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The ONW Salon:  Should Government Help Solve Canada's Media Crisis?

Susanna Kelley (Moderator): Postmedia and Torstar have announced they will cut nearly 300 jobs and close more than 30 newspapers - most of them in Ontario.  There was a day when such actions would have sparked a Royal Commission to look at how to restore media health in Canada, What should the federal government be doing in this case?  Richard Mahoney, Will Stewart and Tom Parkin weigh in.


Richard Mahoney:

The latest news from Post Media and Torstar are the most recent entries in a long list of stories about the decline of traditional media sources in Canada. Most of our newspapers, indeed most of the so-called traditional media in our country, are struggling. Newspapers are bleeding red ink across the Western world. It seems that the only way to run a quality "newspaper" any more is to have it funded by financial sources that are prepared to lose money on the enterprise.

That's what is happening with iconic American papers such as the Washington Post (with a key assist from the lunacy of the Trump presidency, of course). It is a long tale of woe but it goes something like this: Newspapers get their revenue mostly from advertising. Traditional sources of advertising such as local retail stores are losing money to the Amazons of the world, so they don't spend as much on advertising. The papers lose money, and cut staff, thus declining the quality of the journalism, making those papers less interesting and less readable.

Add in the fact that most of us are transitioning to getting our news online, where the model of selling ads does not work as well for a bunch of reasons which we don't have time to go into here.

As well, most local and community newspapers in this country are owned by Postmedia. They have been bleeding red ink not only because of the above but also because they are controlled by a bunch of debt holders who hold their debt at high rates of interest and essentially just look to find ways to get payments on their debt out of the company rather than put out a quality product. It’s a real mess.

It's hard not to be a little cynical when you read this week's story—buying a bunch of community newspapers in markets where you already own a paper and closing down the ones you "bought". As bad as that is, what is worse is what we lose.

Those local papers are often one of the few ways to affordably find out what is going in your community. That is certainly the case here in Ottawa, where a number of local papers are closing here that give us news on our neighbourhoods, our City Council, and our communities.

What is needed is to find ways to ensure that as we stop reading newspapers the traditional way, and go more and more online, that we have robust democratic coverage and vehicles that cover our communities. And that is only beginning to happen, while the closures and struggles of traditional media sources are all over the place.


Tom Parkin:

The news industry is going through what affected the music industry as far back as Napster and the taxi industry with Uber. Frankly, you could say there’s no difference between this and Gutenberg’s moveable printing press wiping out the scribing monks.

It’s the advance of knowledge and the technology we create with it. It’s not going to stop. Nor should we want it to.

The question, in broad terms, is whether this change is progress, or whether we need public policy and institutional response to encourage progress. I think we do.

I would argue what we are currently seeing is not progress. A strong and independent media is needed to spread information among citizens about the way their government is being run. Democracy without informed citizens doesn’t amount to much.

And while the big papers will still continue to cover provincial and national capital news, this consolidation will weaken Canadians’ knowledge about what is happening in their own town and city halls.

These particular consolidations are mostly in southwestern Ontario.

I’m not convinced that the news media can't transition to an electronic platform and, from there, re-establish reporting on town halls. But I don't think it will be done in print. Nothing wrong with that.

There are some barriers, and they come from the biggest media company in the world.

Yes, Facebook.

Facebook has a huge lead on Canadian media companies in understanding what news their subscribers like. Then they aggregate it for them. They are better at targeted ad placement, sucking all the revenue to their platform, and really enslaving the media world to their portal onto it. Where does that leave local and Canadian coverage?

As far as I am aware, our governments have not yet signed away our cultural sovereignty in trade deals. I am not willing to go too far on this yet—but perhaps we need a news CanCon, at least while Canadian media catches up.

Because I don't see news moving back to print or even back to media site portals.

And there is a certain thing I am mystified at right now: why an advertiser must pay HST when placing an ad on a Canadian media site but not when placing it on Facebook or Twitter, even if that ad will be targeted to Canadians. We are putting our companies at a disadvantage.

The conversation may help us learn more that can be done to ensure local Canadian reporting survives as we head toward global platforms. After all, there's only so much Trump news I can stand!


Will Stewart:

The problems facing Canada's media world are not easy to solve. Disruptive technology has caused havoc in many industries in a few short years. Music, hotels, taxis, even how we pay for goods have all faced fundamental threats to their very existence because of technology.

Who would have thought a few short years ago that your phone would be your travel agent, your wallet, your camera, your car service, your library, and your home stereo and VCR/DVD player. All while still being able to make a phone call and browse the web.

The difference with this industry and the challenges that it faces is that journalism is at the core of our democracy, not a piece of entertainment. The ability for a free press to hold our decision makers, business tycoons, and others to account is just as fundamental to our free and open society as the act of placing a ballot in a box.

You don't even have to take our words for it here. Our own Prime Minister writes in the mandate letter for the Minister of Democratic Institutions: "As well, members of the Parliamentary Press Gallery, indeed all journalists in Canada and abroad, are professionals who, by asking necessary questions, contribute in an important way to the democratic process. "

So we all agree that there is a problem.

What’s the answer? As Richard rightly points out, this is about helping the industry transition from one means of consumption of their product to another.

That comes with challenges to be sure. And not, as we saw this week, just for the big guys and their national flagship publications.

What we have to do is focus on support and transition, not on subsidies and buyouts as are traditionally undertaken by governments. We must resist that urge for a simple money-based solution.

Changes to tax rules may help, as would a robust discussion on moving newspaper assets into charitable trusts as has been done in other jurisdictions around the world.

Money for innovative solutions like the role that AI can play in the industry is a good idea, especially for a government so focused on innovation. But innovation (whatever the government means by that) is not going to provide much comfort for the women and men now out of work only a few weeks before Christmas.


Richard Mahoney:

I think Tom is generally right (man it is odd when that happens, isn’t it?), and follows logically from the situation I tried to describe. I hope that when he says Southern Ontario, he really meant to include Eastern Ontario, because that is where a huge chunk of the closures will be. There are, notionally at least, two newspapers in Ottawa: the Ottawa Citizen and the Ottawa Sun. Both of them are owned by Postmedia. Their newsrooms have been combined, and most of the staff laid-off.

And with the purchases and closures this week, we will lose local and community papers, including ones that were distributed for free, that have been providing an alternative to the Postmedia papers. 

Add this to all of our observations on the decline of media: it is not unlikely that Postmedia will fold in the not too distant future. The Star is also in trouble. Outside of Toronto, including cities like Ottawa, Postmedia owns the only English newspapers in every major market in the country.

So it’s grim—we have one voice in most markets, and even that voice is fading. These developments are tough on the people directly affected, but challenge all of us. We are in the midst of a huge transition and it isn’t clear where things will end up, and whether we will have access to quality journalism, locally and otherwise.

So what can we do in the face of this? As both my friends say, the options are limited. Probably the most important thing done to date is the building of the rich offering that has built.

Voices like Ontario News Watch, and other digital platforms can play a key role.

The government of Canada puts $75 million annually into local and community media. That can help with the transition. Its recent consultation on this issue told them what many of us have observed here today—that Canadians value local sources of news but they increasingly prefer to access their news digitally. No one is going to be able to stop that trend.

The good news? There isn’t much. Established institutions, like the Star and Postmedia papers will suffer, but maybe a more diverse set of voices could emerge. We will also see a number of subscription-based services targeted to those who will pay for their content. That could help, but if those offerings are expensive, most Canadians will give them a pass and that might still mean a huge hole in local and national coverage and therefore democratic accountability. Only an engaged citizenry that seeks out and reads news online and otherwise will ensure that happens.


Tom Parkin:

Let’s take a moment to examine what was done this week.

Several score of properties were exchanged—then shut down. If you look at a map of the surviving properties there is a clear strategy from both TorStar and Postmedia to align markets. After the exchange the Star and satellites have a virtual monopoly in the GTA while Postmedia runs most of the rest of the province.

It's practically a line of demarcation—it's that crisp.

I would suspect that in Postmedia the local papers will merge into regional papers. And in the G.T.A., the satellites will get sucked into the Star. First alignment, then consolidation. From that point, stronger digital media platforms may develop.

Local media will become local content of a larger regional media platform. But still there need to be reporters.

There has been an appeal for public funding for private news companies. I take a dim view on that. When governments give bailouts it is almost always a bad policy (though we must all admit, all parties do it for exigent reasons sometimes). When government bails out media companies it creates—at a minimum—the potential for a political alliance between the editorial direction of the industry, its workers and politicians.

But perhaps there are reformed structures that with public funding could support local reporting. Canadian Press used to be a private co-op. Perhaps a funded but private reporting pool assigned to secondary markets could efficiently supply news to media portals in a subscriber model. The important issue would be to insulate reporters from politics.

But I don't think any of that will matter much if the global news monsters are allowed (at a tax advantage) to push an endless stream of Trump, celebrity, fake news and U.S. news reports into our social media accounts.


Will Stewart:

Sometimes all of us here on the panel overly complicate things.  I want to make sure that in this complex issue, we keep in mind the differences between newspapers and journalists.

To borrow from the music industry (seeing as everyone else is) this would be the difference between the record label and the artist.  In the Napster then iTunes world record companies got slaughtered.  Their first reaction? Undertake legal action, threaten, and complain, all to maintain their existing business model.  What they missed was that consumers had moved on.  But artists did not stop making music. 

Journalists are still here.  And more importantly, students are still studying journalism, they still want to write. What we are going through is serious, complicated, and could shake our democracy.  But democracy is not served by a sheer number of media outlets (as we see in the U.S.) Democracy is served by engaged citizens, and I don’t see that waning. 

We do have to support our journalists and the core beliefs of free journalism in our society, but that does not necessarily mean the newspapers themselves.  We citizens and journalists need to figure out how to respond to consumer demand in a way that the journalist gets paid.

What we have to resist is the long-trusted government bailout.  We cannot have the editors and owners of newspapers beholden to the very government they are covering for their very existence.  That would be losing the independence that makes it worthy of saving in the first place.

So the government must act, but not in the form of a bailout.  Journalists will always write, but how we consume it, if at all, is dependent on what our government does now.  And sadly, they seem to be without many more answers than our panel here today.


Richard Mahoney is a lawyer with deep experience in politics and governance.  He is a former senior advisor to the Rt. Hon Paul Martin, a former Campaign Chair and President of the Ontario Liberal Party. Will Stewart is Managing Principal at Navigator, served as Chief of Staff to several Ontario Ministers and often appears as a national affairs commentator.  Tom Parkin is a veteran NDP strategist, columnist and a frequent commentator on national issues. 


















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