This article originally appeared in the Globe and Mail.
By Peter Menzies, July 20, 2023
Regardless of where the dust settles on Canada’s tumultuous battle with Big Tech, the nation’s news industry won’t find stability until its playing field is levelled.
That means ending the CBC’s ability to sell advertising in all of its forms and turning it into a pure play public broadcaster and online news organization.
CBC is not operating – and hasn’t been for years – within its legislated role as Canada’s national radio and television broadcaster. It has expanded into serving as an online newspaper publisher, generating at least $80-million in digital revenue – about 20 per cent of its overall advertising income – in direct competition with Canada’s news publishers. And it’s receiving $1.2-billion in annual federal subsidy to do so.
If Canada’s journalism businesses are to prosper, this distortion of the market, which would be unacceptable in any other industry and is only made worse by the contentious Online News Act, must end.
Whether a well-resourced public broadcasting and online news and entertainment corporation should be maintained is a matter of some controversy these days. But assuming the government’s inclination remains affirmative (not a stretch), the challenge is how to do so while preventing that entity from competing for advertising revenue. Currently, only the CBC’s radio services are entirely taxpayer-backed. The rest of the corporation – its television and online services – fall into the category of publicly funded commercial operations.
Remedies to this problem, as well as an exploration of other proposals, such as a journalism fund fuelled by Big Tech contributions and making newspaper subscriptions 100 per cent tax deductible, are described in a recent Macdonald-Laurier Institute paper by myself and Konrad von Finckenstein. Some recommendations are complex but deconstructing the CBC’s dualistic identity is straightforward and, frankly, nothing else can work unless this is dealt with.
Broadcasters have complained for decades about the bizarre reality of having their taxes used to support their largest competitor. Their concern has since spread to newspaper publishers, who first raised it publicly in 2016 before the House of Commons Heritage Committee. Unanimous in their condemnation of the CBC’s expansion beyond broadcasting, one described it then as a commercial “uber predator.”
At the time, Mélanie Joly was Minister of Heritage. She did nothing to address the issue. Steven Guilbeault then took on the role and he too avoided dealing with the matter. The current Heritage Minister, Pablo Rodriguez, once indicated he might remove advertising from CBC TV news broadcasts, but has followed the head-in-the-sand approach of his predecessors. And he does this while entangling himself in the barbed wire of the Online News Act, which he has naively promoted as capable of reversing the industry’s fortunes. The time has long passed for him to end the practice of subsidizing one commercial operator at the expense of the nation’s others.
The removal of $400-million of advertising revenue from the CBC, much of which could then be reclaimed by private news organizations, is easily compensated through an offsetting increase in federal funding. And while this might prove to be politically controversial, it is well within the world view of the current government.
Mr. Rodriguez would be wise to then make all CBC news content available to other domestic journalism providers. This would ensure that CBC funding would have a flow through benefit to the entire industry, a development that would be welcomed by all and of paramount assistance to small market operators.
Done in concert with five-year funding stabilization and offsetting savings from elimination of sales and other departments involved in CBC’s commercial operations, this could also lead to a more focused corporation. A CBC solely dedicated to informing, enlightening and entertaining the public and no longer burdened by a dualistic identity could become a net benefit to an industry it is currently undermining. And it just might regain some badly needed public trust.
Angus Reid’s latest polling indicates only 47 per cent of Canadians oppose “completely defunding” the CBC. The rest, in a chilling condemnation of CBC leadership, either support defunding it entirely (36 per cent) or just don’t care (17 per cent) if it lives or dies.
Our recommendations for reform would enhance the health of Canada’s news economy and improve the sharing of vital news and information while enriching the environment for investment and innovation.
Mr. Rodriguez has painted himself and the news industry into a corner through his mishandling of the Online News Act. Announcing the decommercialization of the CBC might be a first step in convincing people he actually knows what he’s doing.
Peter Menzies is a senior fellow with the Macdonald-Laurier Institute, a former publisher of the Calgary Herald and a previous vice-chair of the Canadian Radio-television and Telecommunications Commission (CRTC).