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Steve Lafleur: Canada needs to build things faster

Commentary

There’s a pervasive sense that Canada lacks ambition. We’ve had lackluster economic growth for decades, and while our cities have become expensive places, we don’t seem to build much anymore. I’m not sure it’s a lack of ambition so much as a lack of urgency that’s holding us back. 

For all the talk about polarization, Canada has a pretty broad political consensus on some of the biggest issues of the day. Canada’s major political parties agree on maintaining very high levels of immigration, doubling housing construction, and maintaining our position as a global energy superpower, even as the energy mix changes. The trouble is that our ambitions are constantly thwarted by our patience. We all agree that we should do big things, eventually.

Part of the challenge is that doing big things is hard. Even the most valuable projects sometimes have unintended consequences. Even if most people come out ahead, sometimes the burden of large projects falls onto specific groups, be they urban neighbourhoods or Indigenous communities. We need to account for this. But we can’t wait forever for projects that we claim are urgent. 

There are tradeoffs in everything. Whether it’s adding a walkup apartment building to an existing neighbourhood or building a copper mine, there are real externalities to consider. The trouble isn’t so much that we consider them, but that we take far too long to think them through. Months and years of studies, consultations, and litigation. We need to weigh tradeoffs, but it shouldn’t take forever. We can’t just go around labeling things emergencies and then letting them fester indefinitely.

A short quote from the CEO of Teck Resources framed the dilemma nicely:

“Across government and industry, there is growing awareness that supporting the low-carbon transition and our growing population means meeting new demand for critical minerals. And that means working together to get new mines online faster.”

It’s a pretty banal statement that most people wouldn’t disagree with. What’s striking about it is that we hear this kind of frustration all the time, and it doesn’t phase us. Governments and industry agree that we should electrify the economy. We need to mine minerals to do so. So we’re in agreement. Yet, we drag our feet. We say we’re in a climate crisis that requires electrifying large parts of the economy.

Eventually.

Eventually is not when you’re supposed to deal with emergencies. 

Ontarians have been told ad nauseum about the potential benefits to the mining sector from electrification. We’ve been talking about the Ring of Fire forever. It’s a potential source of critical minerals needed to help electrify the economy. It comes up now and then, politicians proclaim its importance, nod in agreement. What’s holding it up? Consultations and a lack of infrastructure. To be fair, there has been some recent progress. But the world won’t wait for us forever.

There’s also a broad consensus that Canada’s cities need better public transportation. Indeed, we have some grand plans in place. Some of them are going reasonably well, like the buildout of regional rail service in the GTA. But when it comes to local public transportation systems, things are going much less smoothly. 

Ottawa’s Confederation Line LRT has become the poster child for dysfunctional public transit systems. The initial budget and timeline were overly optimistic. The project experienced delays and cost overruns. More importantly, its reliability has been questionable. The underlying problems still haven’t been solved. 

Not to be outdone, Toronto has its own debacle with the Eglinton Crosstown LRT. It was supposed to open this year. Then right before it was supposed to open it was announced that it wasn’t going to open this year after several years of delays. The news only got worse from there. Now we’re told that there is no timeline for opening or even a concrete plan to fix the hundreds of defects identified. Maybe one day it will feel like $12.8 billion well spent. When that day will be, nobody knows.

And in the most recent Ontario transit news, Doug Ford announced last week that GO Train service will be extended to service Bowmanville. The 20-kilometre extension is estimated to cost $730 million and is expected to be complete by—and this is not a typo—2041.

Finally, consider our housing ambitions. Canada is now expected to take in 500,000 immigrants per year by 2025. That’s an ambitious and worthwhile goal. The only problem is we’re only building around 195,000 housing units per year, and we’ve already got a big housing shortage. According to analysis by Scotiabank economists, we’re 1.8 million housing units short of the G-7 average for per capita housing units. We’re starting from behind and not building enough to accommodate population growth.

There is also broad agreement on housing. The Trudeau and Ford governments agree that housing starts need to increase dramatically. The official opposition is making increasing housing starts a key part of their next election strategy. Bank economists, academics, and think tank analysts across the spectrum seem to agree. Yet, we drag our feet. 

The City of Toronto and the Government of Ontario made some long overdue policy changes to enable more housing construction. We’re just a decade too late. Other cities in the GTA, meanwhile, are resisting reforms. In British Columbia, the provincial government has introduced some construction targets for municipalities that may one day be meaningful, pending the details. In short, we took way too long and acted way too timidly.

Canada doesn’t lack ambition or capacity. We can do big things, and we want to. We just need some urgency. There are tradeoffs in everything. But we don’t need to drag our feet making those calls. We need to decide now if electrifying the economy, improving public transportation, and housing people are urgent priorities. If it’s an emergency, we should make it an urgent priority. And, yet…

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.