John Lorinc is a Toronto-based journalist and editor.
On Aug. 27, 1980, residents of Winnipeg and Ottawa woke up to a piece of disturbing news. The Ottawa Journal and the Winnipeg Tribune, both 90-year-old papers, had shut down simultaneously in what was later understood to be an act of collusion between two of Canada’s largest newspaper chains, Thomson Newspapers and Southam Inc.
The federal government of the day, led by prime minister Pierre Trudeau, quickly launched an investigation under Canada’s former competition law. They established a royal commission on the state of Canada’s newspapers to be headed by veteran journalist Tom Kent. It was the second probe into corporate concentration in Canada in a decade.
The opening page of Mr. Kent’s 300-page report set the tone: “This Commission,” it begins, “was born out of shock and trauma.”
Over four decades later, the latest episode in the ongoing consolidation of Canada’s newspaper industry – a proposed merger/debt restructuring between Torstar, which owns the Toronto Star and dozens of smaller papers, and Postmedia, which owns broadsheets and tabloids across Canada – likely prompted trauma in some circles, but it certainly shouldn’t have come as a shock.
The Postmedia chain, which includes big city dailies like the Montreal Gazette and the Calgary Herald and is controlled by a U.S. hedge fund, has been bleeding money for years, prompting waves of layoffs. What’s more, the two chains aren’t exactly strangers: they swapped and closed numerous newspapers in 2017 in what seemed like a concerted operation, although the Competition Bureau didn’t pursue charges.
This deal, yet to be approved, seems precariously close to an end-state condition for Canadian newspapers, with two chains controlling almost all of the country’s English-language dailies.
Will Justin Trudeau’s government reprise the Kent Commission? Unlikely. But the government would do well to revisit its findings and reflect on what Kent et al. got right, and what they got wrong.
The Postmedia-Torstar deal has emerged in a volatile political context. The federal Liberals just passed legislation that will tax Google and Meta for including links to the Canadian journalism content they share on their sites. In the U.S. and the European Union, meanwhile, anti-trust regulators are stepping up their efforts to crack down on digital platforms’ anti-competitive behaviours. Meanwhile, Canadian regulators are hampered by weak competition laws that have created oligopolies in sectors like airlines, groceries, telecommunications and, well, journalism.
Less than a decade after the Watergate scandal broke, Mr. Kent and the reporters who worked for his commission filled their final report with high-minded encomiums about the role of newspapers in democracy. But they were also attentive to the disruptive role of emerging technologies, including digitized news databases and something called “videotex” – a great-great-grandparent of online journalism. In fact, the report quoted experts who warned of the perils of cable and phone companies nosing their way into the print news business.
Mr. Kent also meticulously documented the ways in which newspaper chains seek out territorial monopolies and relentlessly pursue segmentation strategies within markets where they own multiple papers – e.g., Vancouver – to prevent profit-killing intramural competition.
That single-minded monopolistic focus, one could argue, blinded publishers to the existential threats posed by platforms like Google and sites like Kijiji, which rapidly separated news organizations from the torrent of lazy revenue that had flowed from classified ads for decades.
Though his report acknowledges the nascent technological environment that was bubbling around print, Mr. Kent’s ultimate recommendation – the passage of a “Canadian Newspaper Act” that would limit concentration, monitor press freedoms and offer subsidies for publishers who spent more on their newsrooms – failed to recognize the implications of the digital revolution already in play. Like the news barons of the day, Mr. Kent didn’t look up. (Pierre Trudeau’s Liberals, more preoccupied with constitutional talks than newspapers, shelved the report.)
For Canadian policy makers, then, the contemporary lesson of the Kent Commission is to make sure they see the forest, and not just the trees. It’s not clear whether the current Trudeau government will try to block the Postmedia-Torstar merger, nor is it obvious whether the Competition Bureau, hobbled as it is with weak legislation, will be able to do much of anything.
What the government can do, however, is ensure that the answer to fewer outlets is not, well, fewer outlets. The really big story last week, as news of the Postmedia-Torstar deal leaked, was actually the announcement that Google was going to block Canadians’ access to Canadian journalism in response to the freshly passed Online News Act.
The shock and trauma, circa 2023, is that Liberal lawmakers, for all their rhetoric about journalism and democracy, didn’t see that one coming.