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Peter Menzies: The government surrenders to reality with rewritten Online News Act—and pleases no one

Commentary

There were some long faces in the news industry last week when Heritage Minister Pascale St-Onge rolled out the final terms of her surrender to reality.

Media executives who once campaigned for the Online News Act with sugar-plum visions of Big Tech cash dancing in their heads were left to deal with some pretty serious lumps of coal. After years of effort to procure what they once fancied would be hundreds of millions of dollars annually from web giants, all St-Onge could bring down the chimney was a bump up in Google’s spend to $100 million.

How much the mother of all search engines was already paying to publishers is unknown, but in-the-know estimates tend to range from $30-$50 million. Splitting the difference at $40 million would mean the industry—newspapers, broadcasters, and online platforms—wound up with $60 million in fresh cash, give or take. 

That’s less than the Lotto Max jackpot Rhonda Malesku of Kamloops and Ruth Bowes of Edmonton shared last summer. A lot of money for Rhonda and Ruth for sure, but for an entire industry it’s a drop in a leaky bucket.

Then there’s the fact the Act resulted in Meta blocking all news links in Canada on Facebook and Instagram. Again, the exact cost is unknown but the social media company had been spending $18 million on journalism supports plus—and here is the killer—Meta estimated it had been sending $230 million a year worth of referrals to news websites. 

Even if Meta is only half right, that still leaves the news industry many tens of millions of dollars worse off. If Meta’s estimate is accurate—and no one has really debunked it—the scenario is a lot uglier.

This is what happens when you make things up. 

The Act was rooted in the make-believe premise that “web giants” were profiting from “stealing” news. Legislation was designed on that basis to force Big Tech to “negotiate” commercial deals and share those profits with all news organizations.

In the end, as Michael Geist has detailed, that charade of “compensation” was dropped as the government, desperately afraid Google would follow Meta’s lead, posted regulations that essentially rewrote the Act to suit the search engine and, as an aside, puzzle lawyers. All that the media were able to salvage from the hustle was a fund they wound up fighting over like street urchins in a soup kitchen.

Here, St-Onge actually did something sensible. Her original plan was to have the fund distributed solely on a per journo basis. In other words, if there are 10,000 journalists, $100 million would turn into $10,000 per journo, never mind whether they are paid $35,000 or $150,000. The problem with that is that one in three Canadian reporters works for CBC, which is not in mortal peril. The next highest is Bell Media, whose parent company made $10 billion last year. Meanwhile, the Toronto Star is hemorrhaging at a rate of $1 million a week, small centres are becoming news deserts, and Postmedia’s stable of zombie newspapers continues to, well, zombie on.

Broadcasters would have consumed 75 percent of the loot and the vast majority of the cash would wind up with companies for whom news is not a primary aspect of their operations.

St-Onge changed that to cap private broadcasters’ windfall at 30 percent, with CBC limited to 7 percent.

That means 63 percent of the money will go to operators in the greatest peril which, for a fund resulting from a need to address industrial poverty, is at least rational.

Still, there was grumbling.

“Well, this is disappointing—sure wasn’t expecting a cap on broadcasters’ access to compensation,” Tandy Yull, vice president of policy and regulatory affairs for the Canadian Association of Broadcasters, posted on LinkedIn.

“Hey, Universe! More needs to be done to support Canadians’ most important providers of news, local radio, and television stations, who are facing significant—even existential—declines in advertising revenue,” she added.

Yull went on to stake broadcasters’ claim to government assistance currently reserved for newspapers and online-only media: the Journalism Labour Tax Credit and the Local Journalism Initiative.

And of course “our democracy demands that we explore these and other options—soon.”

She may not have long to wait.

Broadcasters opened up a fresh lobbying for loot campaign just last month when the Canadian Radio-television and Telecommunications Commission (CRTC) held a hearing to launch the implementation of the Online Streaming Act.

Supposedly about funding Canadian entertainment programming, the concept of a news fund was introduced early and repeated often. 

Commissioners appeared happy to embrace well-worn lines about a news “crisis” that needs  “urgent” attention to prevent—cue the tympany—the death of democracy. And they did so without needing to be persuaded there was any rational reason for creating a fund which, logically, makes no more sense than taxing cinemas to pay for newspapers. Nor were any concerns raised about impacts on entrepreneurship and online innovators.

“Local news is in crisis and requires immediate intervention,” Susan Wheeler of Rogers, which made $7.12 billion last year, told the panel.

“A fundamental outcome of the modernized contribution regime must include new mechanisms to provide long‑term financial support for high‑quality Canadian‑produced broadcast news from credible outlets,” she said, calling for 30 percent of money raised from foreign online streaming companies to be directed to a news fund “accessible by all private TV and radio stations producing news.”

The humiliating squabbling over the remnant scraps of the Online News Act clearly wasn’t the end of the Great Canadian Quest for other people’s money.

So maybe the shakedown of Meta and Google didn’t quite work out. But Spotify, Disney+, and Netflix? They have money. Let’s mug them instead.

It’s not like anything bad could happen. Right?

Antony Anderson: The most divisive election in Canadian history

Commentary

Canadians’ ignorance of our own history is a pervasive and regrettable problem. The Hub is pleased to play a small part in attempting to turn this tide by presenting a weekly column from author and historian Antony Anderson on the week that was in Canadian history.

December 17, 1917: The conscription election is held

How do you deal with fellow Canadians when they’re traitors to Empire, King, and Country? 

How could you be loyal to any country that insisted you die for a foreign monarch and a distant war? 

These were the irreconcilable accusations French and English Canadians hurled at each other as they lurched towards the most bitter, divisive election in our history. By 1917, close to 130,000 Canadians, all volunteers, had been wounded or slain in a bloodbath that was supposed to have been a short, jolly romp to thrash the Hun. The francophone solitude had no desire to march off to ravenous killing fields. The grieving anglophone solitude demanded the government bring in conscription to compel the slackers to do their duty. 

Prime Minister Robert Borden had originally promised not to bring in conscription but the first patriotic surges had dimmed and not enough men were rallying to the cause. Determined to maintain Canada’s commitment, Borden decided to break his pledge, knowing full well this would inflame Quebec and farming communities across the West desperate for hired hands. Anxious for a show of unity, Borden set out to establish a coalition government which would then bring in the dreaded legislation. Liberal leader of the opposition and the first francophone prime minister, Sir Wilfrid Laurier refused to join. He would not break faith with his own people. The vast majority of his MPs held steady and did not cross the floor. Borden managed to persuade ten prominent Liberal anglophones to join the new Union Cabinet in a temporary uneasy alliance that gave the barest glimmer of unity. He called the election for December 17th.

To win the election, Borden did everything he could to rig the vote. Historians have called him cynical but that misses the mark. In 1917, the war was not some distant abstraction. Every family had been touched by death. Borden himself had sat at the bedside of wounded soldiers in Europe and wept. He felt duty-bound to honour their sacrifice so he was ruthless. He took the vote away from conscientious objectors and from immigrants who had arrived after 1902 from “enemy alien countries”, (Germany and the Austro-Hungarian empire). He gave the vote to soldiers at war for the first time. He gave the vote to certain women for the first time, specifically those women with a father, husband, son or brother in uniform. The gerrymandering was breathtaking but it was all done, as Borden saw it, to defeat barbarism, preserve decency and democracy, save the Empire, and uphold Canada’s honour. In the furious campaign, both sides accused the other of treachery and moral corruption. Each was convinced of their own righteousness. Each refused to listen to the other.   

On December 17, 86 percent of the electorate cast their vote, the highest turnout in a Canadian election to this day. 1,077,569 loyal Canadians, 57 percent of the electorate, voted for conscription. Two of those votes were cast by future prime ministers, then in uniform, Lester Pearson and John Diefenbaker. On the other side of the emotional chasm, 548,611 loyal Canadians, 35 percent of the electorate, voted Liberal. Triumph and devastation ruled the day. 

The Union party won a solid majority with 153 seats while the Liberals managed to hold 82. The provincial results revealed the true extent of the “racial” division. The anti-conscriptionist Liberals were decimated in the Maritimes and Ontario and nearly wiped out in the West. The survivors were anchored in Quebec, taking 62 of the 65 seats. The largely anglophone Union government had secured a poisoned mandate to compel Canadians into uniform by taking national unity to the brink. 

Despite all the rage and rancour, the wounded Dominion endured. The war would at last end the following year before many of the new conscripts would even reach Europe. The Union party no longer had a reason to exist and was dissolved for the next election. Tempers cooled though no one forgot. 

Perhaps the most lasting impact of the election was embodied in the person of the Liberal candidate for North York, Ontario, a former minister of labour in Laurier’s Cabinet, an anglophone who had remained loyal to the old leader. The candidate paid a predictable price for that loyalty in imperialist Ontario. Two years later, however, William Lyon Mackenzie King would go on to win the Liberal leadership, thanks to the support from francophone delegates who remembered his loyalty to Laurier.

King would become prime minister in 1921 and for the next two decades would make national unity his holy grail. To keep the Dominion safe from any future conflagrations across the ocean, he would wrench control of Canada’s foreign policy from the lethal imperial grip and then ensure that his country’s foreign policy was a masterpiece of evasion and circumventions and hesitations and inaction—and most Canadians would agree with his approach for a very long time until another world war tore apart that conventional wisdom. For a deeper dive, please read “Embattled Nation: Canada’s Wartime Election of 1917” by professors Patrice Dutil and David MacKenzie (Dundurn Press 2017).