Government Decides to Finger Point Their Way Out of Their Policy Blunder

The government and the opposition have taken to pointing fingers at each other with the massive Bell layoffs. Maybe no strings attached money isn’t the answer?

Ripple effects are continuing to be felt in the wake of the obvious failures of Bill C-11 (Online Streaming Act) and Bill C-18 (Online News Act). For years, the media companies have been telling government that if they just gave them free money, that the impending layoffs in the media sector won’t happen and the government could somehow miraculously “save” journalism. What’s more, they told the government that anyone who says otherwise or are simply critical of both bills are little but “Big Tech shills”. These defamatory comments were additionally laced with lies that the platforms depend entirely on news content and dropping news links was just a “bluff”.

For the lobbyists pushing these lies, their campaign of gaslighting succeeded. Experts were demonized by the government – even to the extreme where MPs called for “investigations” into anyone daring to criticize the approach sponsored by the media lobbyists. In doing so, the government cast aside any suggestion that they are about evidence based governance, replacing it with lawmaking for whoever is the highest bidder – an approach harking back to the Martin and Chretien days.

Now, we are seeing another case of history repeating itself. Having long abandoned evidence based governance, the government is witnessing the very scenario critics have long warned about. Meta dropped news links in response to the Online News Act. Faced with an impending similar decision to Google, and knowing that the damage would be even more severe, the government wound up surrendered to Google, handing everything to them and calling it a “deal”. The deal resulted in the originally asked for fund model of $100 million in exchange for sparing the entire news sector from total financial annihilation.

With only getting a mere fraction of what the government was hoping to get out of the deal, a number of eyes turned to the Online Streaming Act. That new law is facing a myriad of problems as well. Between the fact that it is going to be years before it take effect and a number of streaming platforms openly considering leaving Canada altogether, the situation is looking equally disastrous.

With the lobbyist controlled legislative agenda facing total collapse, the Canadian government ultimately used its only tool in left in the tool chest. They opted to issue massive media bailouts to hopefully make up the difference. As it turns out, the government did so thinking that if they just shovelled a truckload of money to the media sector, they would magically save the journalism jobs the large media companies were threatening to axe.

The problem in all of this was that the media had every intention of axing those jobs, money or no money. After the media companies got what they could out of this legislative wreckage, the pink slips started flowing. The CBC slashed 10% of their workforce. In retrospect, the lack of any real response from the government is kind of surprising. This is because this was followed up with Bell slashing 9% of its workforce, selling off nearly half of their radio stations and axing flagship programs such as W5 and CTV News at Noon in many regions. The decision laid bare that these cuts were going to happen regardless of the outcomes of the Online News Act and Online Streaming Act.

While hindsight is always 20/20, the warning signs that this was always going to happen were there all along. NewsCorp Australia, in response to becoming the biggest beneficiary of the Australian link tax, slashed 1,250 jobs. What’s more, calls to tie financial assistance to actual news production fell on deaf ears, much to the delight of the large media companies. Critics including myself also long warned that the two bills were not going to “save” journalism positions. In short, the warning signs leading up to today were all ignored. As they say, those who ignore history are doomed to repeat it – and that’s exactly what happened here.

When news of the mass Bell layoffs hit, the government responded with anger. They seemingly naively believed that if they shoved money towards these legacy companies, that those journalism jobs would somehow be “saved”. With the shoe dropping, Heritage Minister, Pascale St-Onge, accused Bell of not holding up their end of the bargain. This despite the fact that the government did all of this without attaching conditions in the first place. Prime Minister, Justin Trudeau, furiously called Bell’s decision a “garbage decision”, saying that he was “pissed off” with what happened.

For a brief moment, I had hoped that the Canadian government had finally learned their lesson in this whole sorry affair. The media companies betrayed the government and the government realized that they had been completely hoodwinked by the legacy media players.

As you can imagine, the collapse of the situation has given massive cannon-fodder for the political opposition. NDP lawmakers on multiple government levels suggested that maybe the government should’ve put strings attached to the financial aid after all. Conservative Leader, Pierre Poilivre, said, “If you are so pissed off at bell for their layoffs, why don’t you demand Bell give back the government handout you gave them to save media jobs?”

Chances are, the comments were made in the context of the Conservatives long running campaign to completely defund journalism altogether. Ironically, however, taking back the funding that was supposedly going to save journalism positions at Bell isn’t actually that bad of an idea. In fact, this is probably the first inadvertently coherent idea to come from the Conservative leader. Bell said that if they just got that extra funding, then journalism positions would be saved. Bell got the money and those journalism positions were axed anyway. Bell, loosely speaking, went back on their word, proving that they should never have gotten that money in the first place. Taking the money back from Bell is actually a reasonable move given the circumstances.

St-Onge decided that the best use of her time is to do a little finger pointing despite the fact that this is the mess they put themselves in:

Fact check: it was YOUR party who brought the amendment to eliminate $40M in fees for Bell at committee.

Liberals voted against it. This one is on you.

As you can see, your policies are bad for workers and for journalism. pic.twitter.com/j3jCXQi3Zh

— Pascale St-Onge (@PascaleStOnge_) February 9, 2024

Fact check: it was YOUR party who brought the amendment to eliminate $40M in fees for Bell at committee.

Liberals voted against it. This one is on you.

As you can see, your policies are bad for workers and for journalism.

Yeah, blaming the Conservatives for the situation is totally the best use of the Ministers time. Got it. Never mind the fact that this whole situation has transpired as a result of the government naively believing that shoving money towards these legacy companies in the first place was somehow automatically going to save journalism positions in the first place. This despite the evidence suggesting that these companies are pulling in profits in the first place.

University law professor, Michael Geist, also weighed in on this whole disaster, saying that the house of cards is collapsing:

While I have seen some suggest that Bill C-18 has nothing to do with radio station sales or layoffs, the government’s approach is inextricably linked to it. First, the government’s longstanding media approach has largely focused on print and digital news outlets, not broadcasters. For example, the labour journalism tax credit worth hundreds of millions of dollars excludes broadcasters. It is now worth nearly $30,000 per journalist, but broadcast journalists are not eligible. I think there are serious problems with this approach (not the least of which is the implications for press independence), but the government clearly made a bet that it could focus its attention on the traditional print sector with the expectation that hugely profitable companies such as Bell would continue to support their news divisions. Much like the mistaken bet that Facebook couldn’t live without Canadian news, the same may be true for parts of the broadcasting sector.

Second, the government promoted Bill C-18 as providing hundreds of millions to broadcasters for news. Indeed, the Parliamentary Budget Officer estimated that it would generate $329 million, with 75% of that money going to broadcasters. Given Bell’s position in the market, it stood to be one of the two largest recipients of those revenues (alongside the CBC), amounting to tens of millions per year. But as everyone knows, Bill C-18 ultimately only generated a fraction of what was promised, with a single $100 million payment from Google shared among all sectors. Once the administrative costs and lost Meta deals are taken into account, that number is closer to $75 million, some of which is a re-allocation of existing Google money.

For Bell, the revenues are even smaller, however, because the government then decided to cap the amount allocated from Bill C-18 to broadcasters at 30% or $30 million (the CBC picks up another 7%). In other words, broadcasters went from expecting a quarter billion dollars in annual payments from Bill C-18 to support news to just $37 million for the entire television and radio broadcast sector. Further, those radio stations that do not produce news content to made available online aren’t eligible for anything and everyone has lost traffic and the resulting ad revenue due to the removal of links on Meta. To suggest that this had no impact on Bell’s media decisions this week is to engage in the same policy fantasies of the past few years that have cost hundreds of millions of dollars and placed the independence of Canadian media at risk.

In all, this is just one massively large clusterf*ck of a situation. It has left the Canadian government to basically continue to improvise their way out of this. With the Minister rejecting the idea of clawing back the money they gave to Bell, it implies that they honestly think that shoving more money to these legacy players is somehow going to solve the situation unlike the first several attempts this was made. It’s extremely difficult to see how shovelling money to these legacy companies is going to make a difference here. You’re just handing money to shareholders, hedge fund billionaires, and CEO’s who are slashing these jobs in the first place. If anything, the government is contemplating the idea of rewarding these companies for lying to them and embarrassing them in the public like this. As a result, it inspires little hope that things are going to get fixed any time soon.

Drew Wilson on Twitter: @icecube85 and Facebook.