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Canada’s old media cling to power, profits like Putin

To those with control of the communication apparatus go the spoils

Canadian PoliticsMedia Canadian Business

After Shaw acquired Freedom Mobile in 2016, the company targeted Rogers, Bell and Telus, including in this 2019 ad campaign depicting the big three as ‘monolithic wireless.’ Photo courtesy Freedom Mobile.

Institutionalized corruption at a country’s highest levels inevitably allows its oligarchs to enrich themselves. This is as true in Canada as it is in Russia, where Vladimir Putin has held power since the millennium through a combination of powerful propaganda, rat-like cunning and a murderous bent, as opponents are often eliminated through poisoning or defenestration. Putin reportedly dares not relinquish power lest it be revealed the extent to which he and his cronies have plundered the Russian economy, with some estimates placing his personal wealth at north of $200 billion.

What has mostly enabled Putin to keep power, however, has been a well-oiled propaganda machine. Complete control of the country’s television broadcasting system enables the Kremlin to portray him as a hyper-masculine strong leader of the sort Russians apparently crave.

We are much too polite in Canada to go around pushing people out of windows, of course, much less poisoning them hideously, but the same principle applies. To those with control of the communication apparatus go the spoils. They achieve enrichment through their ability to literally invent reality. Putin portrays his invasion of Ukraine, for example, not as an act of war but as a “special military operation,” required to somehow stave off Nazis, which pushes a lot of buttons for most Russians.

What the biggest media in this country would like us to believe is that they are barely hanging on financially and need government assistance just to stay afloat lest Canada be overwhelmed by American culture. It’s a view epitomized in the 2019 book The Tangled Garden by former CBC English head Richard Stursberg, who is now a media consultant of the type that proliferates in Ottawa. “If the federal government does not wake from its torpor, the major Canadian media companies are likely to collapse,” he warned. “If this happens, English Canada will be effectively annexed by the United States.” The Tangled Garden, which has proved a veritable playbook for special pleadings by Canada’s media, claims that they have suffered “losses as far as the eye can see” due to declining ad sales. Their financial failure would bring about “the utter collapse of Canadian culture,” leaving us with the “arid and lifeless landscape of an abandoned culture.” This sort of nationalist rhetoric pushes a lot of buttons for Canadians, something our propagandists understand well.

Nothing could be farther from the truth, however, as Bell Canada makes profits of more than $10 billion a year, which is more than the GDP of many entire countries, at obscene profit margins exceeding 40 percent. Rogers, which made a profit of $6.4 billion last year, will be almost as big as Bell with its recent takeover of Shaw, which made $2.5 billion in 2022 at a profit margin of 46.3 percent. They make most of their money by gouging us mercilessly for telecom services such as cable TV, cell phone coverage and Internet access, for which Canadians pay among the highest rates in the world.

They also own TV networks, which are great for churning out propaganda but don’t make quite as much money as telecoms. They are still quite profitable, however. The CTV network is part of Bell’s media division, along with cable channels such as TSN, which made “only” $745 million in profit last year, up $20 million from the year before at a profit margin of 23.2 percent. That didn’t stop Bell from pleading poverty while killing a half-dozen local radio stations to cut costs last month (including my presets one and two), closing CTV’s bureaus in London and Los Angeles, and laying off 1,300 more workers, or six percent of its media division.

That’s just the beginning, however, as Bell now wants Ottawa to permanently insure its profitability against erosion by technological change, in part by eliminating all requirements to provide local news on its CTV stations. “Bell Media has been losing tens of millions alone in the production and delivery of local news,” it said in its application, ignoring the fact that news provision is the public service it provides in exchange for its otherwise lucrative broadcasting licences.

Bell also wants the government to reduce its required spending on Canadian content from 30 percent of revenues to 20 percent and to give it some of the tax dollars coming in from Bill C-11, the Online Streaming Act, because it has been losing viewers to online streaming services. The streamers avoided regulation in Canada for years, but they have now been brought to heel by Bill C-11 and will soon have to pay taxes and provide Canadian content like domestic broadcasters do, except that some may quit the country instead.

The same scenario is unfolding in news, where under Bill C-18, the Online News Act, Canada’s oligopolistic newspaper industry has persuaded Ottawa to order their adverting competitors Facebook and Google to pay them for news content they supposedly steal. Facebook has promised to drop Canadian news instead, and Google may do the same, which will devastate online news outlets.

This legislative binge and subsequent pleadings by Big Media to be released from their news obligations signal its last desperate attempt to cling to power and profit, just like Putin. It is symptomatic of a system subject to “regulatory capture,” or regulation not in the public interest but in the interest of the regulated. A well-known “revolving door” is all that separates the Canadian Radio-television and Telecommunications Commission regulator and industry giants like Bell, Telus and Rogers, which has resulted in what one study described as “lobbying from within.” Researchers have long documented how the CRTC is a captive of industry, with my small contribution showing how the “public benefits” payments it requires to approve a licence transfer have increasingly found their way into journalism schools, whose faculty thus also became captive.

Attempts to rein in the power of Big Media to charge us through the nose have always failed, sometimes comically. The independent Internet service provision TekSavvy tried for years to offer lower rates, but it recently gave up after the CRTC controversially reversed a 2021 decision to lower wholesale Internet rates.

Then there was the “skinny basic” fiasco in 2016, when the CRTC ordered the cablecos to offer a $25 option for TV viewers. They outsmarted the regulator by rigging the rates to make the service even more expensive than before. Bell wouldn’t even go along with the CRTC’s order that it stop blocking American commercials during the Super Bowl, which are eagerly awaited by those in the advertising industry but are routinely replaced with Canadian ads. It went all the way to the Supreme Court of Canada in 2019 to overturn the decision.

The parallels between Putin desperately clinging to power and Big Media in Canada continually prevailing upon Ottawa for ever greater favours are obvious and provide evidence that systemic corruption pervades the highest levels of government in both countries, to the detriment of their citizens.

Marc Edge is a journalism researcher and author who lives in Ladysmith, BC. His books and articles can be found online at www.marcedge.com.

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