Edward Greenspon is president and chief executive officer of the Public Policy Forum in Ottawa. He is a former editor-in-chief of The Globe and Mail.
Here's what Canadians think about the news media.
Eight in 10 say they follow the news. Often they do so on Facebook, but when something they consider really important is happening, they turn to established media. Regardless of age, they trust newspaper and television organizations far more than social media. In fact, Canadians hold journalists in high esteem, viewing them as indispensable guardians of democracy, protectors of rights and watchdogs over corruption. Their reverence is such they can't imagine government propping up the news media. For them, it would undermine the very purpose of journalism.
We can draw this often conflicted picture of Canadian attitudes from six focus groups and a comprehensive survey of 1,500 people conducted by veteran pollster Allan Gregg for the Public Policy Forum's new study, The Shattered Mirror: News, Democracy and Trust in the Digital Age.
And this is the political context in which governments will make decisions about whether and how to address the continuing and accelerating degradation of the news business. Things aren't just getting worse; they're getting worse faster.
There are certain policy options that are beyond the pale for Canadians, such as getting rid of foreign-ownership restrictions. There are other options that would prove quite popular, such as levying fees on Facebook and Google to finance news. There are measures that are no-brainers: why are foreign companies spared sales tax on advertising and subscription sales that Canadian competitors pay; and why are 19th-century charity laws allowed to hinder philanthropic foundations from supporting journalism?
At last, a much-needed debate is breaking out in Canada about the threat to democracy of the ever-weakening state of the news media. Even before the recent U.S. presidential election, Canadian governments were concerned about the weakened ability of the news media to inform the public about their democracy. The subsequent controversies about filter bubbles and fake news have added a layer of anxiety that fabricated news, which is cheap to produce, will chase out fact-based news.
Advocates of an unfettered press will rightly be concerned that the case for more journalists working their beats, especially hard-hit local and regional issues and institutions – from the courts to city halls, school boards and even provincial legislatures – cannot be relieved of their agony without the state doing business in the newsrooms of the nation.
The Shattered Mirror offers up crafted policies designed to avoid the trap of such binary choices and stop the carnage (to use the word of the week) witnessed again this week with yet more layoffs at Postmedia newspapers. We estimate from union data that something in the order of one-third of journalism jobs have been lost in the last six years.
When the final numbers are in for 2016, daily newspapers will have recorded four consecutive years of double-digit declines to their ad revenues. Circulation revenue is also falling. This deepening downward spiral has now spread to community newspapers to conventional television news, particularly local.
Digital ad revenues, once the great hope for salvation, are stuck at the same levels as 10 years ago and fewer than 10 per cent of Canadians say they are willing to pay for online news. In a recent three-month sampling, 82.4 per cent of the digital ads in Canada were served up by just two companies, Facebook and Google, according to comScore Inc.
Since 2010, about 225 weeklies and 25 dailies have closed or merged, touching more than 200 federal ridings. Those communities are losing a public good in keeping with libraries and safe streets and clean water. Until a public outcry, the Saskatchewan legislature was without a full-time reporter working its corridors for a period last year. Without intervention, it will inevitably happen again.
New digital-only operators, while adding spark to the media ecosystem, lack the scale in Canada to fill these emerging democratic deficits. The big platform companies employ no journalists and decry that they should not even be considered publishers. It is the traditional news companies that still provide the lion's share of original reporting, though we have taken care to craft our policies so they won't lock in a privileged status quo and stifle innovation. That would be bad policy. For all its recent failings, the Internet has been a powerful agent of democratization in conferring voice beyond the gatekeepers of old to a more diverse crowd of bloggers, commentators, subject-matter specialists and even movements such as #blacklivesmatter.
Still, fewer reporters and more platforms means less time hunting and gathering news and more time processing what we already know. While fake news takes just moments to make up, real news often requires days, weeks and even months of digging and verifying.
In light of these challenges, The Shattered Mirror calls for the modernization of Section 19 of the Income Tax Act, which has existed since 1965 and creates a tax advantage for advertising in Canadian newspapers, magazines and broadcast outlets over foreign ones. We say extend Section 19 to the Internet, and collect a 10-per-cent levy from companies that sell digital ads in Canada but neither pay taxes here nor support journalism. This should generate a revenue stream of $300 to $400-million.
The money would go to an arm's-length Future of Journalism & Democracy Fund, with a governance structure more independent of government than even the academic granting councils. The fund, in turn, would support civic-based journalism and digital news innovation and finance a series of initiatives, including the extension of Canadian Press into local news and an indigenous news initiative under the auspices of the Aboriginal Peoples Television Network.
An independent fund supported by a dedicated stream of revenue seems to us a superior policy option than tax credits, which tend to go equally to those companies that actually have a plan for the future and a commitment to serious journalism and those that don't and also tend to exclude startups and non-profits.
Tax credits also have a history of growing out of control – and means governments are continuously making the kinds of adjustments that could give them sway over the news industry. Some say simply set tax credits for a five-year transition period. But the future is hard to predict and nobody knows with any confidence whether the problems weakening our democracy will have been resolved.
You can't get far in a discussion of news these days without attention to rivers of falsehoods and hate polluting the media ecosystem. We urge caution in not overreacting to these provocations. Separating fact from fiction is the job of electors, not the elected, though publishers – and that includes search and social firms – must take responsibility, too.
The CBC needs to be part of the solution, as it has always been when Canada's news system is at risk. We join in the call for CBC to get out of digital advertising, not because of the dubious proposition that these revenues would flow to newspapers, but because their pursuit creates a distraction to CBC's core mission of serious journalism. We also recommend the public broadcaster begin becoming a digital-age public news service by moving to open its content to other participants in the Canadian media ecosystem. CBC already regularly posts its journalism to Facebook and YouTube. Next, it should adopt a Creative Commons licence to promote the widest dissemination of this publicly-funded and reliable journalistic source.
The mirror in which Canadian citizens see themselves, their communities and their public institutions has been shattered by the technologically-induced decimation of news media revenues and fragmentation of audiences. Our greatest hope is The Shattered Mirror will stimulate a necessary debate and ultimately necessary actions.