Transcript: Peter Menzies

My interview with the former CRTC vice chair and newspaper executive

Last week on Lean Out, we heard from Canadian journalist Jen Gerson. The response from listeners was overwhelming. You asked for more coverage of the collapse of our media, including, of course, controversial new legislation. Bill C-18 aims to save journalism in this country — but my guest on this week’s program argues that it has instead “accidentally pushed the news industry into the abyss.”

Peter Menzies is a former newspaper executive and a former vice chair of the CRTC, the Canadian Radio-television and Telecommunications Commission. He’s now a senior fellow at the Macdonald-Laurier Institute and a frequent commentator on the Canadian media.

This is an edited transcript for paid subscribers. You can listen to the interview for free here.

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TH: Peter, welcome to Lean Out.

PM: Thank you. It's a pleasure to join you.

TH: Really nice to have you on. The Canadian media is in crisis right now. We are doing a mini-series on Lean Out on this, and I wanted to get you on to hear some of your thoughts on this unfolding crisis. You are a former newspaper publisher, a former vice chair of the CRTC, and a regular commentator on the media in this country. We'll get to C-18 in a moment. But to start today, can you paint a picture for our listeners? Give us the broad strokes of the media collapse that we're witnessing.

PM: We're going through a period of great disruption. I think people have underestimated the size of this disruption. To me, it's analogous to the invention of the printing press. The World Wide Web has fundamentally changed how we communicate with each other, and things such as newspapers, which have been in place for a very long time — it's pretty much 250 years in Canada now — their business model has collapsed. And it didn't begin with Facebook or even with Google. It began with Craigslist and Kijiji. Did Facebook kill or Google kill the newspaper industry? No. It was the Internet that did, in that sense.

We haven't read a lot about that in our newspapers. There hasn't been a lot of tracking of that, because newspapers haven't been very good at reporting on their own dilemmas. Media generally don't do that. The broadcast media can go to the CRTC, and it's public there, what their concerns are, but newspapers have not wanted to make a big deal about the fact. It's like not wanting to tell anybody that you're sick; you consider it private. So, we haven't been able to watch this as the years have passed. Then, we had our own disruptions with the Canwest purchase of all the newspapers from Hollinger and then its collapse, and the formation of Postmedia outside of that. There's some pretty good evidence to suggest that that ownership structure is more interested in earning interest on the debt than in investing in the newspapers. Probably because most sensible people looked at newspapers even 15 years ago and said, "There is no future for this." So, here we are. Everybody rolled the dice on Bill C-18, hoping that that would be their salvation. That they would be resurrected somehow through that. It was an idea based on an unsupportable premise, and it is failing, and they're failing with it.

TH: Let's get into C-18. You wrote recently in The Hub an article titled “How the government accidentally pushed the news media into the abyss.” You wrote that “it is difficult to recall a more complete public sector failure than this.” We do have listeners outside of the country. Can you just set this up for us? What exactly is going on here? It's often referred to as a link tax. How accurate is that?

PM: I think it's very accurate. What's happened is the government has decided that it has agreed with newspapers and other news organizations, who were very late to the argument, that Facebook and Google should be compensating them for carrying links to their website and stories on that website. That's in the case of Facebook. In the case of Google, it's for linking through their search engine. We can debate the premise, that they actually should be or shouldn't be, but let's separate that for the moment and deal with the linkage.

The problem is once you put a price on a link, you kind of kill — this is the word that others have used, but the argument is that you're killing the Internet. The Internet is all about links. In 2011, the Supreme Court of Canada ruled that a link is just a link. It doesn't have an economic value. The content that you get once you make the linkage does. But this confused the issue entirely. The way Meta and Google were looking at it was all they could hear was the kaching, kaching, kaching of a cash register going, every time somebody posted a link. They have no control over how many links are posted. You could imagine somebody sitting in The Toronto Star’s offices posting one link after another.

That was a huge problem with the structure. The other part with it was even had they done that, they never put a cap on what the cost would be to the tech giants, as they call them, to Big Tech. When Meta and Google, no matter how much money you have, no rational business operator is ever going to agree to a scheme in which your costs are unlimited. You might have something in mind like, "Oh, this is not going to cost us any more than a billion. Or, “It's not going to cost us any more than 50 million." But you have to know. No executive in any company, even a mom-and-pop convenience store, is going to agree with a business deal, or comply with a law, that exposes them to unlimited expense. Particularly for these global companies, when, as our Heritage Minister, Pablo Rodriguez has said, the world is watching.

I want to say, "That's the problem, Pablo. The world is watching." Right? If you get 400 million out of these guys in Canada, which is a pretty active social media market, but nevertheless, it's less than 2% of the world's population. All of a sudden, 500 million in Canada becomes 6 or 7 billion in the U.S., becomes I don't know how many billion in India. All of a sudden, that $70 billion a year profit you are returning disappears. Shareholder value and all that. That's why executives exist — to protect shareholder value. And that's what they ended up doing.

TH: The government here has framed this as a real fight against Big Tech bullying. We saw our Prime Minister, Justin Trudeau, compare this to World War II. Pablo Rodriguez has begun to backpedal and back off. You recently penned a piece saying that this retreat is too late and maybe also too little. Let's talk about another aspect of the bill that doesn't get enough attention — which is that the bill will rely on the CRTC to determine which outlets are eligible for payments. Here's a line from a recent Global Mail editorial board op-ed on this, "Bluntly, C-18 opens the door for the CRTC to decide if newsrooms are abiding by its view of proper journalistic standards of conduct and penalize those who fail that test. Even the mere prospect of such intervention is a problem, not just for newsrooms but ultimately for all Canadians." Do you think the CRTC is equipped to make value judgments on what Canadian journalism is worthy and what is not?

PM: No. And I think that's almost through the CRTC’s own admission. The Broadcasting Act does give it the power, and C-18 does this as well, to be the final judge on what content is good and what isn't. The Broadcasting Act says that the system must be of good standard. Now, in order to avoid having to have these judgments made by the nine commissioners, who are cabinet appointees on the CRTC — and I was one of them once, I was one of them actually a couple times … What the CRTC did is it was approached by the broadcasting industry, who said, "How about we police ourselves? We'll come up with some broadcasting standards for conduct." They created a board called the Canadian Broadcast Standards Council. (CBC is the only one that doesn't belong to it, by the way. That's its way to assert its independence.) But it then governs complaints. It's like an old-fashioned press council, but its guidelines are approved by the CRTC. So, the CRTC does stay in charge of things, but in describing that, it's by its own admission that it doesn't feel qualified, like it has the internal expertise to do so. C-18 then insists that qualified news organizations must have a code of conduct, ethics practices, and principles, which the CRTC is comfortable with. So, The Globe and Mail is dead right.

But if this is a commercial transaction, as C-18 alleges, if this is really just about letting newspapers negotiate a fair deal with web giants — and I have some sympathy for the publishers in terms of the market imbalance, in terms of negotiation power. Absolutely, that's a genuine point. But if that's what this is about, and these guys should be getting more money from Big Tech, they can spend it however they want. It's nobody's business how they spend it. They can spend it on new paint if they want. They can spend it on new furniture, a lounge in the cafeteria. Whether they spend it on journalism or not is none of anybody's business. The fact is that the CRTC is put in charge of The Globe and Mail's values and standards, and practices, and how many BIPOC employees it has … I mean, the CBC has tried to do that headcount itself and met great resistance from its employees. Getting into all that stuff, which is very much mandated through mandate letters through the Department of Heritage, is really — to use the technical term — creepy.

TH: Another issue here is the lobbying that has gone on from Big Media. I'll be speaking later this week to media historian Marc Edge for my weekend column. His latest book, The Postmedia Effect, talks about the origins of this lobbying to government for intervention from Big Media, dating back to 2016. What role do you think aggressive lobbying has played in the public policy solutions that government has wound up pursuing to try to remedy our declining media industry?

PM: Well, all governments are prone to being overwhelmed by lobbyists. I've lived and worked in Ottawa, and you see it on a daily basis. People are all at the same parties, that sort of stuff. The casual interactions are there, plus there's the more formal interactions, the opportunities. The bigger your company is, the more lobbyists you can hire. Let me get this straight: People are perfectly entitled to lobby. What happens, though — and I really noticed this as a CRTC commissioner — is every time you get lobbied by a big guy, you better make sure you find out what the little guys are thinking. You get overwhelmed by News Media Canada, that walks in the door and claims that they represent everyone. Which just isn't true. They don't represent The Hub. They don't represent The Line. They don't represent The Narwhal. They don't represent all kinds of left, right, center, enviro platforms, all kinds of platforms. Little guys get left out.

TH: They don't represent Lean Out.

PM: No, they don't represent Lean Out. They go and they make their case, and the governments come up with this legislation that is essentially naïve. They don't understand the impact it will have. Or, somebody goes in and says, "Look, 450 newspapers have died in the last 20 years." Nobody shows up and says "Hey, hi, I'm one of 230 new online products that have started up." Nobody comes in and says, "Yes, the newspaper in Moose Jaw died four or five years ago. But it's okay, Moose Jaw still has four really good online news sources. Democracy hasn't died in Moose Jaw."

What's happening is there's a transition. Nobody accounts for the fact that every commercial radio station, virtually, in the country, launched a website. Some of them in small centres, in competition with the local newspaper. Nobody considers the fact that it might have been the radio station's website that killed the newspaper, along with social media. We have 700 new news websites in the country, all started by radio stations, at very little cost, because they already had a news staff.

That's what happens with lobbyists — is you only get a part of the story, and you end up building legislation built on only one person's story. That's why I've pushed in the last year, and we did our recent paper at Macdonald-Laurier Institute. We really need something like a national news industry policy that really understands what's going on. Some things are going to die, no question This is what happens. You can't go through a period of disruption like this without some platforms dying. Journalism doesn't have to die, though. It just needs to get a fresh horse.

TH: I want to get to some of the recommendations in that paper that you just referenced in a moment. But first, I want to just touch on a recent Angus Reid poll that found 59% of Canadians oppose government funding of private newsrooms, believing that it compromises journalistic independence. Holly Doan, who's been on this podcast, publisher of Blacklock's Reporter, has said she will not take government subsidies, and so has Jen Gerson, at The Line, also a Lean Out guest. Nor will I. You believe that it's crucial to avoid a direct funding connection between the government and newsmakers or news intermediators. Walk us through your thinking on that.

PM: It's really not about what I think, or what you think, or what publishers think, or what broadcasters think. It's about what the public thinks. And that poll really illustrates that. I've heard reporters say, "Hey, that's not going to compromise me. I'm still going to do my job," and I believe them.But other people don't. Right? No matter how much you say that. And I've had this discussion with more than a couple academics who were saying, "Come on. There's no way that government funding can influence newsrooms and that sort of stuff." I'm like, "I spent 30 years working in newsrooms. I'm sorry, I know how it works. It's not as pretty as people like to think it is. It's not as ugly as people might assume from a comment like that, but there is influence." Executives do keep an eye over their shoulder. You do casually self-censor. You move stories in a different direction. All of these things occur. They don't occur on a daily basis, and they don't occur in overt ways, but people aren't going to put the sustainability, again, the shareholder value and interests, at risk. They will try to do it in ways that don't corrupt a newsroom and that sort of stuff. But there's no question, again, that even if you are as pure as the driven snow, if the public even suspects that you might not be, it undermines your entire business platform.

TH: Another point on that Angus Reid poll that I just cited, 57% of Canadians say that the consolidation of our media should be discouraged to encourage competition. As you point out in your Macdonald-Laurier report, for instance, Postmedia effectively controls 90% of the nation's daily and weekly newspapers. You have argued strongly in favor of pluralism in media ownership. What impact does heavy consolidation have here?

PM: Well, in terms of the Postmedia ownership — and you could look at the Hollinger ownership before that, and even some of the Southam structures, some of this goes back to the Kent Commission in the 1980s when newspapers were simultaneously closed down and bought, and it became more consolidated. A lot of that has to do with foreign ownership restrictions. There've been some good arguments made on that, not just by myself but by others in the media industry. If you restrict the number of potential buyers for an entity, you're going to lower the price. If you lower the price, that makes it possible for people to buy more than one — two, three, four, five. And the next thing you know people say, "Wow, this is more efficient. My costs are way lower if I just centralize all this." All of a sudden, all your copy editors are working in Hamilton, deciding what headlines go in the Edmonton Journal or the Saskatoon Star Phoenix. People who have never been to Edmonton or Saskatoon are copy-editing the stories. And it doesn't work, basically. It saves money, it's cost-efficient. But Canada's an incredibly large country, and it's very diverse in its regions. I explained this to an Englishman once, when I was in at a meeting in Washington. He said, "Well, Calgary and Ottawa, how far is that apart?" I said, "Funny you should ask. I've looked it up." Actually, the distance between Calgary and Ottawa is about 180 kilometers further than the difference between London and Moscow. All of Europe can fit in between. That gives you the size. And the idea that people think a bunch of guys sitting in Toronto or Montreal, or it could be Winnipeg, or it could be Vancouver, deciding what people in Halifax and Edmonton and Baker Lake and Saskatoon should be reading, is absurd.

It just it downgrades the product to the point where today — Jen Gerson calls them zombie newspapers and she's not wrong. I read something the other day that said, "Imagine if Calgary, Edmonton, Regina, Saskatoon, Vancouver, were all to lose their daily newspapers simultaneously." I read it and thought, "They already have." The impact now would be … what? Once you depreciate an asset to a certain point, it's very hard to argue that it has a value that you need to retain. That's really our competition policies in Canada — they are very, very weak, and we create duopolies all over the place. We seem to think of it as some cultural identifier.

TH: Let's spend a few moments on where we go from here. You recently authored a national news media policy paper for Macdonald-Laurier, calling for this national news strategy and offering some recommendations. What do you see as the path to sustainability for Canadian media, in broad strokes? And then we'll drill down on a few of your recommendations.