By Peter Menzies and Konrad von Finckenstein
June 7, 2023
Executive Summary
Beginning in 1989 with Sir Tim Berners-Lee’s invention of the World Wide Web and later, following the creation of high-speed Internet available on fixed and mobile devices, people have had access to the vastness of human knowledge using a device they can carry in their pocket. These incredible innovations have created entirely new industries, caused most existing ones to transition to new ways of delivering their goods and services, and pushed to the brink of extinction those that are incapable of adapting.
One of the businesses that collapsed was the newspaper business, which for more than 225 years was the backbone of Canada’s news and journalism industry. Over a very brief period consumer attention and advertising dollars shifted online where innovations such as targeted, low-cost advertising offered effectiveness and cost efficiency that traditional media struggled to duplicate in print or over the air.
Since 2016, representatives of the newspaper industry have been lobbying the federal government for assistance. This has resulted in a series of patchwork, temporary government measures intended to help the familiar news outlets survive financially as they “transition” to digital media operations. The most recent effort involved the tabling of the controversial Online News Act (Bill C-18), an effort to redistribute advertising income lost by news organizations to offshore tech companies such as Meta (Facebook) and Alphabet (Google).
There is a profound public interest in Canadians having access – in whatever fashion they most prefer – to accurate information at the neighbourhood, local, provincial/territorial, national, and international levels. The Internet provides ubiquitous access to international news platforms. Policy-makers should therefore focus on what is needed to sustain reasonably efficient domestic operators in a competitive environment focusing on the provision of what is commonly referred to as civic journalism.
The purpose of this paper is to frame a national consultation and to offer foundational policies for a national news industrial strategy. Canada needs a national news policy. Such a policy must at all costs avoid a direct funding connection between the government and newsmakers or news intermediaries. This is essential for a free and independent media to flourish and for public trust to be maintained. The policy also needs to ensure fair commercial treatment for Canada’s news producers, digital intermediaries, and consumers/subscribers.
An effective news media public policy would contain several elements. It would:
- Reform the CBC, which is not a pure-play public broadcaster; it is also a commercial competitor – heavily subsidized by public funds – to all other private news organizations, distorting the media landscape and limiting opportunities for competition.
- Encourage support from subscribers by offering them tax benefits.
- Support the digital transformation.
- Change the status of the current tax benefits and funds currently in place to support journalism.
- Re-evaluate the CRTC’s role.
- Create a Canadian Journalists Fund. The funds would be taxed from Digital News Intermediaries (DNIs). DNIs currently disseminate news and in the process gain valuable data on users’ preferences and interests. It will be important to ensure that the government is not involved in the administration or distribution of the Canadian Journalists Fund monies and thus cannot influence freedom of expression directly or indirectly.
That, however, will not solve the industry’s financial problems, nor would it be appropriate were that the case. The industry will have to take responsibility for its own state of affairs. What is necessary is not the survival of all companies currently involved in producing journalism, but that journalism and journalists can transition from unstable platforms to those capable of sustaining the work in the future. Allowing market forces to drive the industry is, ultimately, the solution. First, however, it is necessary through public policy to make certain that a level playing field is in place and that appropriate and impartial incentives are also in place. We believe the recommendations in this paper form the foundation for the transformation and renewal of Canada’s news industry.
