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Trudeau simply waving goodbye to Canada’s independent news media by Daniel Bernhard
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Trudeau simply waving goodbye to Canada’s independent news media by Daniel Bernhard

Written by
April 1st, 2018

FRIENDS' Executive Director says while rest of the world is pushing back against anti-competitive, tax-avoiding, democracy-flouting, privacy invading corporations such as Facebook, the Trudeau Liberals have yet to take any meaningful action.

Parliament’s Ethics Committee plans to invite Facebook CEO, Mark Zuckerberg and representatives of other American web giants to Ottawa to answer tough questions about the latest Facebook scandal.

Perhaps someone from Cambridge Analytica and its Canadian affiliate, AggregateIQ, will attend to explain how the Trump campaign may have got its paws on the personal information of 50 million Facebook users without their consent. Perhaps they can tell us whether something similar has happened in Canada.

It’s unlikely that Zuckerberg would accept the Ethics Committee’s invitation. He dismissed the UK Parliament’s request to testify about Facebook’s role in swaying the Brexit vote, and he has so far only sent subordinates to take the heat at Congressional hearings in Washington.

To be sure, the hearings in Ottawa will be good theatre, notwithstanding Zuckerberg’s likely no-show. The committee will almost certainly come up with thoughtful recommendations to protect Canadian democracy from companies like Facebook that are monopolizing the public square, distorting public debate, and cashing in as our democracy buckles under the strain.

Canadians already sense that Facebook is not a credible news source. A recent Nanos Research poll commissioned by Friends of Canadian Broadcasting found that only 17 per cent of Canadians trust news delivered by Facebook, compared with 80 per cent for news received directly from Canadian television and 83 per cent for Canadian newspapers.

What Canadians really need isn’t another theatrical committee hearing but urgent, meaningful action from the federal government. Already, more than 10,000 Canadian journalists have been laid off and hundreds of media outlets have gone dark. Some of our largest publishers, comprising hundreds of daily publications, may not live long enough to cover the 2019 election. The same goes for independent TV stations in small- and medium-sized communities across the land.

Canadian media companies – conventional and online – offer an antidote to Facebook’s information stranglehold. But they’re struggling badly as the ad revenues flee to a few giants in Silicon Valley. As Canadian journalism and story-telling withers, the foundations of our democracy erode.

And, as if this weren’t bad enough, the federal government is making the problem worse. Through tax policy, Ottawa subsidizes American web giants like Facebook and Google by $1.3 billion a year: effectively allowing them to sell their ads at an unfair discount compared to Canadian media.

We’ve been here before. Recognizing the importance of our media to Canada’s sovereignty, federal governments in the 1960s and 1970s created tax incentives for Canadian companies that advertise with Canadian radio stations, TV stations, newspapers, and magazines. Advertisers could still choose to reach Canadian consumers by advertising on a US border TV station or print outlet, but these expenses were no longer tax deductible.

For a generation, this incentive protected our media from unfair foreign competition — which benefit from enourmous economies of scale — while preserving Canadian jobs and voices.

But a huge loophole has opened up: this incentive doesn’t apply to internet-delivered digital media. This digital advertising loophole drains $5 billion from Canadian media each year. Most of that money travels down a tax-free express lane to Google, Facebook, YouTube and other American mega-corps.

The rest of the world is pushing back against these anti-competitive, tax-avoiding, democracy-flouting, privacy invading corporations, but the Trudeau Liberals have yet to take any meaningful action. Instead of cracking down, Ottawa has partnered with Facebook to combat fake news, even though this platform is a primary vehicle for spreading fake news!

It’s becoming increasingly clear that Ottawa has a platform problem. For reasons unknown, the government is in thrall to the web giants.

It’s not just Facebook and Google. Ottawa also gives Netflix preferential treatment that relieves the streaming giant of requirements to invest in the production of Canadian programs or remit sales taxes. Netflix saves more than $100 million every year because Ottawa lets it play by different rules than its Canadian competitors.

These massive advantages Ottawa is bestowing on American media giants are sending Canadian media into a death spiral.

Google, Facebook, Netflix, and the other tech giants constitute the biggest threat to Canada’s independence and cultural sovereignty since Hollywood. Their stranglehold on information and entertainment threatens our democracy and undermines our ability to tell our own stories. They are muzzling Canada’s voice.

Who will report our stories and produce programs about our country when Canadian media dies? CBS? The BBC? Google? Facebook? Don’t hold your breath.

Quebec took an important first step to level the playing field in last week’s budget, by mandating Netflix to collect sales taxes like all other businesses do. The Trudeau government should follow suit, and end the tax-free status and other unfair advantages American monopolists have enjoyed that squelch Canada’s voice.

Closing the digital advertising loophole would not cure everything, but it would bolster Canadian media outlets while increasing federal and provincial corporate tax revenues by $1.3 billion annually, and we already know that Canadians support government action on this file.

A country without a voice cannot long survive. Ottawa can stop the bleeding, and it must act now, before Canada’s voice is silenced for good.

Daniel Bernhard is Executive Director and Spokesperson for the watchdog group Friends of Canadian Broadcasting.

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