital services taxes. While the US President still has those levies in his trade crosshairs, any changes will come at the negotiating table where the EU can pursue a solution to the offshoring problem. In a recent announcement, US Treasury Secretary Scott Bessent said that the US was prepared to mirror OECD/G20 nations’ tax policies on a minimum corporate tax even though the US will not ratify a tax treaty on the matter.
The details of this recent understanding between the OECD and the US are still hazy.
The EU is keeping its DSTs, for now, because it has some things that Canada doesn’t. Like, the EU nations’ DSTs were already implemented and they had not delayed them out of good will as Canada did. Like the trade of EU nations is less exposed to the United States than Canada’s is. Like, the EU can fall back on an internal trading bloc of 400 million.
The EU will discover, as Canada is, that a solid front at the bargaining table is the only way to defend economic opportunity and political sovereignty against Trump’s trade war.
If it’s all over quickly because we can’t keep a grip on our internal solidarity, we will have lost the trade war. And losing the trade war could mean losing our country.
***
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If you’re Norway (1st of 180 surveyed nations) or China (178th) you aren’t going to sweat what Reporters Without Borders, a Paris-based NGO best known for public campaigns against the murder or imprisonment of journalists, has to say.
But in between, maybe liberal democracies that think highly of themselves are in for a humbling moment.
This year, Canada’s global ranking is 21st, down from 14th because its index score, spread across five categories of political, legal, economic, social and safety considerations, fell from 81.7 to 78.75 out of 100 points. The US is 57th, France is 25th and the United Kingdom is 20th.
In who’s opinion, you might ask: in each of 180 nations, Reporters Without Borders asks local news journalism experts and practitioners to respond to a series of standardized “press freedom” questions that plumb the depths of journalists’ ability to report on the news without interference.
According to the RWB website:
Press freedom is defined as the ability of journalists as individuals and collectives to select, produce, and disseminate news in the public interest independent of political, economic, legal, and social interference and in the absence of threats to their physical and mental safety.
The Canadian report does not moot the debate over Canadian media subsidies and regulation, to the contrary across 180 nations strong public service broadcasting tends to drive higher scores.
The Index is as much a monitor of a healthy Press as freedom from state power. Broader social, political and economic factors that support or attack a free press play an important role in the scoring.
That concern also appears in Reporters Without Borders election-related statement that called for better training of Canadian police in their treatment of journalists as the top public policy priority.
RWB’s other recommendations included protecting the CBC from defunding, a ban on police spyware aimed at journalists, and a rebuilding of Canada’s “broken” access to government information mechanisms (the new Prime Minister having shown some interest in the latter).
RWB also noted the existence of “a patchwork of [media subsidies] policies” that beg for “a comprehensive and consistent strategy that helps enable the media to innovate and find news models of sustainability.”
In next year’s report, we’ll likely see an impact on ratings from CTV’s firing of Rachel Gilmore as a guest election fact checker because of trolling by right-wing actors.
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This is my last post for a month thanks to our first real vacation since pre-pandemic times. It’s a bit of a science experiment: can four adults manage a two-year old while travelling? Should be possible.
I couldn’t leave without commenting on Donald Trump’s latest announcement of a 100% tariff on Hollywood’s movie production outside the U.S.
It will be a popular move in the US. Hollywood is making less audio visual content globally and in the United States owing to a number of factors, most noticeably budget cutbacks in response to the saturation of the subscription streaming business.
Canada is Hollywood’s biggest non-American supplier of movies and television shows: half of Canada’s $9.58 billion in annual production is for American shows and much of our Canadian content is widely exported to the American market for second runs. The employment hit could be substantial, as this screen capture from the CMPA’s Profile report reveals:
The obvious Canadian counter-tariff is a 100% surcharge on American-made shows exported to Canada. Those would hit Canadian broadcasters filling their schedules with American programming (Corus, TVA, CTV, Bell Crave, etc) but also Netflix and the other American streamers who sell to Canadian subscribers.
It’s not likely that Hollywood asked for the Trump tariff: the studios rely upon the high-quality, competitively priced production centres across Canada, but mostly Toronto and Vancouver.
The tariff disrupts their supply chains and their budgeting, not unlike the Trump tariffs hitting the auto industry.
A White House spokesperson walked back the President’s announcements within hours —-“no final decisions“— suggesting a WTF phone call from the Motion Picture Association.
Shortly afterwards, Trump’s “Hollywood ambassador” Jon Voight made a public statement suggesting that his recommendations to the President had been to boost tax incentives and subsidies for domestic production, negotiate international co-production treaties, and apply tariffs in some situations.
At the CRTC, the Motion Picture Association and the US streamers have put almost all of their strategic capital on securing a minimal commitment to offering Canadian content because the studios spend so much money making American movies in Canada.
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Of all the silver linings in Donald’s Trump’s aggression against Canada, I’ve been gratified to discover the renewed popular passion for Canadian culture.
The pinning-jelly-against-the-wall quest for a distillation of Canada’s national essence always interests me: I’ve pondered it myself in a previous post and celebrated the thoughts of others on the subject.
Unfortunately, what Marche offered us last week was a fact-free rant against the CBC.
His starting point is a much celebrated allegation: that Justin Trudeau is a proud “post-nationalist” who does not value Canada’s rich history because it is marred by the dispossession of Indigenous peoples and wrongs committed against minorities. Says Marche, our “cultural industries” eagerly signed on to Trudeau’s project of denigrating “so-called Canada” and “the self-critique quickly narrowed into a negligible, impotent stream of identity politics to the exclusion of virtually any other perspective.”
Having named all “cultural industries” in the indictment (including his own, the book publishing industry), Marche’s chief culprit is the CBC. Just to give you a flavour:
The most egregious, and most important, case is the CBC. The CBC has spent a decade turning itself into a big national scold. Literally, their ad campaign from 2023 featured the slogan: “It’s not how Canadian you are. It’s who you are in Canada.” That’s how they chose to promote themselves – a sneer at anyone who might think of themselves as a patriot. I am not sure, at this moment, whether the CBC even likes Canada. You certainly can’t tell by listening to them.
There are no facts or examples provided for this grave condemnation of the public broadcaster as “a big national scold” that “sneers” at “patriots.”
I watch, listen and read the CBC every day: I’ve never witnessed scolding, sneering or anything of the kind. What’s the CBC guilty of? Broadcasting North of North? Or Sort Of?
Once rolling, Marche doesn’t stop:
The Conservatives have, if anything, underestimated the problem. I say this as a small-l liberal: When the head of the CBC cannot name a single Conservative voice on their platform, when they are opposed, as such, to the political views of somewhere around half the country, they are failing in their mandate to represent the country. It is as simple as that.
A small point, Marche’s link is to a podcast that doesn’t verify his statement: former CEO Catherine Tait declined Paul Wells’ invitation to identify “the most interesting conservative commentators on CBC,” she didn’t say she didn’t know any.
A bigger point is whether the CBC invites conservative commentators onto its shows. On that point, I seem to recall Andrew (“defund the CBC”) Coyne making some rather good conservative arguments on CBC’s flagship At Issue panel for the last decade or so. From my own observation, the CBC regularly seeks out conservative voices on its television news panels, although I suspect it’s difficult when there appears to be a Conservative boycott on the public broadcaster.
Marche’s zippy one-liners continue: the CBC engages in a “ritualized fetish for self-purification”; “its politics seems to derive from the sociology department at York University,” and “the CBC is a force of [information] pollution, they are an active vector of polarization.”
Anyway, you get the gist. By the end of the tirade, Marche tables an unobjectionable list of principles underlying a strong Canadian cultural nationalism. Count me in.
But in the end, Mr.Marche is not a satisfied CBC customer and I am. What about everyone else?
Here’s some feedback from the Reuters-Oxford study of the Canadian news market, the first graph covering radio and television and the second chart covering online news:
These aren’t the numbers you hear about when critics are taking a run at the CBC.
When they do, one of those cherry-picked numbers is the “CBC’s two per cent market share.”
If you look it up, that’s a reference to the CBC National News channel’s share of the cable audience. It may surprise you, but two per cent for a single channel in the 500-cable channel universe isn’t bad. CBCNN’s cost is covered by cable subscriptions and advertising, basically Pierre Poilievre’s formula for a defunded CBC.
The other sore thumb is the CBC’s five per cent share of prime-time evening television ratings. It’s competitors CTV and Global no longer disclose their ratings, but they are believed to be higher. That’s not surprising: the evening prime time is when CTV and Global carry popular US programming, while CBC does not.
Here’s a chart from CRTC data (unfortunately a year behind) you might find interesting.
Since 2015 (Table 30), the CBC has slipped in the relevant television ratings (network stations) against the private broadcasters.
Since 2009 (Table 32), the CBC’s production spending on Canadian content slipped a lot, while the CanCon spending of the private networks and specialty channels climbed. The explanation is that the CBC’s Parliamentary funding is stagnant and, in response to new viewing habits, it has shifted its budget from television to online.
This is neither an apology for those television ratings nor a scolding for those that ignore the CBC’s strong ratings on radio and online.
“Not bad” or “good enough” is not the bar, not for the public broadcaster. The CBC should be appreciated and reasonably well loved across the country and if it’s perceived as projecting itself as too urban, too central Canadian, or too progressive that’s a problem it needs to address like it’s life depends upon it.
Which it probably does.
***
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The stock markets roiled by Donald Trump’s tariff yo-yo vaporized a lot of personal savings (ouch), but especially if you held Big Tech stock. Or owned the company.
Alas, shed a tear for Zuckerberg, Bezos, Musk and the bros. It must be a weird space to be in: grovelling before Trump in the hopes of an unimpeded path to worldwide AI “dominance,” losing billions in share value on any given day of the week and fending off federal anti-trust lawsuits.
The US Federal Trade Commission’s anti-trust suit against Zuckerberg’s Meta starts at the trial level on Monday and is expected to go day to day through July. The government is challenging the Facebook-WhatsApp-Instagram business as an anti-competitive monopoly in “personal social networking services.”
Matt Stoller will be covering the trial in his Big Tech on Trial Substack.
As the politics play out, the FTC’s litigation team has its work cut out for it on showing monopoly power.
To win its case, the FTC must prove that Meta has a monopoly in a relevant market, and that its acquisitions of Instagram and WhatsApp helped Meta maintain that monopoly through something other than competition on the merits.
The FTC can show monopoly power with direct evidence, like the ability to profitably raise prices or diminish quality. But because Meta does not charge consumers money for its services, it’s difficult to show the classic direct evidence of a price increase. Even so, the FTC has introduced evidence that Meta can engage in price discrimination, one sign of market power, by increasing the number of ads shown to users who have greater demand for social networking. In any event, the FTC will likely rely on indirect evidence of Meta’s market power: high market share plus the existence of barriers to entry that prevent others from whittling away at Meta’s share.
Underpinning whether Meta has a monopoly is the threshold question of how to define the “relevant market” in which it has that power. The relevant market for assessing competition is twofold: a product market and a geographic market. The FTC proposes that Meta is a monopolist in a market for “Personal Social Networking Services” (we’ll call it the “PSN market”) in the United States, which is distinguished by a social purpose: a way to connect with family and friends. Inside that market are Facebook, Instagram, Snapchat, and MeWe. Meta, for its part, disputes that definition and points to other apps that it says it competes with, like LinkedIn, Reddit, and YouTube. The bigger that Meta can make the relevant market, the smaller Meta’s market share in that market, and the more likely it is to defeat the FTC’s case.
“The principle is a fair idea,” he told reporters on the campaign trail. “It’s that these businesses earn revenue here in Canada, so the principle is that they should contribute where they earn the revenue. So I think, on this question, we should keep it in place.”
The Conservatives endorsed the DST in their 2021 election platform at the rate of 3% of Canadian operating revenues, the same amount adopted by the Liberals last year.
The Liberals in 2021 promised a “minimum global corporate tax.” It was successfully negotiated with the US Biden administration but blocked in US Congress and repudiated by the Trump administration. The fallback DST of 3% was implemented instead.
Because of federal regulations, the Canadian independent producers who made the series retain the intellectual property in the show, including the global streaming rights they licensed to Netflix which was a major pre-production investor.
That in itself is hardly unprecedented and neither is it surprising that Netflix is making a big deal of its investment and licensing deal because of the ongoing battle over its obligations to broadcast Canadian content.
What’s more noteworthy is the reporting that the production infrastructure costs of shooting in the high north were so steep that CBC, APTN and Red Marrow —the recipient of all manner of tax and broadcaster subsidies to make the series —— needed a deep pocketed foreign streaming partner to make a show with high on-screen production values and an authentic locale (as opposed to shooting in Sudbury).
It’s a reminder that our television subsidy regime feeds shows that are a million dollars per episode, not five million like American hits.
The CBC is by far the biggest spender on Canadian dramas and comedies at $195 million per year (Bell is second at $93 million) but it still has to spread that cash far enough to cover several series each season in different regions of the country, as viewers and taxpayers expect.
Speaking of the CBC, I’ve got an analysis of the defund v. defend debate coming out next week on the Institute for Research on Public Policy’s website Policy Options.
***
For those of you who wanted to know when the CRTC would reschedule its public consultation on radio and audio streaming, it’s September 18th.
The video and television hearing kicks off on May 14. The consultation on “market dynamics and sustainability” (the gatekeeping of content distribution) begins June 18.
The three-day court date for the streamers’ legal challenge to the CRTC’s five per cent levies benefiting Canadian media funds is set for June 9.
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The possibility of a merger between Montréal’s LaPresse and the six financially vulnerable “CN2i” Québec news outlets is off.
The LaPresse offer to CN2i staff, which reports imply required an unpalatable number layoffs, was blocked at the last minute and LaPresse informed its own employees that merger discussions were at an end.
With LaPresse out of the picture, Pierre-Karl Pélédeau’s Québecor appears to be poised to make its own merger offer to CN2i. The media-telco conglomerate Québecor owns daily tabloids in Montréal and Québec City as well as the TVA television network and Vidéotron cable.
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It’s always important to media policy to keep an eye on long-term audience trends, especially in news programming.
ThinkTV is the media marketing group that regularly pumps out polling numbers to remind advertisers where the customers are watching, listening or reading.
Its latest report affirms that television and radio continue to hold their own as the top and third most popular media respectively for national news. The way the polling chart is laid out, you can see that mainstream media is vested in video, audio and text, online or otherwise:
On the same note, American media whiz Evan Shapiro has a new post where he suggests that local news is in high demand regardless of age cohort, although he sees a watershed between GenZ/Millenials and GenX/boomers in terms of platform preferences.
The task is for local TV and radio news operators is to fish for the younger generations where they swim.
None of this is breaking news, but it’s Shapiro’s chart that caught my attention. Check out the age statistics on this one (keeping in mind it’s the American market):
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And lastly, I recommend Ken Whyte’s latest blog post on book publishing and the trade war. This quote stayed with me:
Search ‘books and tariffs’ on Google and you’ll find a bunch of articles in which booksellers and librarians are begging to dodge the draft into Buy Canada. Frankly admitting that they depend overwhelmingly on US product, they’re asking Ottawa to exempt American books from Canada’s slate of retaliatory tariffs. Otherwise costs will rise, customers will be unhappy, business will suffer. We’ve locked arms with Danielle Smith.
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The future of the Canadian Broadcasting Corporation hangs in the balance, waiting for the verdict of thumbs up or down. Live. Or die.
We know where the two major political parties stand on this.
If Pierre Poilievre wins a majority in the April 28th federal election he will move quickly to “defund” English-language CBC services. An omnibus bill will remove legal impediments in the Broadcasting Act and his budget will eliminate up to $1 billion in federal spending. If he has that Parliamentary majority don’t be surprised if he also breaks his campaign promise and slashes the Radio-Canada budget, to fend off a caucus revolt over sparing Québec.
Meanwhile the Carney Liberals will be for “saving” a “new” CBC. Voters in Québec expect no less. And in English Canada there are NDP supporters to be poached.
We’ll see if it gets any more complicated than that, but I doubt it. “Defund” or “save.” That’s the choice.
Naive souls like myself would have preferred to have framed this choice within a thorough public debate, even a royal commission, to investigate what it means to defund, save or reinvent the CBC.
There’s a public appetite for this thoughtfulness. It’s worth remembering that an October 2024 poll put the hard core “defund” forces at only 11% of Canadians. An earlier poll found that 76% of Canadians want to keep the CBC but half of that support wants to see “changes.” Heavens knows what “changes” means. That’s where a more considered public policy debate might have helped.
The stale polls on public satisfaction with the CBC may no longer matter. Donald Trump moves the opinions of Canadian voters in a tweet. Fighting off his annexation plan without a CBC: what a scenario that is.
My hat is off to the grass roots campaigns to save the CBC; not just the Friends of Canadian Media‘s cheeky campaign to “FU__ the CBC,” but also the chat groups popping up on Facebook and Reddit.
But now having the benefit of the views of others, I have something to say that’s a little different.
The Senator (“don’t call me Senator,” he likes to say) ticks a lot of boxes for me. He’s a Canadian cultural sovereigntist. He asks more questions than he makes speeches. He’s unfailingly civil. Like most of the Independent Caucus senators appointed by Justin Trudeau, he carries on Senate business in a collegial and non-partisan manner despite his Liberal connections.
Having said that, I don’t agree with everything he recommends. But he got the big stuff right.
***
Cardozo’s big idea is this: cultural sovereignty is essential to Canada. And the CBC is at the heart of a news and media ecosystem that delivers this sovereignty to Canadians. The CBC employs a third of the country’s journalists and is by far the biggest spender on televised Canadian dramas and comedies set in locales across the country.
To agree with Cardozo’s view, you have to let go of the notion that a free market in news and cultural content — a free North American market– is sufficient to nourish and defend our cultural independence. It also means giving up on the argument that the existence of the CBC is only justified where there is a demonstrated “market failure” of Canadian media, like our far north. That’s a journey into the black hole of “which market?” and “how much failure?” from which I suggest no light will escape.
Cultural minorities in Canada have always understood in the pits of their stomachs what cultural sovereignty means to them. It means survival. It means to breathe. Francophones in Québec and the rest of Canada get it. Indigenous peoples get it. Anglophones in Québec, too.
Us garden variety English-Canadians, not so much. American culture is everywhere and tasty too. Until recently, the Americans kept their crazy politics on the other side of the border, so why worry? Vancouver’s sassy libertarian YouTuber J.J.McCullough liked to say we are cultural “North Americans” and “I’m fine with that.” It’s not an uncommon opinion.
Then Donald Trump announced his plans to reduce our economy to rubble and annex us. Or just turn us (and Greenland) into a vassal state.
The crazy politics have now swept across the border. As Senator Cardozo says in his report, the times demand an independent Canadian media ecosystem. It’s unlikely any Canadian disagrees. The CBC is the key institution in that ecosystem, he says, and the polls suggest Canadians agree with that too.
Cardozo recalls that the 1928 report of the Aird royal commission proposed a cross-country network of publicly owned Canadian radio stations —later christened the CBC— as essential to defending our popular culture and democratic spaces from being dominated by American voices. If anything, the situation a century later is far more urgent.
***
Here’s the Cardozo plan.
First, forget more money for the CBC, at least for now in this moment of national crisis. That means putting off the widely applauded proposal that the CBC relinquish it’s $270 million cut of the advertising market, which would be a 14% reduction of its finances when we need the CBC the most.
I admire the Senator’s pragmatism but would prefer to rephrase his idea as “let’s get the CBC house in order before we ask Canadian taxpayers for more money.”
Second, make a big bet on local news. No more thoughts and prayers about the growing pockets of news poverty and news deserts in rural and small town Canada, but action lead by the public broadcaster shifting resources away from national news coverage and “radically reducing the budget of national headquarters (Toronto, Montréal and Ottawa).”
In advocating for local programming, Cardozo has picked up on the points made in this country by the Michener Foundation and the Friends of Canadian Media and in the US by Rebuild Local News. Our democracy is fraying because of political polarization fuelled by national politics, while Canadians’ less polarized engagement with local democracy and community events is threatened by the financial precarity of local news outlets.
Public opinion polls repeatedly say that Canadians “trust” local news above all media sources. There’s a craving there to be satisfied.
Cardozo’s proposal for the CBC to double down on local news is compelling. But there are many devils in the details. One is whether this is a good time to cannibalize the CBC national news budget at a time of national emergency. Another is how to divert the CBC’s journalism resources into local markets without elbowing private media outlets in the face. That might have been what the CBC just did by expanding its local coverage into local markets with its $7 million in “Google money.”
The senator’s report does have a practical idea that could be put to good use: “sharing content.”
There have long been proposals for the CBC to share its editorial content with private news outlets, waiving copyright. That could go much deeper with a bigger CBC commitment to joint investigations with private news outlets in local markets. Or the CBC could take a page out of the BBC’s book: the 165-journalist Local Democracy Reporting Service that assigns BBC-paid journalists to work for local news outlets.
Next, the third Cardozo idea is really several issues rolled into one: how to drain the political venom about the CBC out of the public sphere. That means confronting issues of public trust, alleged bias, and accountability.
It must be said first that the griping about “CBC bias” doesn’t measure up to the facts.
Repeat after me: CBC News is the country’s most trusted news source. The slightly overweight negative trust ratings suggest the “defunder” hostility is taken into account.
from Pollara Poll, July 2024
But citing this impressive verdict on the CBC’s trustworthiness is not a get-out-of-jail-free card for its journalism. When you report in the opinion minefields of Gaza, pipelines, and (insert controversial issue here), mistakes are going to loom large. Doing better, more disciplined news reporting is an ongoing project for any news organization. Being publicly owned, the CBC has a higher bar to meet.
Cardozo has some good suggestions.
He’d like the CBC to regularly commission and publish external audits of its news coverage. It won’t convince the CBC haters, but it’s useful if it’s something that CBC managers would go to bed worrying about. I imagine they already do. But Cardozo would make this an important tool in public accountability and transparency.
He’d also like to see more debating of public issues on CBC platforms to foster a stronger Canadian culture of intellectual curiosity and tolerance of different opinions. Amen to that.
Another of his proposals is to eliminate the CBC’s in-house editorial Ombud as the arbiter of public complaints, rerouting critics to the industry-administered Canadian Broadcast Standards Council instead.
I’m not thrilled by this idea. There’s too big a volume of complaints to dump them on someone else’s desk. The Ombud reports are quite fair, if you read them. And you can always appeal to the CRTC. Cardozo acknowledges this an optics issue.
But the elephant in the room is that too many Canadians view the CBC as —how shall we say—- insufficiently representative of what makes them feel Canadian.
Too urban. Too central Canadian. Too insulated from those that pay the tax bill.
You can dismiss these dyspeptic public attitudes if you want. After all, the polling supports a far higher degree of satisfaction than dissatisfaction. For sure, some of CBC hating is a culture war cynically fomented by political foes who want to diminish mainstream media, the better to fill that void with right-wing opinion.
But we have a historic opportunity to make popular satisfaction with the CBC deeper and wider if we face the dyspepsia head on.
Cardozo’s big idea (and others including the government’s expert committee have proposed it too) is to implement a version of the British practice of a social contract between the public broadcaster and the people’s elected representatives.
That negotiated BBC charter secures multi-year funding for an eleven-year term, freed from the gyrations of annual government budgets, in return for specific performance expectations. At the expiry of the charter term, it’s judgment day for the public broadcaster.
A CBC charter would be about more than long-term planning and financial stability. It could be a new and different way to make the CBC accountable to the people and for it to feel real in doing so.
Contrast the charter idea to the accountability we have today. Currently the Broadcasting Act provides apple-pie policy objectives for the CBC, but few specifics. The Prime Minister handpicks the President of the corporation to manage the place for five years. The CRTC weighs in with five-year licensing conditions for the CBC to earmark spending for different programming genres. The last time around the CRTC botched it and was directed by cabinet to try again.
This type of governance of the CBC might hit the right balance of accountability versus keeping the ruling party’s mitts off of programming decisions and the day-to-day management of the corporation. But it does nothing to make Canadians feel that it’s “our” CBC.
A CBC charter would be better. Going in that new direction still retains a threat to the CBC’s independence from government: which political party will be in power when the charter expires and is up for renewal? The BBC just dodged that bullet when an election expelled “defunder” Conservatives and welcomed a Labour government. But Cardozo would argue it’s still better than our current approach. It is.
MediaPolicy has two other ideas to institutionalize more public confidence in the CBC.
First, move CBC headquarters from Toronto to Winnipeg. Sounds crazy, I know, but hear me out.
Much of the disaffection with the CBC is articulated as the public broadcaster being a central Canadian hyper-urban “woke” institution. Fairly or not.
So “leafy downtown Toronto”.” So “île des génies.”
The gloss on that critique is that the CBC’s programming content gets torqued towards audiences and advertising dollars in the Toronto and Montréal television markets.
And one can only add this respectfully: a staff of journalists and content creators living in big cities are naturally inclined to be culturally simpatico with the urban neighbourhoods where they reside. That’s a problem for a national institution.
Moving headquarters and staff anywhere is a big, hugely expensive deal. It’s a lot to ask in the name of moving the needle on staff culture and assuaging hinterland hostility to the Toronto and Montréal metropoli. And if it’s done, it should be gradually and without hemorrhaging experience and talent.
The second MediaPolicy idea is even more out of the box, but bear with me.
We should legislate a constituent assembly of randomly chosen CBC listeners, readers and viewers ——200 from one end of the country to the other—- to convene every two years and publish its assessment of the CBC’s performance and direction. This would be especially helpful in shining a light on what Cardozo describes as the CBC’s “blind spots.”
In the corporate world, they call these shareholder meetings. In the public world, they call them town halls. A constituent assembly would give CBC managers and elected politicians better feedback than high-level polling results. It would offer cogent (or not) thoughts about the CBC from Main Street Canada.
***
The idea of a robust CBC anchoring an independent (of the US) Canadian media is of the moment. “To let it go,” says Cardozo of defunding, “would allow for the complete domination by America of our communications system.”
It’s commonplace to observe that American-owned social media platforms are the perfect conduit for misinformation to flood into Canada in a prolonged Trump campaign to destabilize and annex us. It’s also hard to ignore that the Republican blueprint to move the US much further to the right, the Heritage Foundation’s Project 2025,advocates the elimination of government funding to public broadcasting on the explicit basis that it’s “left-wing.”
But there are still those that would argue that a strong Canadian media can and should do without the CBC except in localities where audiences are so sparse that the private news enterprises can’t succeed.
That’s tied in to yet a longer discussion of the financial viability of Canadian news reporting (as opposed to news opinionating) and whether to continue federal subsidies to news journalism.
The same policy conundrum applies to non-news programming. With Canadian private broadcasters so pinched that they are demanding relief from CRTC mandates to produce local news and Canadian entertainment content, how big a cultural hole might there be to fill if the CBC isn’t there to do it?
***
If the CBC survives and isn’t defunded by the next government, there’s an opportunity to make profound changes, as outlined in this post.
But even without big changes, the new President of the CBC Marie-Philippe Bouchard has an inbox full of strategic and programming decisions to make right away.
Forty million Canadians have forty million opinions on how to do that, some of them based on nothing more than our idiosyncratic cultural tastes and technological preferences.
Bouchard must manage unreasonable and unmeetable expectations with tough management decisions on complex questions.
Should the CBC stay on every major media platform, treating each as equally important? Or should it make bigger bets on fewer digital channels?
Would we be better off with one CBC Radio network instead of two, despite the strong ratings?
Should the CBC invest more of its television drama budget in high-budget iconic Canadian shows or keep faith with charming serials in authentic local settings?
Should the CBC find its way back into sports, avoiding the unaffordable price tags of big league programming rights?
If the CBC puts more into local news, what programming is going to get less?
These are management decisions that almost none of the forty million have an educated opinion, informed by a detailed knowledge of audience data and budget dollars.
As Richard Stursberg signed off on his advice to the new president Bouchard, “good luck.”
***
That’s the MediaPolicy view.
Let me close by recalling that one of the experts MediaPolicy interviewed in December, Peter Menzies, may have nailed it when he said the CBC’s “biggest problem is not that – at least for the English part – so many Conservatives want to kill it, it’s that a large number of people just don’t care if it lives or dies.”
I doubt that’s true any more, thanks to Donald Trump’s plan for Canada. But if the next election keeps the CBC alive, instead of killing it, a rebirth of the public broadcaster is an historic opportunity not to be squandered.
***
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Earlier this week MediaPolicy published an interview with the chief spokesperson for Canadian broadcasters, Kevin Desjardins. The President of the CAB pitches his case for a new regulatory bargain between Canadians and the 68 private sector media businesses that form his Association.
However the CRTC’s hearings on said regulatory bargain are now on hold. As expected the Commission has paused three key Online Streaming Act files for the duration of the federal election period: video content policy, audio content policy and gatekeeping in media distribution.
The media policy scene now switches from the pageantry of CRTC hearings to the battlefield of electoral politics. The contestants in the run up to the April 28th election will no doubt spark debate over media policy. We’ll have to wait for their official election platforms.
But a reasonable prediction is that media policy won’t get much traction beyond the political class —with the exception of CBC funding, which will be consequential— while the leaders and voters will be focussed on whatever Donald Trump wants us to be, for example 25% auto tariffs and more coming next week.
In the coming weeks I will try to address both the trade war (if it affects Canadian media and cultural sovereignty) and media policy.
As for the trade issues, I was unsuccessful in provoking the CAB’s Desjardins on what Trump means for Canadian broadcasting. He only speculated that a tariff-induced recession would affect advertising revenues for everyone, including broadcasting.
That’s a bit like refusing to say “Voldemort.”
The main lobby groups for Hollywood and Big Tech have been demanding the White House begin a scorched earth trade war against Canada ever since Parliament enacted the Online Streaming Act and the Online News Act in 2023, followed by the much delayed Digital Services tax in 2024.
Those expected industry demands were dutifully transcribed into formal warnings delivered to Canada from the US Trade Representative (a member of the Biden cabinet) that the US considered Canadian legislation might violate our CUSMA free trade deal. But you will note that the Biden White House did not act on those threats.
Long before Donald Trump got the idea of launching illegal tariffs in defiance of the CUSMA agreement, US trade strategy included a Break-Glass option of just ignoring the cross border trade agreement and launching tariffs against Canada under section 301 of the US Trade Act.
The last time occurred in 1999 in response to Canadian legislation impeding split-run magazines like “Sports Illustrated Canada” that were trade dumping into our domestic market. At least in that case, the US had won the trade litigation at the World Trade Organization before it set a deadline for section 301 sanctions against Canadian steel, plastics, and wood products.
This time around, Hollywood and Big Tech definitely have their “Break-Glass” man in the White House.
The official spokesperson for Big Tech, the Computer & Communications Industry Association (CCIA), has been filing briefs on Capitol Hill and with Trump’s Trade Representative demanding retribution for Canadian legislation.
Note to file, Canada’s Shopify belongs to the CCIA.
CCIA briefs are always packed full of allegations that foreign countries are violating this or that chapter of trade agreements. The better to load up the bargaining table. For the benefit of US legislators, CICA’s rhetoric is salted with bewildered outrage that foreign legislatures are regulating global American enterprises.
The trade allegations should not be dismissed out of hand just because they are inflammatory. But the CCIA sometimes loses touch with reality. In 2023 a CCIA brief informed US legislators and the US Trade Representative that Canada had once agreed that in exchange for the US not retaliating against Canadian regulation of US television access to our domestic market we would never regulate broadcasting over the Internet. It was a brazen fabrication. And the Biden White House no doubt ignored it.
The CCIA’s opening salvo in the anticipated Trump trade war was delivered this past December in a 238-page aggregation of Big Tech’s trade allegations against 53 countries and the 27-state European Union.
Although trade deficits and surpluses are irrelevant to whether trade agreement have been breached, the CCIA got right to the politics by pointing out that “digital services and goods represent a key driver of US export power, with the technology industry delivering a hefty digital trade surplus of $266.8 billion for the United States in 2023.”
Put plainly, Big Tech does some heavy lifting in keeping the overall US trade deficit lower.
In a new filing in January, Big Tech put its emphasis upon America’s interests in intellectual property that, says the CCIA, is impacted by “discriminatory non-tariff barriers” (i.e. regulation) in Canada, Australia, New Zealand and the European Union.
The point of course is not whether such “non-tariff barriers” exist, it’s whether they are truly discriminatory against US companies competing in foreign markets and violate the trade agreements that the US negotiated, signed and ratified with these countries. “Non-tariff barriers” may be the pretext for Trump tariffs next week.
In February, the CCIA got down to brass tacks, providing the US Trade Representative with its list of priorities for trade action.
Top target: the Digital Services taxes imposed by 14 countries, including Canada.
Next: news licensing payments to journalism outlets (Google money) in Australia, Canada, and the EU.
Next: for US video and music streamers, domestic content requirements and cultural cash levies in Canada, France, and other EU countries. In other words, eliminating the Online Streaming Act root and branch.
Whether any of that fits into He-Who-Must-Not-Be-Named’s plan to hit Canada and the rest of the world with “reciprocal tariffs,” we may see that on April 2nd.
***
Canadian legislators aren’t the only politicians with a taste for staging show trials of public broadcasters.
Yesterday MAGA ultraMarjorie Taylor Greene convened US Congress’ new Subcommittee on Delivering on Government Efficiency with subpoenas issued to PBS and National Public Radio.
The committee session was officially dubbed “Anti-American Airwaves.” No hidden agendas for Greene: “I think the important thing for Americans to ask is: Is this where our taxpayer money needs to go? To extremely left-leaning broadcasting and political bias that doesn’t represent all of America?
“[PBS and NPR are] radical left-wing echo chambers for a narrow audience of mostly wealthy, white, urban liberals and progressives who generally look down on and judge rural America.”
Greene did score a couple of points on the PBS refusal to cover the Hunter Biden laptop story (apology made) and the NPR chief’s pre-employment tweets calling Donald Trump a “racist and a sociopath” (also apology made).
It wasn’t all one way traffic as the Democrats on the committee had their turn. Theatre-goers were treated to political satire from Californian Congressman Robert Garcia.
Another Democrat, Jasmine Crockett of Texas, accused Republicans of the right-wing version of Cancel Culture.
“Free speech is not about whatever it is that you all want somebody to say,” she said. “And the idea that you want to shut down everybody that is not Fox News is bullshit. We need to stop playing because that’s what y’all are doing in here. You don’t want to hear the opinions of anybody else.”
The speculation is that Republicans in control of both chambers of US Congress will finally make good on threats to eliminate federal support for public broadcasting, currently budgeted at $535 million USD annually. That’s about 1% of NPR’s combined private-public financing and 15% of the total PBS budget.
The influential non-MAGA conservative opinion columnist George Will recently advocated defunding, saying that government contributions to PBS and NPR funding are a subsidy for affluent audiences.
***
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Kevin Desjardins appearing before a Senate committee in 2022.
March 25, 2025
Kevin Desjardins, the President of the Canadian Association of Broadcasters, is a zookeeper.
This is not to suggest that our private broadcasters are wild beasts. But they are a diverse menagerie that includes the big cats Rogers, Québecor, and Bell as well as all manner of independent broadcasters in radio, television and streaming, from single-station owners to cross-Canadian networks like Global TV. They don’t all want the same thing, they all want to eat, and given the opportunity they just might take a bite out of the animal in the next cage.
Desjardins is the broadcasters’ unassuming chief spokesperson, the fellow who checks his ego at the door, listens to them, and goes forth to advocate for the industry in measured tones to politicians and journalists who routinely vilify his more notorious animals.
Nobody who can read a CRTC report still contends that broadcasters make easy money (the CAB does not represent the cable operations of the big cats). Meanwhile the unregulated American streamers and Big Tech advertising businesses have broken into the kitchen and are eating the zoo’s food supply.
That means Desjardins gets more public attention now when he says that the decades-old regulatory bargain made between broadcasters and government to spend on money-losing news programming and CanCon drama needs to be revisited.
The CRTC is half-way through a series of policy proceedings (now suspended for the duration of the federal election campaign) that are supposed to strengthen the financing and prominence of Canadian media content while “equitably” distributing the obligations upon US streamers and Canadian broadcasters.
Streamers and broadcasters both say “equitable” means “less.” Canadian public interest groups and even some of Desjardins’ own members dispute that.
Where and how the Commission eventually strikes that balance won’t be fully known for another year, a very eventful year.
MediaPolicy spoke to Desjardins earlier this month:
MediaPolicy: I guess we should start with the urgent. What does Trump and trade war mean for Canadian broadcasting?
Kevin Desjardins: Overall, the economic chaos that has been created through the Trump administration’s tariffs and trade posturing have been the most notable impact. If these America-first policies end up leading to a recession that will likely have an immediate impact on advertising revenues for broadcasters.
From the point of view of tariffs, we haven’t seen anything that immediately affects the sector. But I think there is concern in the longer term as we look at trade issues.
We see the cozy relationship that the largest tech players have had with the Trump administration, and we know the extent to which those global tech companies and streaming platforms have dug in to resist any level of Canadian regulation being placed upon them. They think that making use of the service production industry in Canada [by filming US shows here] is sufficient.
At this point, the largest players in the global advertising business are Google and Meta, and tech is in the process of swallowing Hollywood. If there is a trade war coming, we believe that those global tech and streaming companies will be on the American side of the table, as they were in the CUSMA trade negotiations.
MP: Let’s talk about the CBC. One of the policy issues that pops up over and over again is the overlap or competition between private and public broadcasting. Even if CBC went completely ad-free, there would still be public/private competition for audiences. An ad-free CBC could even be a net negative for private broadcasters. Given that some competition or overlap seems unavoidable, how might CBC and private broadcasting better keep out of each other’s way? Or at least complement each other better?
KD: The CBC is always a bit of a fraught discussion for us, and certainly within the current political climate. There’s some diversity of opinion within our membership as to how to deal with the CBC and Radio-Canada.
But the essence of what we can all agree on is that if there is a role for the public broadcaster, then they have to act like a public broadcaster. And that means they should be driven by their public service mandate, and not by market-based decisions.
The easiest way to clarify this distinction is to get the CBC out of the advertising market. Advertising revenue is additive for the CBC on top of their Parliamentary appropriation, but it is the lifeblood of commercial broadcasters.
The CBC’s continued presence in the ad market distorts that market, and the CBC’s purpose in the Canadian media ecosystem. If they weren’t chasing ad dollars, they would be less likely to spend time competing with private broadcasters for popular programming or talent and focusing their efforts on the largest markets.
And moreover, the CBC should have a greater role in fulfilling some of the cultural policy goals found in the Broadcasting Act. Let private broadcasters be driven by their audiences, and the public broadcaster can fill in places that the market alone doesn’t support.
MP: As part of that, what is the importance of a backstop function of CBC where the private broadcasters recede or fail?
KD: I don’t think it’s a healthy approach to see the CBC as a backstop. In some ways, that lets people off the hook from actually addressing the issues that are holding private broadcasters back from being as successful and as responsive to their audiences as they want to be.
And to my earlier point, I think that market concerns can drive the CBC’s decisions on where and how it provides coverage. I share some of the concerns that our colleagues on the print and digital side have when they see the CBC moving into local markets and competing for local ad revenues.
And it was highly curious to me when the CBC announced their intentions with the compensation money from Google, flowing through the Canadian Journalism Collective. They listed out a number of “underserved” markets where CAB members had already invested significant time and resources to set up community news portals. It seemed as though CBC looks at a market as “underserved” simply because they are not present there.
MP: OK, so let’s talk about the future of private television. The pessimistic view is that the old business model has been smashed to pieces by streamers taking Canadian audiences and hoarding US programming rights, while Big Tech has gobbled up our Canadian ad revenue. And that Canadian broadcasters are just coasting the long decline to their inevitable demise. The more optimistic view is that conventional TV and cable distribution are still the first choice of boomers and should be for another decade or so, that leaves time to establish a replacement business model. Let’s blue sky: what does that model look like?
KD: At this point, it’s hard to look even a few years down the road to see where the sector is headed, especially given the pace of change globally as tech and streaming advance quickly. Certainly, the foreign tech giants are sucking the vast majority of ad dollars out of the Canadian economy, and we effectively have a trade deficit in our media market.
But I don’t see broadcasting in Canada as being on a road to inevitable demise. And I don’t think the CAB’s members are throwing in the towel.
There’s still billions of dollars of ad revenue and subscription revenue out there for Canadian services to compete for. And Canadian broadcasters still provide an important place for those programs and events that need to reach a broader audience.
Look at the 4 Nations Faceoff hockey final. Between English and French broadcasts and streaming, you’re looking at more than seven million viewers tuned in live to an event, with a very specific Canadian point of view. There’s still lots of value that Canadian-owned broadcasters provide.
If I look ahead, things are obviously going to change, and we need a regulator that allows Canadian businesses to adapt and change as quickly as our global competitors.
I also see how tech companies have this knack for “inventing” digital versions of things that already exist. I think about the hype around [free advertising streaming television] channels [like Paramount’s Pluto TV or Fox’s Tubi], which are essentially just linear channels delivered digitally. And it makes me think about the next thing that consumers are pushing for with “bundling” of streaming services, not unlike how we have bundled programming services [in the cable package] for decades.
I also see that there’s already a push from several Canadian cable distributors to bundle streaming services with their programming services, which might be a way to bring cord-cutters and cord-nevers back into the Canadian system.
All of the foreign streaming services have been increasing their prices globally, not just in Canada. That’s why Conan O’Brien jokingly congratulated Netflix at the Oscars on their “18 price increases this year.” It’s not because of any of their horseshit talking points about a “streaming tax”, but because now that they have reached a certain level of customers around the world, their business model is now about squeezing more money out of each one.
Fundamentally, I reject the notion that somehow Canadian broadcasters are in peril because they haven’t been sufficiently “innovative”. I look at the digital products that they are offering, and they are absolutely providing a great experience for Canadian audiences.
But you can’t deny the simple fact that Canadian broadcasters compete with global platforms, who have access to infinite amounts of capital from around the world, and who need to operate at that global level. Our pool of accessible capital is more limited because of ownership rules, and then our members are expected to support a plethora of cultural policy goals that fundamentally haven’t changed since Sidney Crosby was a toddler.
Canadian broadcasters are willing to invest in Canadian programming and local programming in a way that global streamers won’t, but any investor needs to know that there is a business case for those investments. I think the CRTC never fully appreciated that fundamental reality, because the assumption was always that the broadcasting business was doing fine. Now that the challenges are quite existential, the Commission needs to better situate themselves in their role as an industrial regulator and think about the general health and viability of the Canadian-owned and controlled sector.
MP: We haven’t talked about radio yet. It seems radio is swimming to keep its head above water in the Internet’s attention economy. I thought Bell passed a cruel judgment on its future when it sold those 45 stations. If we get driverless cars it might be the end of a great medium. But then you look at audio streaming: music and talk radio are more popular than ever, so the demand for audio is bigger than ever. How does radio adapt, or is it just living out its old age?
KD: I think that radio’s reach continues to be vastly underestimated. It’s still relevant, and yes, there are literally millions of young people listening to the radio every day across the country.
The challenge is that all of the additional competition in the advertising business, there’s a disconnect now between radio’s reach and where advertisers are spending.
Many of our members are out there in the digital space, either with streaming over apps or packaging their content for the podcast audience. Often, those digital ad dollars don’t make up for the losses on the linear side.
But radio remains incredible relevant at the community level. They are the ones supporting local charities and events, and during the many natural disasters we’ve seen in recent years, radio has stayed on the air when the power went out or cell service went down.
MP: Regarding the CRTC’s new consultation on audio, do you think the Commission hears your concerns about the viability of radio?
The rationale for regulating the broadcasting sector was the scarcity of spectrum to send out your signal. In exchange for being granted that spectrum, you agreed to certain rules and obligations to fulfill cultural policy goals.
But now that an infinite amount of content from around the world is always immediately available through the internet, and it is broadcast quality, how can the Commission continue to cling to those old rules?
The Commission will point to the Diversity of Voices rules in their decisions, and it makes me want to pull out my hair. Because it is abundantly evident that there is no shortage of “voices” in the content marketplace. It’s such an example of regulating by looking at the rearview mirror rather than the road ahead.
That’s what we saw with the most recent audio notice, which seemed to suggest their “interim view” was status quo for the rules on Canadian radio, plus additional content quotas. But when it comes to the foreign streamers, their interim views are very quiet, if they are there at all.
It’s completely out of step with the reality of what Canadian listeners want. We see that [on streaming platforms] Canadians are choosing to consume about 10% CanCon, which is about where sales of recorded music stood historically. But our [radio] quotas are 35% and up to 40%, and there seems to be no appetite for even having the discussion if those levels make sense.
And from the point of view of the artists, there are infinitely more ways for them to get their music out and to be discovered. They can get placed on a curated playlist, and they can use their own social media channels to share their music and promote themselves. Radio is one piece of the puzzle to break artists, but it continues to bear the highest burden.
And yet, the regulatory bargain that was established for the satellite radio operators nearly twenty years ago seems to be the path that they are pursuing. Just pay more and play whatever you want.
There’s also the modernization of the MAPL rules, and again, we’re concerned that the Commission is going to make it harder for Canadian artists to qualify. If they take out the “P” of that equation, and make a song need two-out-of-three points to be considered sufficiently “Canadian”, it’s going to make things harder to qualify, not easier.
Basically, it all comes down to, if the artist is Canadian, it is CanCon. I don’t understand why there’s such resistance to this. The Commission should embrace this, because if they are as “consumer-focused” as they have claimed in recent years, having rules that tell Canadians that Canadian artists aren’t Canadian will only serve to undermine their legitimacy.
MP: Looking at the umbrella organization that is the CAB, you have something like 68 different members that represent such divergent, sometimes conflicting interests. The big TV broadcasters whose parent companies control cable access are in the same tent as small independents who need that access and the opportunity to make money. Big broadcasters are gouging out each other’s eyes to buy the most popular US programming. And you domicile different content businesses that do better or worse under the current regulatory rules. How do you get anything done?
KD: Every member-based association is a balancing act. There are often divergent opinions, and this is especially the case in an industry association. Our members are highly competitive with one another, and we at the CAB have to respect that. It’s not called “show friends”, it’s “show business”.
Our challenge is to make a convincing case to our members that they are better off singing from the same song book. That many voices with the same message creates resonance, and I think that we’ve done reasonably well in recent years of helping to provide that value to our members. If they don’t entirely align with each other, we hope that we can help them find enough common ground within any legislative or regulatory process.
Building consensus isn’t easy, but as Bruce Cockburn sang: “Nothing worth having comes without some kind of fight.”
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The magic of Donald Trump is that almost anyone invited to his reality show in the Oval Office is automatically his foil and a civilized person: Trudeau, Macron, Zelensky, Starmer and maybe soon Mark Carney, all avatars of the old international rules-based order. Somewhere, somebody is making book on Trump’s soon-to-be-released diss for Canada’s 24th Prime Minister.
Yes, the civility of the old order is long gone. MAGA’s toxic masculinity is about to have a very long run. You avoided these guys in high school, but now they are in your face.
The credo was so dominant (and the US market so inviting) that in 1988 Canada laid all bets on an open trading relationship and an integrated continental economy: something Canadian governments had pursued on and off since Confederation in 1867.
So having played by America’s rules, it’s galling that Trump now wants to use tariff warfare to devastate our economy and take our jobs. Deep down we always knew the US colossus had a taste for conquest. We just didn’t think it would be us.
It’s especially grating when Trump lies to the American public, makes up fake numbers about trade deficits, counts goods but not services, and then insists that deficits are inherently unfair (except where America is in surplus).
Last weekend I posted a video of former Unifor economist Jim Stanford providing context to the US-Canada trading numbers. Here’s the detailed text version.
Stanford makes a number of important observations about size of the cross border trade deficit in goods and services and, as any first-year university student would, reminds us that a trade deficit is not a thermometer of economic health, wealth, or fair play.
The US has run a global trade deficit for fifty years in a row. The gap is now approaching one trillion dollars annually. But as a percentage of American GDP, the US deficit is in modest decline to about three per cent of its economy.
What’s not often cited is the fact that the US is a global juggernaut and net winner in services —digital products, e-commerce, tourism, transportation, financial services and so on—all of which tamps down that trade deficit generated in industries that sell “goods.”
Canada is the US’s biggest export market yet our trade of goods and services is the closest to balanced of any major US trade partner.
The US sells 92 cents of goods and services to Canada for every dollar of goods and services we sell to them.
That trade “imbalance” puts us way ahead of the US benchmark of selling less than 80 cents to the dollar with its major trading partners, with nine of those other trading partners more “out of balance” than Canada.
And the south flowing of trade includes duty-free Canadian oil, gas, electricity and coal. Those vital energy products account for the majority share of the US deficit in goods. It may be that Trump wants to wean the US off of Canadian energy (although it will take years to do so) as if we were the unreliable ally.
In fact most Canadian exports to the US are raw materials and inputs to American products. That’s good for American consumers and good for American exports of finished products (including back to Canada, affirming the half-truth that Canada exports raw materials in exchange for finished products).
But commerce in goods is only half of the trade picture. In services alone, the US has a strong surplus with Canada. For decades, Hollywood boasted of the surplus-building role it plays in exporting cultural services (television shows and movies) to Canada and the world. Its Californian cousins in Big Tech are now doing the same thing in digital services.
In addition to counting services whenever measuring trade, says Stanford, the cross-border repatriation of profits and investment capital made by Canadian and American companies in each other’s markets results in an unofficial trade surplus for the US.
Another unofficial trade number that doesn’t show up in conventional statistics, says Stanford, is that Canada (and the rest of the world) buys more US government bonds than the US buys from Ottawa.
The US is mired in massive government debt but bondholders in Canada and abroad are delighted to snap up its treasury notes. That drives up the US dollar and makes US exports more costly than they might otherwise be.
Remember that when you buy Florida orange juice.
Stanford says that most economists agree that its hard to pin down the value of trade in services —which affects the calculation of trade balance— because of how easily masked that value may be:
One challenge in understanding the impact of services trade is the incomplete and approximate nature of statistics on services trade. It is harder to account for cross-border transaction in services (much of which occurs digitally) than to measure cross-border flows of physical merchandise (which is regulated and logged at border crossings).
Another factor is the ambiguity of intra-corporate accounting for transactions between non-arms-length subsidiaries of international corporations; intra-firm accounting for items like administration costs, intellectual property charges, and profits can be easily manipulated, often motivated by efforts to reduce corporate tax liabilities (by artificially shifting bottom-line profits to subsidiaries located in lower-tax jurisdictions).
Officially, the US export of services to Canada is significant and in surplus to the tune of $32 billion. In fact that US surplus with Canada ——what US Commerce Secretary Howard Lutnick would label as “trade dumping” were it the other way around—— is the US’s second biggest service surplus with any of its trading nations.
Oh, and the largest US service surplus is with….hold your breath now….Ireland.
The holding companies technically own the intellectual property for Big Tech conglomerates that pay themselves for their own IP assets to reduce taxes on revenue earned all over the world.
That’s my parsed version of what Stanford has to say.
His prescription will sound similar to things you have already heard from others:
[We] need to include aggressive efforts to expand trade links with other countries; equally aggressive efforts to reorient Canadian production around domestic (rather than export) markets; emergency fiscal measures to support domestic spending power and household financial stability in the wake of industrial disruption and unemployment (potentially funded in part with revenues from export taxes and/or tariffs imposed by Canada in the event of a trade war); and a national strategy to build alternative domestically-focused industries (including affordable housing, sustainable energy, and human and caring services) to fill the void left by a downturn in export industries.
This is a daunting scenario, but not impossible.
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Over the past four years of posts to MediaPolicy.ca I have written about US-Canada trade relationship in cultural products.
The narrative is always a story of Canadian legislative initiatives and the corresponding US trade threats.
There are three books that are helpful to read if you are interested.
In 2004 Peter Grant and Chris Wood published “Blockbusters and Trade Wars: Popular Culture in a Globalized World.” It’s a superb explainer but begs to be updated. The analysis in Part One (the economics of the global cultural economy) and Part Three (US trade power) still rings true.
In 2019 Richard Stursberg published “The Tangled Garden: A Canadian Cultural Manifesto in the Digital Age.” The third chapter on “The Mulroney Years” is a good read because Stursberg was a senior civil servant and insider in the midst of the US-Canada free trade deal that set the rules in cultural trade for the next generation.
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