Keeping independent information alive
It’s no secret that media organizations in Canada – as in many other countries – are in turmoil. A new report from a parliamentary committee argues that the stakes are bigger than the fate of one industry: a healthy democratic culture is also at risk.
The question for policy-makers is whether the crisis in media must simply be left to run its course, regardless of the consequences for the flow of public information and the traditional watchdog role of the press. Or whether government has any useful role to play in easing the transition to the new age of digital media.
The majority of MPs on the House of Commons heritage committee (leaving aside the Conservative members) came up with their answer on Thursday. They set out a series of constructive measures that Ottawa could take to ensure the public interest is not swept aside by the upheaval shaking the news media.
That upheaval is driven by powerful forces of technology and demographics, leading the Conservatives on the committee to argue that there is nothing to be done. They issued a minority report claiming that the rest of the committee just wants to “turn back the clock” to what they derided as “the ‘good ole days’ of TV news and newspapers.”
In fact, the key recommendations of the committee’s Liberal and NDP members are hardly driven by nostalgia. They come out of a concern that free, independent information, especially in local communities, is withering away as the financial model that supported it breaks down. There’s no evidence so far that standing back and letting it collapse entirely will do anything but damage democratic culture even more.
Some of the key measures proposed by the heritage committee would simply level the playing field for Canadian news organizations. At present, perversely, foreignowned news aggregators like Google and Facebook that profit from Canadian content don’t face the same tax burdens as Canadian organizations. Yet at the moment the aggregators are scooping up two-thirds or more of online advertising dollars in Canada.
The committee suggests they should be “subject to the same tax obligations as Canadian providers,” which would direct more advertising dollars to home-grown operations. No government money would be involved.
Similarly, the committee suggests that the Income Tax Act be amended so that Canadian companies could not claim tax deductions for advertising on foreign-owned websites. Such a law has long been in place for print outlets, so including digital would not be a dramatic change.
A report earlier this year by the independent Public Policy Forum estimated that such a move could shift $300– to $400–million in digital revenue to Canadian media outfits, whether “mainstream” or new startups. It’s a common-sense step the government should take.
The committee also proposes a tax credit to compensate print media companies for part of their investment in digital media. This would be more controversial, since it involves giving up tax dollars, but it would be well worth a five-year transitional experiment, as the MPs suggest.
The heritage committee has a host of other proposals, including ending advertising on the CBC’s online sites and expanding the current five-per-cent fee on cable and satellite TV services to include broadband. The extra money would go to a fund to support development of Canadian media, but the government quickly poured cold water on that idea.
The government should study all these suggested measures seriously. It may be reluctant to get involved in such a controversial area, but it should weigh the cost of action against the damage caused to a functioning, healthy democracy when independent news sources fall silent.