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Over the past few decades, changes to technology and the business models of news media companies have had a profound impact on the distribution of information in Canada. These changes have transformed news into an industry, no longer aimed at informing a population and helping them to engage with politics, but rather designed to capitalize on attention in order to generate maximum profit. This shift is reflected by the evolution of the news company Postmedia, which owns half of all Canadian newspapers. Postmedia is representative of the decline of hard-hitting local journalism in Canada, a decline that needs to be reversed to ensure that Canadians are able to engage with —and preserve— their democracy into the future.
Recent Changes in Canadian Journalism
At the turn of the millennium, many print newspapers—adjusting to the challenge posed by the internet—started taking on debt. This debt caught the attention of hedge funds, who saw an opportunity to buy newspapers’ debt bonds and benefit, either through the companies regaining value or through gaining ownership of these organizations in the case of bankruptcy. 1
The latter is what occurred with Postmedia, which was created after GoldenTree Asset Management bet on the bankruptcy of Canwest Global Communications and succeeded in a takeover in 2009.2 Currently, as a result of this change, 98 per cent of Postermedia’s ownership is held by American hedge funds. It is clear that, through their ability to hire Postmedia’s executives and control their compensation, the American hedge fund Chatham Asset Management—which holds 63 per cent ownership—asserts critical influence over the newspaper company’s operations.3
Following Postmedia’s creation, its executives sought expansion and market dominance. Starting with the acquisition of Canada’s second-largest print news chain, Sun Media, Postmedia quickly became the sole operator of daily newspapers in cities such as Vancouver and Ottawa. After monopolizing local markets, Postmedia has often maintained multiple newspapers but printed the same stories in all of them or bought up several papers and shut many of them down, erasing competition.4 The effect of these actions was a complete destruction of editorial diversity in many Canadian communities, weakening their readership’s ability to access different perspectives on critical matters.
Monopolization of local print media has also allowed Postmedia to decrease their journalistic standards. After taking over a new paper, Postmedia usually undertakes severe cost-cutting measures such as firing journalists and slowing down production frequencies. This attempt at cost-cutting coincides with a movement among Postmedia-acquired papers towards entertainment journalism, which seeks to compete with TV, movies, and social media for people’s attention rather than aiming to seriously inform the population.
Postmedia’s acquisition of Sun Media in 2014, which raised the concentration of newspaper ownership in Canada to one of the highest in the world, was not prevented by Canada’s competition bureau.5 Anti-monopoly advocate Keldon Bester sees this regulatory failure as a consequence of the inability of the competition bureau to evaluate monopolization in journalism on the basis of the monopolization of editorial diversity rather than on the monopolization of advertising revenue. Mr. Bester argues that treating news companies as any other business allows the competition bureau to excuse predatory monopolization of local markets by large media conglomerates.
Media Environment
Postmedia’s consolidation of Canadian print journalism and profit-driven change in editorial direction have had an impact on Canada’s wider media environment. A media environment is the ecosystem within which individuals and society interact with communications technology such as social media, traditional news, television, etc. Understanding what makes a healthy media environment reveals the important role local journalism plays in encouraging political engagement.
A healthy media environment is one that fosters a population that is able to engage critically with democratic processes. Maintaining a healthy media environment is a process of combatting disinformation while promoting a diverse range of factual reporting. Individuals are more likely to be politically active when they have access to reputable sources of information, while political apathy and polarized positions are often created through the spread of disinformation.6
Edda Humprecht claims in her article, “Where ‘fake news’ flourishes: a comparison across four Western democracies,” that disinformation is a product of uninformedness, increased polarization, and lack of trust in institutions.7 Accurate knowledge of current events is crucial to an individual’s ability to dismiss disinformation they receive; as Humprecht argues “the more knowledge that people have on a certain topic, the less likely it is that their perception is guided by confirmation bias and naïve realism.”8 It is confirmation bias and “naïve realism” that attract individuals to believing fake news, especially in a polarized environment.
When people are politically polarized, they have more negative feelings towards those politically opposed to them and thus are less likely to believe factual reporting that contradicts their opinions and are also less likely to be critical of disinformation they agree with.9 Similarly, individuals’ trust in institutions, both governmental and not, affects their attitude regarding news outlets, impacting their ability to critically evaluate the information they receive.10 Someone who does not have confidence in the government or journalists will believe conspiracy theories that confirm their cynical suspicions.11
The Carnegie Institute’s Countering Disinformation Effectively policy guide suggests that hard-hitting local journalism can potentially counteract the previously described factors leading individuals to accept disinformation.12 The guide states that “reduced access to local news is linked to lower voter turnout and civic engagement as well as increased corruption and mismanagement,” as when people are not informed, they are less able to engage with politics and hold those in power accountable.13 When there is no accountability for those in power, the Carnegie Institute argues that people lose confidence in institutions, making them more likely to fall for disinformation.14
Furthermore, studying the American context, the report notes that when local news disappears, individuals are forced to find other means of informing themselves, often turning to more partisan forms of media such as national cable news or social media.15 This dislocation leads to an increase in political polarization as individuals are not exposed to the same range of diverse, nuanced perspectives and thus become more vulnerable to “misleading claims that align with their partisan preferences and demonize political opponents.”16
Canadian communities are vulnerable to the spread of disinformation because, as Sonja Macdonald claims, “the consolidation of Canada’s private-sector media has led to a diminishment and scarcity of local news,” or, rather put, “news deprivation.” This news deprivation has significant implications for the future ability of Canadians to engage with democratic processes, as demonstrated above, and thus creates an impetus for immediate policy action.
The Future of the Canadian Media Environment
Over the years many policy solutions have been proposed to help rehabilitate the state of Canadian journalism. The most common answer has been government subsidies, aimed at replacing funds lost by a decrease in advertising revenue. Nonetheless, the loss of advertising revenue is only one factor behind the decline in Canadian journalism, and subsidies have historically been directed towards the very organizations encouraging the decline, rather than integral independent news organizations.
However, subsidies aren’t the only answer. Liberal MP for Calgary Confederation Corey Hogan proposed, before his election, that the Canadian government nationalize Postmedia. Mr. Hogan has suggested the Canadian government should bail out Postmedia’s debt and then sell the organization to the journalists that work there with an interest-free loan. This plan would cost the government less annually than they currently spend subsidizing Postmedia and would solve the foreign interest and debt problems faced by the organization.
Mr. Hogan’s proposal would also counteract the factors that make individuals more susceptible to disinformation. Through giving local journalists a direct stake in the organizations they work for, there could be more resources made available for producing substantive reporting rather than funds going to line the pockets of shareholders. The possible increase in hard-hitting local journalism would then potentially lead to the increase in civic engagement prophesied by the Carnegie Institute.
Expanding the power of local journalists in news creation would also help to rebuild a sense of trust and shared truth among community members. Historian Timothy Snyder argues that local journalism is the link that connects journalism to reality, claiming that “when you clear away the local news, you’re opening the way for the fake news because if journalism starts to become ‘the media,’ it starts to become something distant and abstract, something which is not really about you.” Restoring local news as a pillar of civil society through giving control to local journalists known in their communities would make journalism less distant and abstract. This return would consequently rehabilitate the shared sense of reality that is necessary for individuals to collaborate within a democratic system.
Conclusion
Whatever the solution is to strengthening Canada’s media environment, it is clear that allowing hedge funds to run local newspapers threatens Canadians’ ability to acquire the knowledge necessary to participate in democracy. Having news organizations whose focus is on payments to service debt held by a foreign hedge fund rather than on producing critical journalism directly results in a decrease in local political action and in communities losing a sense of shared reality. However, this does not have to be the case, as good journalism can still be profitable with a shifting business model, and as in this chaotic period, people are still looking for reliable reporting. Investigative, critical, and reliable journalism is central for the functioning of Canadian communities; our government needs to see this policy issue as existential and help to promote a media environment that serves Canadians’ interests.
Edited by Catriona Hayes Morris
The argument defended in this article is solely that of the author and does not reflect the position of the McGill Journal of Political Science, the Political Science Students’ Association, or the McGill Department of Political Science.
Featured image by by Qponpoli obtained via Wikicommons
- Marc Edge, The Postmedia Effect: How Vulture Capitalism is Wrecking Our News (Vancouver: New Star Books 2023), p. 41. ↩︎
- Edge, The Postmedia Effect, p. 4. ↩︎
- Edge, The Postmedia Effect, p. 43. ↩︎
- Edge, The Postmedia Effect, p. 5. ↩︎
- Edge, The Postmedia Effect, p. 7. ↩︎
- Jon Bateman and Dean Jackson, Countering Disinformation Effectively: An Evidence-Based Policy Guide (Carnegie Endowment for International Peace, 2024), p. 20, 11, 75. ↩︎
- Edda Humprecht, “Where ‘fake news’ flourishes: a comparison across four Western democracies,” Information, Communication & Society, (2018). ↩︎
- Humprecht, “Where ‘fake news’ flourishes,” p. 4. ↩︎
- Humprecht, “Where ‘fake news’ flourishes,” p. 4. ↩︎
- Humprecht, “Where ‘fake news’ flourishes,” p. 5. ↩︎
- Humprecht, “Where ‘fake news’ flourishes,” p. 5. ↩︎
- Bateman and Jackson, Countering Disinformation Effectively. ↩︎
- Bateman and Jackson, Countering Disinformation Effectively, p. 20. ↩︎
- Bateman and Jackson, Countering Disinformation Effectively, p. 21. ↩︎
- Bateman and Jackson, Countering Disinformation Effectively, p. 21 ↩︎
- Bateman and Jackson, Countering Disinformation Effectively, p. 21 ↩︎
