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Opinion: Whatever the short-term gains, the long-term costs of the online news act are far too steep

Commentary

Last week proved to be a major one for the Canadian news media. It started with significant layoffs across Bell Media’s news division including its flagship program CTV News. It ended with the imminent passage of Bill C-18 which mandates Meta and Google to compensate publishers for their online news content. Presumably the latter aims to minimize the risk of the former. The bigger risk however is that it further erodes the public’s trust in the media’s independence and undermines much-needed innovation in the sector. 

The case for Bill C-18 rests on different arguments about how the two big tech firms have come to dominate the digital advertising market and ostensibly benefit from the online content produced by journalistic outlets. But the underlying rationale is that the news media industry is in a precarious financial position and mandated agreements with Meta and Google would inject urgent resources into it. It’s not really much more complicated or sophisticated than that. 

Even its proponents tend to concede that the legislation has been conceived in crisis and that the short-term benefits of a cash infusion for the beleaguered sector have outweighed the long-term costs including second-order effects on the practice of journalism itself or the possible tensions between the interests of legacy media and independent upstarts. A cash-flow crunch, in other words, has come to trump the typical trade-offs inherent to the policymaking process. 

It is true that C-18 may help in the short term. The Parliamentary Budget Office estimates that the legislation could produce as much as $329 million in annual payments to eligible news media companies. 

The accompanying costs however shouldn’t be underestimated. One of the biggest may be to journalistic independence. The PBO’s estimates assume that the annual payments to news media businesses under the legislation will represent 30 percent of the cost of content creation. Yet that’s not the full scope of direct and indirect public subsidies to the industry. As Taylor Owen, a leading scholar on the internet and media, observes in a forthcoming episode of Hub Dialogues, the total level of support between the government and big tech companies could reach as much as 50 percent of total newsroom costs. 

There’s something perverse about the news media relying so much on two funding sources which it often and rightly finds itself scrutinizing: big government and big tech. The potential consequences for journalistic decision-making as well as the public trust are profound. It risks harming the industry’s capacity to hold governments and tech companies accountable and fundamentally changing its relationship with its readers and viewers. The long-term damage won’t be measured in dollars but rather in the diminution of the principles and values that underpin an independent media at the precise moment that we need them the most to push back against the rise of disinformation.

There’s also the inherent problem of the government adjudicating journalism. Journalists have long resisted calls for credentialization on the grounds that it compromises their independence. But government intervention into the industry essentially necessitates it. The government must make judgements about which organizations are eligible for public subsidies according to some criteria. Otherwise everyone with SubStack or a Twitter account could presumably lay claim to government support. The result is back-door credentialing that will henceforth place tremendous power in the hands of regulators over the practice of journalism in Canada. 

And then there are the risks to innovation and experimentation in the sector. We don’t diminish the painful consequences of the market disruption to the news media. It has been extremely challenging for media outlets and affected a lot of high-quality journalists. That’s regrettably intrinsic to Schumpeter’s notion of creative destruction. 

But the creative part of his famous formulation is now manifesting itself. We’re seeing some in the legacy media reconceptualize themselves and new upstarts testing out alternative business models. The process isn’t linear and there are inevitable setbacks. Still there’s reason for some optimism that although journalism will be paid for and function differently than it has in the past, it will ultimately come out the other end with renewed energy, dynamism, and purpose. 

Subsidizing the status quo risks distorting that process and locking in failed business models. Yes, it may help to keep some companies afloat for now. But it will also create perverse arbitrage opportunities for clever investors in the short term and discourage the types of structural changes that will be required for news media outlets to survive over the long term. 

The key point here is that while the short-termism inherent to Bill C-18 is somewhat understandable in light of ongoing challenges in the news media industry, it’s a poor basis for good public policy. We fear that the long-term costs will outweigh any short-term benefits. The biggest risk is that it may be too late by the time we find out. 

Geoff Sigalet: The transparently opaque Chief Justice Wagner

Commentary

Justice Russell Brown of the Supreme Court is now, unbelievably, former Justice Brown. In my initial “quick response” to Justice Brown’s retirement, I argued that the Canadian Judicial Council’s call for an inquiry into his behaviour constituted a dishonourable process. I also explained why it is difficult to understand how Chief Justice Wagner could claim the power to “put [Justice Brown] on leave”, in light of the fact that the Judges Act only contemplates voluntary leave for six months without cabinet approval.

Unfortunately, the Chief Justice’s public comments have only made his role in this matter more uncertain in ways that may threaten the legitimacy of the Supreme Court. 

In his press conference on June 13, 2023, Chief Justice Wagner attempted to clarify how Justice Brown came to be on leave, claiming “we both agreed, in the circumstances, that the best course to adopt would be for him to stay on the side and leave the Court, pending the resolution of this complaint.” This account appears to be in tension with the Court’s earlier press release, which stated:

Chief Justice Wagner put [Justice Brown] on leave from his duties at the Supreme Court of Canada.

Le judge en chef Wagner l’a mis en congé de ses fonctions à la cour suprême du Canada.

The statements in the press release imply Chief Justice Wagner alone was the decision-maker. This raises new questions about the Chief Justice’s role. 

Before exploring the significance of the tension between the Chief Justice’s statements, one has to review why he does not have the power to place puisne judges on involuntary leave. The Judges Act permits up to six months of voluntary leaves—at the request of the judge on leave. Any voluntary leaves longer than that will require cabinet approval. It is true that courts have general powers to ensure operations, but these powers cannot conflict with the Judges Act, which does not contemplate involuntary leaves.  

So Chief Justice Wagner’s early statement that he “put” Justice Brown on leave suggested that he assumed a power he did not have: the power to place a judge on involuntary leave. His statement at the press conference now suggests that Justice Brown voluntarily agreed to be put on leave, which would be lawful. The tension between these statements suggests that the Chief Justice may not be telling the whole story here. It remains unclear just what was agreed to, and if Justice Brown did agree to voluntary leave, new questions arise. 

Above all, it is unclear why Justice Brown was prevented from participating in judgements for which he was already present in the hearing. This included major constitutional cases where litigants prepared arguments expecting Justice Brown to participate in the judgement only to find him excluded, such as Yanick Murray Hall v. A.G. Quebec and R. v. McGregor. Chief justices do have authority to decline to assign judges credibly accused of potentially removable conduct to new cases, but they are still allowed to complete their reserved cases and work with their colleagues in such a situation. The Chief Justice had no power to prevent Justice Brown from participating in such cases while he waited for the CJC to decide on the complaint against him.

Chief Justice Wagner’s broader comments in the press conference only made matters worse. On the one hand, he stated confidence in the system that dealt with the complaint against Justice Brown: 

One complaint is one too many. It should never happen, but that’s reality – it happens. … We’re lucky in this country to have some institutions to take care of those things.

On the other hand, during the same press conference, he advocated for Bill C-9, legislation (currently sent back to the House by the Senate with amendments) that would amend the Judges Act and reform the CJC’s process for reviewing complaints against federally appointed judges:

For me [the judicial conduct process] was scandalous, and had to be changed… So [C-9]’s been kicking around Parliament for quite a few times, quite a few years I would say, it has to stop. This legislation has to be adopted. And I think it would be in the best interest of the public, the best interest of the judiciary, and the best interest of transparency. That said, at the last meeting of the CJC in April, I asked the Committee to look at their own regulations to see if they could not make them more transparent… there’s something opaque right now and I’m not comfortable with that.   

Set aside for a moment the fact that the Chief Justice of the highest Court in Canada is advocating for government legislation concerning the organization of the judiciary, and a regulatory body that he heads. His comments are also clearly contradictory. On the one hand, Canadians should be thankful that our institutions take care of these matters; on the other hand, the current process is “scandalous” and needs to be fixed through specific legislation. This is all the more confusing given that the reporters asking for more transparency in the case of Justice Brown were rebuffed.

Moreover, Bill C-9 removes the constitutional right to judicial review of regulatory action (remember: the Canadian Judicial Council is a regulator exercising statutory power), replacing it with an opportunity to seek leave to appeal to the Supreme Court of Canada, which can deny leave to appeal without reasons. Professor Paul Daly has persuasively argued that this will, at best, need to be “read down” to comply with basic administrative law principles and in fact create more litigation and delay. One hopes that the government will adopt the proposed amendments of Senator Brent Cotter (former dean of the University of Saskatchewan College of Law) that will permit appeals of CJC decisions to the Federal Court of Appeal. This is important given that judicial disciplinary bodies have been known to come to unreasonable decisions, such as in the saga of Justice Patrick Smith (who was unreasonably found to have committed judicial misconduct by becoming unpaid Interim Dean of Lakehead University’s law school) and Ontario Justice-of-the-Peace Julie Lauzon (who was reinstated into office this month by the Ontario Court of Appeal after the discipline body failed to consider her Charter rights).

The Chief Justice is right about one thing, however: there is “something opaque right now,” and none of us should be comfortable with it. The Supreme Court, which not long ago approved a 50-year embargo on its internal communications, is an institution shrouded in secrecy. The CJC—chaired by none other than Chief Justice Wagner—has behaved with almost comic opacity for an institution whose mission is to “Build the trust of Canadians through our transparency.”

A lack of transparency in how courts make decisions—with conference debates and votes conducted behind closed doors—is regularly understood to be an important aspect of judicial independence. Even so, it comes with a trade-off. Some form of public transparency—for example concerning the appointment and dismissal of judges—becomes a key ingredient in maintaining judicial legitimacy in the eyes of the public, especially when the court is compared with the publicized drama of Parliament.

Chief Justice Wagner’s conduct throughout this sad episode has been a transparently opaque mess of contradictions, conflicts, and obfuscation. He is gambling with judicial independence.