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The government surrenders to reality with rewritten Online News Act—and pleases no one: Peter Menzies

Published

5 months ago

8 minute read

From the MacDonald Laurier Institute

By Peter Menzies

The shakedown of Meta and Google didn’t go as planned—but now they’re eyeing other lucrative targets.

There were some long faces in the news industry last week when Heritage Minister Pascale St-Onge rolled out the final terms of her surrender to reality.

Media executives who once campaigned for the Online News Act with sugar-plum visions of Big Tech cash dancing in their heads were left to deal with some pretty serious lumps of coal. After years of effort to procure what they once fancied would be hundreds of millions of dollars annually from web giants, all St-Onge could bring down the chimney was a bump up in Google’s spend to $100 million.

How much the mother of all search engines was already paying to publishers is unknown, but in-the-know estimates tend to range from $30-$50 million. Splitting the difference at $40 million would mean the industry—newspapers, broadcasters, and online platforms—wound up with $60 million in fresh cash, give or take.

That’s less than the Lotto Max jackpot Rhonda Malesku of Kamloops and Ruth Bowes of Edmonton shared last summer. A lot of money for Rhonda and Ruth for sure, but for an entire industry it’s a drop in a leaky bucket.

Then there’s the fact the Act resulted in Meta blocking all news links in Canada on Facebook and Instagram. Again, the exact cost is unknown but the social media company had been spending $18 million on journalism supports plus—and here is the killer—Meta estimated it had been sending $230 million a year worth of referrals to news websites.

Even if Meta is only half right, that still leaves the news industry many tens of millions of dollars worse off. If Meta’s estimate is accurate—and no one has really debunked it—the scenario is a lot uglier.

This is what happens when you make things up.

The Act was rooted in the make-believe premise that “web giants” were profiting from “stealing” news. Legislation was designed on that basis to force Big Tech to “negotiate” commercial deals and share those profits with all news organizations.

In the end, as Michael Geist has detailed, that charade of “compensation” was dropped as the government, desperately afraid Google would follow Meta’s lead, posted regulations that essentially rewrote the Act to suit the search engine and, as an aside, puzzle lawyers. All that the media were able to salvage from the hustle was a fund they wound up fighting over like street urchins in a soup kitchen.

Here, St-Onge actually did something sensible. Her original plan was to have the fund distributed solely on a per journo basis. In other words, if there are 10,000 journalists, $100 million would turn into $10,000 per journo, never mind whether they are paid $35,000 or $150,000. The problem with that is that one in three Canadian reporters works for CBC, which is not in mortal peril. The next highest is Bell Media, whose parent company made $10 billion last year. Meanwhile, the Toronto Star is hemorrhaging at a rate of $1 million a week, small centres are becoming news deserts, and Postmedia’s stable of zombie newspapers continues to, well, zombie on.

Broadcasters would have consumed 75 percent of the loot and the vast majority of the cash would wind up with companies for whom news is not a primary aspect of their operations.

St-Onge changed that to cap private broadcasters’ windfall at 30 percent, with CBC limited to 7 percent.

That means 63 percent of the money will go to operators in the greatest peril which, for a fund resulting from a need to address industrial poverty, is at least rational.

Still, there was grumbling.

“Well, this is disappointing—sure wasn’t expecting a cap on broadcasters’ access to compensation,” Tandy Yull, vice president of policy and regulatory affairs for the Canadian Association of Broadcasters, posted on LinkedIn.

“Hey, Universe! More needs to be done to support Canadians’ most important providers of news, local radio, and television stations, who are facing significant—even existential—declines in advertising revenue,” she added.

Yull went on to stake broadcasters’ claim to government assistance currently reserved for newspapers and online-only media: the Journalism Labour Tax Credit and the Local Journalism Initiative.

And of course “our democracy demands that we explore these and other options—soon.”

She may not have long to wait.

Broadcasters opened up a fresh lobbying for loot campaign just last month when the Canadian Radio-television and Telecommunications Commission (CRTC) held a hearing to launch the implementation of the Online Streaming Act.

Supposedly about funding Canadian entertainment programming, the concept of a news fund was introduced early and repeated often.

Commissioners appeared happy to embrace well-worn lines about a news “crisis” that needs  “urgent” attention to prevent—cue the tympany—the death of democracy. And they did so without needing to be persuaded there was any rational reason for creating a fund which, logically, makes no more sense than taxing cinemas to pay for newspapers. Nor were any concerns raised about impacts on entrepreneurship and online innovators.

“Local news is in crisis and requires immediate intervention,” Susan Wheeler of Rogers, which made $7.12 billion last year, told the panel.

“A fundamental outcome of the modernized contribution regime must include new mechanisms to provide long‑term financial support for high‑quality Canadian‑produced broadcast news from credible outlets,” she said, calling for 30 percent of money raised from foreign online streaming companies to be directed to a news fund “accessible by all private TV and radio stations producing news.”

The humiliating squabbling over the remnant scraps of the Online News Act clearly wasn’t the end of the Great Canadian Quest for other people’s money.

So maybe the shakedown of Meta and Google didn’t quite work out. But Spotify, Disney+, and Netflix? They have money. Let’s mug them instead.

It’s not like anything bad could happen. Right?

Peter Menzies is a Senior Fellow with the Macdonald-Laurier Institute, a former newspaper executive, and past vice chair of the CRTC.

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Business

When politicians gamble, taxpayers lose

Published on May 2, 2024

By

From the Canadian Taxpayers Federation

Author: Jay Goldberg

Trudeau and Ford bragged about how a $5 billion giveaway to Honda is going to generate 1,000 jobs. In case you’re thinking of doing the math, that’s $5 million per job.

Politicians are rolling the dice on the electric vehicle industry with your money.

If they bet wrong, and there’s a good chance they have, hardworking Canadians will be left holding the bag.

Prime Minister Justin Trudeau and Premier Doug Ford announced a $5-billion agreement with Honda, giving another Fortune 500 automaker a huge wad of taxpayer cash.

Then Trudeau released a video on social media bragging about “betting big” on the electric vehicle industry in Canada. The “betting” part of Trudeau’s statement tells you everything you need to know about why this is a big mistake.

Governments should never “bet” with taxpayer money. That’s the reality of corporate welfare: when governments give taxpayer money to corporations with few strings attached, everyday Canadians are left hoping and praying that politicians put the chips on the right numbers.

And these are huge bets.

When Trudeau and Ford announced this latest giveaway to Honda, the amount of taxpayer cash promised to the electric vehicle sector reached $57 billion. That’s more than the federal government plans to spend on health care this year.

Governments should never gamble with taxpayer money and there are at least three key reasons why this Honda deal is a mistake.

First, governments haven’t even proven themselves capable of tracking how many jobs are created through their corporate welfare schemes.

Trudeau and Ford bragged about how a $5 billion giveaway to Honda is going to generate 1,000 jobs. In case you’re thinking of doing the math, that’s $5 million per job.

Five million dollars per job is already outrageous. But some recent reporting from the Globe and Mail shows why corporate welfare in general is a terrible idea.

The feds don’t even have a proper mechanism for verifying if jobs are actually created after handing corporations buckets of taxpayer cash. So, while 1,000 jobs are promised through the Honda deal, the government isn’t capable of confirming whether those measly 1,000 jobs will materialize.

Second, betting on the electric vehicle industry comes with risk.

Trudeau and Ford gave the Ford Motor Company nearly $600 million to retool a plant in Oakville to build electric cars instead of gasoline powered ones back in 2020. But just weeks ago, Ford announced plans to delay the conversion for another three years, citing slumping electric vehicle sales.

Look into Ford’s quarterly reports and the danger of betting on electric vehicles becomes clear as day: Ford’s EV branch lost $1.3 billion in the first quarter of 2024. Reports also show Ford lost $130,000 on every electric vehicle sold.

The decline of electric vehicle demand isn’t limited to Ford. In the United States, electric vehicle sales fell by 7.3 per cent between the last quarter of 2023 and the first quarter of 2024.

Even Tesla’s sales were down 13 per cent in the first quarter of this year compared to the first quarter of 2023.

A Bloomberg headline from early April read “Tesla’s sales miss by the most ever in brutal blow for EVs.”

There’s certainly a risk in betting on electric vehicles right now.

Third, there’s the question of opportunity cost. Imagine what else our governments could be doing with $57 billion?

For about the same amount of money, the federal government could suspend the federal sales tax for an entire year. The feds could also use $57 billion to double health-care spending or build 57 new hospitals.

The solution for creating jobs isn’t to hand a select few companies buckets of cash just to lure them to Canada. Politicians should be focusing on creating the right environment for any company, large or small, to grow without a government handout.

To do that, Canada must be more competitive with lower business taxes, less red tape and more affordable energy. That’s a real recipe for success that doesn’t involve gambling with taxpayer cash.

It’s time for our politicians to kick their corporate welfare addiction. Until they do, Canadians will be left paying the price.

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Business

WEF panelist suggests COVID response accustomed people to the idea of CBDCs

Published on May 1, 2024

By

Central Bank of Bahrain governor Khalid Humaidan

From LifeSiteNews

By Tim Hinchliffe

When asked how he would convince people that CBDCs would be a trusted medium of exchange, Bahrain’s central bank governor said that COVID made the digital transformation ‘something of a requirement’ that had ‘very little resistance.’

Central bank digital currencies (CBDCs) will hopefully replace physical cash and become fully digital, a central banker tells the World Economic Forum (WEF).

Speaking at the WEF Special Meeting on Global Collaboration, Growth and Energy Development on Sunday, Central Bank of Bahrain governor Khalid Humaidan told the panel “Open Forum: The Digital Currencies’ Opportunity in the Middle East” that one of the goals of CBDC was to replace cash, at least in Bahrain, and to go “one hundred percent digital.”

Humaidan likened physical cash to being an antiquated “analogue” technology and that CBDC was the digital solution that would hopefully replace cash:

“I thank this panel and this opportunity. It forced me to refine my thoughts and opinions where I’m at a place comfortably now that I’m ready to verbalize what I think about CBDC,” said Humaidan.

If we think cash is the analogue and digital currency is the form of digital – CBDC is the digital form of cash – today, clearly we’re in a hybrid situation; we’re using both.

We know in the past when it comes to cash, central bankers were very much in control with all aspects of cash, and now we’re comfortable to the point where the private sector plays a big role in the printing of the cash, in the distribution of the cash, and with the private sector we use interest rates to manage the supply of cash.

The same thing is likely to happen with CBDC. Yes, the central bank will have a role, but at some point in time – the same way we don’t call it ‘central bank cash’ – we’re probably going to stop calling it central bank digital currency.

“It’s going to be a digital form of the cash, and at some point in time hopefully we will be able to be one hundred percent digital,” he added.

When asked how he would convince people that CBDC would be a trusted medium of exchange, Bahrain’s central bank governor said that people were already used to it and that COVID made the digital transformation “necessary” and “something of a requirement” that had “very little resistance.”

“Right now, many of our payments are digital. The truth is, I said that we’re in a hybrid model; there’s less and less use of cash,” said Humaidan.

I think from predominantly digital with a little physical, I think the transition to fully digital is not going to be a stretch.

People are used to it, people have engaged in it and certain circumstances did help. Its adoption rates increased because of COVID.

“This is where contactless started to become something of a necessity, something of safety, something of a requirement, and because of that there is very little resistance; trust is already there,” he added.

Meanwhile, European Central Bank president Christine Lagarde has been going around the world telling people that the digital euro CBDC would not eliminate cash, and that cash would always be an option.

Speaking at the Bank for International Settlements (BIS) Innovation Summit in March 2023, Lagarde said that a digital currency will never be as anonymous as cash, and for that reason, cash will always be around.

“Is it [digital euro] going to be as private as cash? No,” she said.

A digital currency will never be as anonymous and as protecting of privacy in many respects as cash, which is why cash will always be around.

If people want to use cash in some countries or in some transactions, cash should be available.

“A digital currency is an alternative, is another means of payment and will not provide exactly the same level of privacy and anonymity as cash, but will be pretty close in terms of complete neutrality in relation to the data,” she added.

A WEF Agenda blog post from September, 2017, lists the “gradual obsolescence of paper currency” as being “characteristic of a well-designed CBDC.”

Last year at the WEF’s 14th Annual Meeting of the New Champions, aka “Summer Davos,” in Tianjing, China, Cornell University professor Eswar Prasad said that “we are at the cusp of physical currency essentially disappearing,” and that programmable CBDCs could take us to either a better or much darker place.

“If you think about the benefits of digital money, there are huge potential gains,” said Prasad, adding, “It’s not just about digital forms of digital currency; you can have programmability – units of central bank currency with expiry dates.

You could have […] a potentially better – or some people might say a darker world – where the government decides that units of central bank money can be used to purchase some things, but not other things that it deems less desirable like say ammunition, or drugs, or pornography, or something of the sort, and that is very powerful in terms of the use of a CBDC, and I think also extremely dangerous to central banks.

The WEF’s Special Meeting on Global Collaboration, Growth and Energy Development took place from April 27-29 in Riyadh, Saudi Arabia.

“Saudi Arabia’s absolute monarchy restricts almost all political rights and civil liberties,” according to D.C.-based NGO Freedom House.

In the kingdom, “No officials at the national level are elected,” and “the regime relies on pervasive surveillance, the criminalization of dissent, appeals to sectarianism and ethnicity, and public spending supported by oil revenues to maintain power.”

Reprinted with permission from The Sociable.

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