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People in a room watching CBC news, logos for the corporation are seen on several TV screens
A revolution in Canadian communication funding policy is not only possible, it is necessary. THE CANADIAN PRESS/Peter Power

Canadian media is far too reliant on U.S. tech. Here’s what the government can do about it

American social media companies blocking Canadian news poses serious problems for Canadian media. Meta blocked Canadian news on its social media sites, Facebook and Instagram, in August in response to Canada’s Online News Act. Google has threatened to take similar action when the law comes into effect at the end of the year. Outlets that rely on social media to reach their target audiences will likely struggle to get by. However, the problem also creates an opportunity to rethink communication funding in Canada.

Pablo Rodriguez, then Heritage Minister, was right when he said the Online News Act is about correcting “market imbalance” between Canadian news outlets and Silicon Valley tech companies. Canadian news organizations should be compensated by the social media platforms for content.

Add this conundrum to the over-reliance on American telecommunications services, and the need to rethink funding Canadian communication is urgent.

Read more: As Canadian wildfires rage, Facebook's news ban reveals the importance of radio

However, there could be a silver lining in these dark clouds: public outrage may be enough to push the government to establish Canadian-centric media policies and a new funding model for emergency information and communication technology. A revolution in Canadian communication funding policy is not only possible, it is necessary.

Trickle-down funding just doesn’t work

U.S.-based companies like Google and Meta profit from Canadian content and Canadian audiences, while relatively small dollars trickle down into the pockets of a few Canadian businesses. The most obvious impacts of this dynamic are on local media outlets that are forced to cut staff, or close altogether, creating an impoverished media landscape.

Some outlets will no doubt suffer as a result of U.S. tech companies blocking Canadian news. Meanwhile, the few millions of dollars of ad revenue provided to Google and Facebook withheld by Ottawa, provincial governments and some Canadian media will barely make a dent in the profits of the Silicon Valley behemoths.

This comes at a time when dwindling media revenues are posing risks to Canada’s emergency alert system, Alert Ready. There has been a rise in the use of the system due to floods, tornadoes and wildfires. Yet, Canadian authorities are sticking to a funding model that relies on dwindling cable TV subscribers.

Funding from commercial Canadian cable companies trickles down to fund the alert system. But customers are increasingly switching away from cable TV for options like streaming.

According to the Angus Reid Institute, while a little over 88 per cent of Canadian households subscribed to cable in 2012, that number dropped to 61 per cent in 2022.

This fall could put funding for the emergency alert system in jeopardy. That is cause for concern, especially at a time when emergency situations like wildfires and floods are becoming more frequent and dangerous.

A phone displaying an emergency alert message
Funding for Canada’s emergency alert system comes from commercial Canadian cable companies, but viewers are increasingly switching away from cable. (Shutterstock)

Two lessons for Canadians

In order to fix these problems, Canadians must bear in mind two lessons about how not to construct communication systems.

Lesson one: Do not rely on American media and communication infrastructure to protect the interests of Canadians.

The first lesson should be obvious. Canada is far too reliant on communication infrastructure and media products from down south. I have written previously about the reliance on U.S. media. But, to be clear, the problem is not only the media content.

As Innovation, Science and Economic Development Canada reports, “the bulk of Canadian consumer-to-consumer traffic and consumer-to-enterprise traffic is routed by Canada’s incumbents via the US (and US IXPs) rather than through Canada.”

Both Liberal and Conservative governments have not kept former prime minister Richard Bennett’s 1932 promise of “complete Canadian control of broadcasting from Canadian sources.”

Canada relies on U.S. private industry for routing Canadian traffic through the U.S. and upgrading services. That reliance on the U.S. is not difficult to understand: it’s cheaper. Ensuring safety and services to Canadians is not the priority.

Lesson two: Do not rely on ever-changing elected leaders or ever-changing commercial communication services to provide stable support for media that serves the needs of all Canadians.

Funding for the CBC has vacillated dramatically over the years. A funding policy reliant on advertising dollars has left the CBC vulnerable to complaints about competing unfairly with commercial media and underfunded.

When it comes to funding, the CBC lags behind comparable media in other countries. A 2018 report prepared for the CBC comparing public funding for public service media showed that at $33 per capita, Canadian public service media funding ranked 17 out of 20 western countries.

Research by the European Broadcasting Union suggests the single most important factor determining public service media audience share is adequate financing. And having financial independence is key to gaining public trust.

A man with his hand on his head leans against a wall outside the CBC building.
Funding for the CBC has vacillated dramatically over the years. When it comes to funding, the CBC lags behind comparable media in other countries. THE CANADIAN PRESS/Chris Young

Trust in media is vital to get the public to respond effectively to emergencies. Statistics Canada reports that Canadians are not prepared for the next pandemic, flood or wildfire. The CBC is insufficiently funded to provide effective emergency communication, including providing trusted information and coordinating effectively with Alert Ready.

An independent and well-funded media

Canadian media and telecommunications services must not be dependent on either U.S. or Canadian commercial interests or Canadian politicians. Canada should establish a non-government trust funded (but not controlled) by both commercial operations and Canadian governments.

The trust could be funded, in part, by a British-style licence fee. In 2022, the BBC saw an income of around 3.8 billion British pounds from licence fees. In 2023, the licence fee was £159 per year (around $260).

Establishing a similar arrangement could potentially provide far more than the $1.2 billion the government spent on the CBC in 2022.

Canadian public service media and telecommunications service could also derive revenue to invest in a communication trust from spectrum licence fees and fees generated by foreign use of Canadian content and data.

A tablet displaying a news page placed on top of a stack of newspapers
Canadian news must be well-funded and delivered in a variety of ways. (Shutterstock)

A robust, reformed Canadian public service multi-platform communication service is more than feasible. Canadian public service media should be required to provide services beyond the broadcasting technology of the 20th century. Video, audio and text should be made available via a Canadian social media platform, local electronic billboards and other platforms.

An integrated, interactive emergency communications system with a focus on service to local communities would begin to address current needs with the latest technologies.

The old promises of the CBC have not been met, and warnings about reforming Canadian media have been largely ignored. The damage to Canadian media caused by social media extortion and the loss of cable TV revenue makes it clear that the time for piecemeal reform has passed.

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