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Richard Stursberg: The news industry’s biggest problem isn’t financing—it is trust

Commentary

The news media in Canada is in crisis. Policy responses to date are failing to solve for the information that citizens need to make informed decisions about important issues and debates. The Future of News series brings together leading practitioners, scholars, and thinkers to imagine new business models, policy responses, and journalistic content that can support a dynamic future for news in Canada.

There are many problems with the news media industry. Much has been made about its shrinking revenues in the digital age. But the chief problem with news isn’t financing—it is trust.

A key source of the industry’s trust deficit can be found in the Faustian choices that it has made in the social media environment. Much of social media is a sewer, polluted with content that claims to be true but is, in fact, disinformation and fake news. Despite the dirty water, Canadian news companies have for many years looked to social media as a key partner in distributing and financing their content.

Unfortunately, when news organizations allow—indeed, encourage—their stories to be posted on social media, sitting side by side with falsehoods and deep fakes, it probably compromises Canadians’ confidence. They trust the traditional news less. They doubtless think, as people often do, that you can be judged by the company you keep. When that company looks more and more like traditional news, when it is difficult to tell what is real and what is not, it is no wonder that it engenders a crisis of trust.

The problem of trust has been getting worse for some time. The Reuters Institute for the Study of Journalism at Oxford University reports that only 39 percent of English Canadians trust most news most of the time. This is down from 58 percent only five years ago, and the pace of decline is accelerating. 

As the bottom has fallen out of news financing, the government’s efforts to force Google and Meta to pay for content have received a good deal of attention. The crisis of trust, however, is the more profound existential threat.

The two are, of course, interlinked: if Canadians cannot trust the news, why would they bother to consume or pay for it? Inverting the formulation, however, provides a measure of hope: solve for this problem, and people will certainly be prepared to pay for a trustworthy product.

The operation of fake news is particularly insidious. It has its own dynamic. Because there is a natural human tendency to be most interested in stories that are out of the ordinary or involve strong emotions, there is a built-in bias within social media to emphasize them. The algorithms direct people to the most viewed posts. And, as the most viewed posts are often the most extreme, the machine dishes them up with greater frequency.

The more extreme and unlikely the information, the more it leads people to look into it. New York Times columnist Zeynep Tufekci described the effect this way:

What we are witnessing is the computational exploitation of a natural human desire to ‘look behind the curtain’, to dig deeper into something that engages us. As we click and click, we are carried along by the exciting sensation of uncovering more secrets and deeper truths. YouTube leads viewers down a rabbit hole of extremism, while Google (its parent) racks up the ad sales.

These effects mean that fake news and hoaxes are more likely to be viewed and more likely to be shared. A study in Science showed that fake news stories spread faster than real ones. Social media makes money by keeping people on a site as long as possible. That way, they are exposed to the maximum number of ads. This creates a bias toward the most dangerous and offensive materials. As the study’s authors wrote, “Designed to maximize user time on site, Facebook promotes whatever wins the most attention. Posts that tap into negative, primal emotions like anger and fear, studies have found, produce the highest engagement and so proliferate.”

The problem for real news is that the digital environment is only going to get worse. As AI penetrates social media content, it will become effectively impossible to distinguish the real from the fake. Indeed, some outlets are even actively working to blur the distinction. It is not hard to see how existentially threatening to our shared reality this could be. CBC’s The National will appear with Adrienne Arsenault hosting, the set identical to what it has always been, except the words coming out of Arsenault’s mouth will not be her own. They will sound like her, but not be her. It will be impossible to tell the fake National from the real one.

The Canadian government has been promising to address the problem of disinformation for almost six years. When the prime minister met Sheryl Sandberg, the COO of Meta, at Davos in 2017, he warned her that unless Meta did something to stem the flow of fake news, it would be regulated.

When asked by journalists about the problem, he said, “That’s something I’ve actively asked our minister of Democratic Institutions to lean in on and develop tools to protect Canadian and our electoral process.”

For her part, the minister, Karina Gould, seemed stumped by the request. She did not propose any new “tools”; rather she said that she hoped that Facebook would fix things but lamented the fact that “the companies have so far been reluctant to take responsibility”. Nevertheless, she reassured Canadians that rather than making regulations, she was watching what was happening in Europe.

And so, it continues to this day. The government continually promises to bring forward an online harms bill, but nothing materializes.

“The best course might be for the news industry to simply leave social media.”

Even when serious countries attempt to regulate social media, they fail. The most sophisticated attempt was made by the European Union. It produced an extensive Code of Practice on Disinformation. It was developed in conjunction with the social media companies and agreed upon by them. When the EU studied how well the code had worked in keeping Europeans safe from Russian disinformation about the war in Ukraine, they drew the following conclusion two months ago.

…evidence suggests that the examined tech companies’ efforts to limit the Kremlin’s malign activities on their platforms were insufficient…In Central and Eastern European languages…the platforms only moderated a small share of (fake) content…even when it was reported to them… while the algorithms continued to amplify that content.

The situation with respect to X has become substantially worse since Elon Musk took over. It is now awash in pro-Kremlin disinformation, antisemitism, lies about the 2020 election in the United States, Q-anon conspiracy theories, racial slurs, and climate-related falsehoods. It is ironic that the platform that once was the springboard for the Arab Spring has become the most polluted part of the sewer.

It appears that the social media platforms cannot or will not clamp down on disinformation and fake news, even when it comes to the most serious international crisis of the last twenty years. It appears, as well, that governments do not know how to force X, YouTube, Meta, and all the others to behave responsibly.

Under the circumstances, the best course might be for the news industry to simply leave social media. It could then set up its own platform, access to which would only be granted to firms that subscribed to a tough code of journalistic ethics like those in place for the CBC, the Globe and Mail, and CTV. This would ensure that content appearing on the platform would be—to the extent humanly possible—true, accurate, and fair. People coming to the platform would know that they would not be exposed to fraud, hoaxes, or AI-based fake news.

Such a platform would go a long way to restoring Canadians’ trust in the news. While it would not, of course, solve the financial problems of the industry, it might go some small distance in that direction. When Canadians were assured that the news was fact-checked, double-sourced, and produced by people of unimpeachable reputation, they might well subscribe with a sigh of relief.

It would be a simple matter to set up such a platform. The Canadian news industry could finance it collectively and establish the appropriate standards for inclusion, mechanisms for monitoring, and machinery for enforcement. It might operate like a cable company, allowing Canadians to pick only the news sources that they want to pay for or take whole packages of sources at discount prices. In all cases, though, they could buy news with confidence, knowing that they were not going to be deceived.

Continuing to operate on social media is no longer a sensible strategy for the news business. The Metas and Googles will never pay, nor will they clean up their mess. They will simply carry on as before, further eroding trust in real news, while they make more and more money. They may even drop real news of their own volition. Many of them are beginning to feel that it’s more trouble than it’s worth.

The news industry does not have many good options if it wants to survive. The current strategy of relying on social media for money and distribution is a dead end. There is no guarantee that collectively building a new platform based on traditional journalistic standards of truth and fairness will save it, but it’s clear that something more daring and radical is required.  

The Future of News series is supported by The Hub’s foundation donors and Meta.

Steve Lafleur: Canada’s supply management mentality is holding us back

Commentary

Canada is a big, prosperous country. Why do we insist on small-minded solutions to our problems?

For far too long we have erred on the side of far too little. Whether it’s out of considerations of fairness, protecting oligopolies, or the environment, our public policy is too focused on preventing an oversupply rather than ensuring consumer demand is met.

When governments put their thumb on the scale, it’s often because they’re worried about oversupply rather than undersupply. This supply management mentality needs to be discarded.

Agricultural supply management is a program that limits the supply of dairy, eggs, and poultry in an attempt to maintain stable prices. While stability might be the aim, structurally higher prices are the side effect. One prominent study estimated that milk prices are twice as high in Canada as in the United States as a result. While many words have been spilled on the topic of milk prices, I think it’s a useful analogy for large swaths of the Canadian economy. 

Supply management isn’t just about stable prices for consumers, but about protecting industry players. We see this in other sectors ranging from telecommunications to air travel. Stable but high prices are seen as necessary to protect incumbents. It might be a good way to run a small, closed economy. It’s an odd way to run a large, relatively globalized economy. 

Canadian governments often operate as though we’re a small, stagnant country that desperately needs to cling to its place in the world—and the things that make it unique—lest we fade away. In reality, Canada is a large and growing country. The supply management approach might work in some small European countries, but it doesn’t work when you’ve got both a rapidly ageing and rapidly growing population. 

Now, you might pause at the idea that a rapidly ageing population along with rapid population growth are distinct issues. After all, much of that population growth is in response to our ageing population. Large-scale immigration is justified in part by our ageing demographics, after all. The trouble is that while immigration helps blunt a few challenges, such as labour shortages, it creates other challenges, such as housing shortages. 

That isn’t to say that immigration isn’t a net benefit. But to get the full benefit, we need a more dynamic economy. Take housing, for instance. We’ve already got a deep housing shortage. One way to help address that is by welcoming more people with the skills to build more homes. The immediate effect is to take up existing housing units, but that can pay off if they’re able to help accelerate the pace of homebuilding. Only, construction sector productivity has been lagging. We need more dynamism in the construction sector if our immigration levels are going to be sustainable. 

It’s not just productivity, though. It’s also about land availability. Take the Greater Toronto Area, our largest regional economy. The McGuinty government identified urban sprawl as a major challenge to the region. There are indeed costs associated with sprawl. Infrastructure, pollution, lost farmland. There are surgical ways to address some of these challenges, but they took a blunt approach introducing the Greenbelt. Which meant that the housing industry needed to re-orient towards more urban density. The only problem is that while they cracked down on sprawl, they didn’t legalize enough density. So we got shortages. The government put its thumb on the scale in favour of less of a particular type of housing, but the net effect was that we couldn’t build enough of any type of housing to keep up with population growth.  

Then there’s the other side of that demographic equation: the rapidly ageing side. Canada’s health-care system is in trouble. This used to be a controversial thing to say, but it’s becoming impossible to ignore. In 2021, Canada had the highest health spending as a percentage of the economy of 30 high-income countries with universal health care (on an age-adjusted basis), but ranked at or near the bottom in many key areas of performance. A recent study by the Canadian Institute for Health Information identified significant surgery backlogs, staffing shortages, and lack of access to family physicians as pressing issues with the system. If you’ve dealt with the health-care system in any serious way lately, you probably don’t need to hear this. You’ve seen it with your own eyes. 

There are many suggestions out there for addressing our challenges. Money probably isn’t the primary issue, given that we’re already leading on that metric. We probably need to incorporate some best practices from European health-care systems, including cost-sharing or more private delivery options. That runs contrary to our supply-managed version of health care, but probably necessary if we want to provide adequate health care to an ageing population. 

Of course, embracing a more dynamic approach will annoy some people. Doctors, farmers, and homeowners don’t always like changes. But the country is changing whether policymakers do anything or not. It’s growing rapidly, adding about a million residents a year. There is no status quo option. We’ll either reform policies, or the consequences of our supply management approach will become starker, whether it’s in house prices or in hospital wait times. 

This also requires a bit of an attitude shift that I suspect is already underway. We need to stop viewing “too much” as a bigger problem than “not enough.” This is capitalism, baby. Sometimes businesses are going to fail. That’s ok. Most of our economy works that way, whether it’s a tech startup or a restaurant. Strong businesses chase out weak businesses. That’s good for consumers, and good for the economy. 

Thankfully, there are hopeful signs that change is happening. 

Take housing, for instance. Governments at all three levels have made policy changes that would have seemed unthinkable two years ago, ranging from ending detached-only zoning to eliminating mandatory minimum parking requirements in cities across the country. Similarly, several provincial governments have moved to allow pharmacists to take on more responsibilities, including writing some prescriptions. Change is possible. 

Given our growing and ageing population, clinging to the status quo isn’t an option. We should embrace more economic dynamism and less supply management. Governments should default to erring on the side of more rather than less. Undersupply—whether it’s in health care or housing—is among our biggest problems. It’s also a choice. One we don’t have to make.