Goodbye, Canadian news. We hardly knew ye.

Government intervention seems to have killed Canadian journalism. And, the timing of the Postmedia-Nordstar merger talks stinks to high heaven.

June 27, 2023 may well be remembered as the day the toilet finally finished flushing on the traditional model for Canadian news media - a fact that doesn't bode well for our country. Despite protestations to the contrary, a robust and independent corps of journalist is needed to keep Canada healthy.

But the current sad state of affairs is a masterclass in matching the value of political opaqueness with sacrificing a public good in favour of shareholder returns. It's also the product of growth by acquisition strategies used by companies that produce something that doesn't scale when agglomerated (the production of diverse news content), as well as a general disregard for public interest by lawmakers and corporate executives alike. And it all looks pretty contrived.

Here's why.

Following less than a week after the passage of controversial bill C-18, which would require web giants like Facebook (Meta) and Google to pay a link tax to Canadian media outlets they already give free advertising to, a game of chicken between the federal Liberal government and both companies came to an end. Meta and Google announced that they would follow through with threats to block links instead of paying the tax, with Meta firmly stating that they would not be negotiating with the federal government on the matter as long as C-18 remained in force in its current form.

Functionally, this means that the more than $230 million worth of free advertising Canadian news media sites received (from Meta alone) by having their content displayed to these platform's massive user base would come to an end, thus simultaneously dealing with a significant financial blow to both large existing media sites and potentially killing emergent new sites that could grow to challenge legacy outlets in their infancy.

Then came the two more death blows for Canadian independent journalism. Yesterday, reeling from Meta and Google's firm refusal not to blink, rather than announcing the logical step that the government would rethink bill C-18 in the fall, embattled Canadian Heritage Minister Pablo Rodriguez doubled down in crazy town and announced that the government would take an even more active role in Canadian newsrooms affected by the link bans. Rodriguez's announcement was followed by two of Canada's largest print media companies, Postmedia and Nordstar, announcing they were in merger talks.

Industry observers were rightly alarmed. Rodriguez's detail-free announcement gave room to suggest that the Liberal government would go far beyond the substantive government subsidization that Prime Minister Justin Trudeau's Liberals have already controversially provided to these players, and imbed the government even deeper into their operations. The result could be further erosion of what nominal semblance of independence from the government these news outlets currently have. 

Further, Postmedia and Nordstar have likely been eyeing a merger for some time, and the aftermath of C-18 provided the perfect communications cover to dilute government and public scrutiny on a deal that gives sketchy vibes like that of the fictional Royco-Gojo merger on HBO's Succession. 

There’s no indication that a Postmedia-Nordstar merger would see more journalists hired or more newsrooms opened, and there’s no indication the government would intervene to ensure that. The opposite will most likely be true - executives will probably want to cut “redundant” costs in post-merger operations. Postmedia and Nordstar’s joint statement on the matter admits as much, by using cheerful euphemisms like “economies of scale”. But the problem with journalistic content in this context is that it is intrinsically resistant to this corporate strategy. For example, while this potential merger could allow more generic content to be shared across a combined subscriber base at less cost (read, the employment of less content producers), it more likely means less diverse content if operations are streamlined and content producers are cut. In that, the recent layoffs and radio station closures at Bell Media offer a glimpse into what post-merger operations at the potential PostmediaNordstarStateSubsidizedOmnicorp could look like. 

Looking at the potential merger through that lens, the timing of Rodriguez’s bozo eruption was suspect. What better day to announce talks about a merger to potentially skeptical shareholders than the day when the government expressed its willingness to do whatever it takes to keep both companies alive? And, what better justification to a potentially skeptical public for achieving economies of scale through a sketchy sounding merger than big bad web giants taking away free advertising? 

The whole thing stinks to high heaven.

The reality is that federal Liberals have not done anything that has grown the country’s capacity for actual journalism. The opposite is true. Canada's journalism is far weaker than ever today than under any other government. For all the subsidies and interventions the Liberals have put in place since coming to power in 2015, thousands of journalists' jobs have been lost as dozens of newsrooms have been shuttered. So dire is the state of journalism in Canada today that virtually no regional newsrooms exist, even in big urban centres outside of Toronto, never mind talking about the desert of coverage in Canada's rural and remote communities. What does exist is mainly dependent on government subsidies to survive. 

The federal Liberal government is probably thrilled about this new reality. They benefit from a lack of journalistic capacity to scrutinize their operations. They also benefit from outlets that have survived but are now dependent on subsidies having little corporate incentive to bite the hand that feeds them. That the Liberals will have arrived at this arrangement while being plausibly able to blame it on Facebook and Google politically helps them too.

The Liberals also politically benefit from the fact that today's news content comes primarily from journalists who live and have spent most of their lives in the federal Liberal's seat of power - downtown Toronto and Ottawa. When this homogeneity in regional and cultural perspective combines with the lack of overall journalistic capacity, it means issues of national interest will be missed, and the government will not be held to account when it needs to be.

Also thrilled will be the corporate executives and shareholders of companies like Postmedia and Nordstar. Having failed to adapt their business models to the disappearance of print media advertising, the Liberal government has helped to pay their bonuses while watching the death of the production of something that has an intrinsic value to the entire country - actual journalistic content.

Bill C-18 and its resulting news bans also prevent emergent competitors that have more nimble models (e.g., CANADALAND, The Western Standard) will wither on the vine without a significant amount of creativity. 

All that said, the biggest loser in this scenario is you, dear reader. Like the investigative type that blew the lid off the foreign interference scandal, journalism makes our country stronger. If you care about this issue, remember to make it an issue the next time you visit the ballot box - that is, if there's anyone left to report on a federal election.