Business
Government laws designed to rescue Canadian media have done the opposite

From the MacDonald-Laurier Institute
This article first appeared as the cover story to our September 2023 issue of Inside Policy. You can download the full issue here.
By Peter Menzies, October 4, 2023
The federal government has made a regulatory mess with wrongheaded legislation targeting digital media content.
Few things are more fundamental to a nation’s economic prosperity and social cohesion than a robust communications framework.
Canada has its challenges in terms of rural and northern internet and mobile connectivity, but the nation’s overall communications mainframe is, by most international measures, in good shape. The rest of the story involving what gets carried on the mainframe (i.e., the actual content) isn’t as pretty. In fact, two recent communications policy initiatives proposed by the federal government have put tens of thousands of jobs at risk in the creative and news industries.
Money goes where it is likely to generate profit, and if some key arteries aren’t unclogged quickly, the flow of communications investment dollars in Canada could seize up. Worse, the future of what has been a thriving creative economy, driven by independent content creators, is now uncertain.
Meanwhile, the news industry is on the cusp of becoming permanently reliant on government subsidies – a dependency that’s certain to undermine the public’s already wavering trust in its independence.
But first, the good news. While measures vary by source and date, Canada consistently ranks among the world’s top 20 nations when it comes to fixed broadband connectivity, and as high as No. 1 in the world when it comes to mobile internet capacity. Given that most of nations in the top ten for broadband connectivity are smaller in landmass than Prince Edward Island, this is a considerable achievement for a country the size of Canada. This connectivity, however, has come at a premium – consumer in this country are historically among those paying the highest rates anywhere in the world, particularly when it comes to mobile plans. Costs to consumers remain high but have been trending downward in recent years as carriers shift strategic priorities from acquiring new consumers to retaining existing ones.
Far more challenging is a regulatory environment that is less than friendly when it comes to attracting private investment. The Canadian Radio-television and Telecommunications Commission (CRTC) has been risk-averse in its dealings with Mobile Virtual Network Operators (MVNOs) and smaller Internet Service Providers (ISPs) looking for competitive access rates to incumbent networks. Still, competition is one area that appears to be a priority for the CRTC. The regulator’s new chair, Vicky Eatrides, has a background in competition policy; a new vice chair, Adam Scott, is thoroughly familiar with the Telecom industrial framework; and the new Ontario Regional Commissioner, Bram Abramson, has experience as a regulatory officer for a smaller telco. (Abramson’s former employer, TekSavvy Solutions, recently waved the white flag in its efforts to compete in the Canadian market and put itself up for sale.)
Now the bad news – and, fair warning, there’s a lot of it.
Canada is aggressively regulating the internet – not in priority areas such as privacy, algorithms and data collection, but in terms of its content and its users’ freedom of navigation. The Online Streaming Act (Bill C-11) came into force in the spring, amending the Broadcasting Act to define the internet’s audio and video content as “broadcasting” and, as such, placing all this content under the authority of the CRTC. The goals remain the same as they did during the broadcast radio and cable television world of the early 1990s: the funding of certified TV and film properties, ensuring Canadian content (CanCon) gets priority over foreign programming and ensuring designated groups – BIPOC and LGBTQ2S, among other acronyms – and official language minorities are represented. How exactly the CRTC intends to achieve this without disrupting what has been a booming decade for film and television production in a freewheeling global market remains to be seen. As does how it will give its supply-managed content priority without imposing economic harm on the 100,000 Canadians who earn a living in the unlicensed, uncertified world of YouTube and other major streaming platforms.
While the CRTC has promised to provide at least preliminary answers to these questions by the end of next year, years of regulatory haggling and court challenges await and the regulator’s reputation for the timely resolution of matters is spotty at best. As of September 22, for instance, it still hadn’t dealt with a cabinet order to review its CBC licensing decision; a decision which, itself, which took 18 months for the regulator to reach (following a January 2021 hearing that was held three years after the term of the CBC’s previous license had expired). Regulatory sloth of this nature on a routine matter does not inspire much optimism for the expedient handling of the far more complex issue of online streaming.
Indeed, the burden of the Online Streaming Act has already overwhelmed the CRTC’s administrative capacities. In August, it autorenewed the licenses of 343 television channels, discretionary services, and cable and satellite services for two to three years each. It subsequently announced it wouldn’t be dealing with any radio matters at all for “at least” two years. It even nervously punted a demand for the cancellation of Fox News’ Canadian carriage into the future by declaring it necessary to re-do the entire framework involving cable carriage of foreign television channels. It has clearly signaled that it plans to manage nothing other than telecom and Online Streaming Act issues for years to come. Everything else is on hold until such time comes to initiate a catch-up process that, in turn, will itself take years to clear the logjam. All this at a time of significant disruption that demands corporate and regulatory nimbleness.
But even what appears to be catastrophic regulatory arrest pales in comparison to the impact of the federal government’s second significant piece of new internet legislation: the Online News Act. Rarely has legislation designed to assist a sector – news production – been so poorly constructed that it has managed to make everything worse for everyone involved.
Based on the unproven premise that Big Tech companies were profiting from “stealing” content from news organizations, the Act was designed to force Meta (Facebook’s parent company) and Google to redistribute their considerable advertising revenue to those who used to receive the lion’s share of this revenue – newspapers and broadcasters. From the beginning, Meta indicated that the premise and the cost of the legislation, unless amended, would force it to cease the carriage of links to news stories and suspend its existing support programs for Canadian journalism.
The government and the news industry lobbyists who backed the bill grossly overestimated their economic value to Meta and insisted the tech giant was bluffing. Last week, however, Brian Myles, Director of Le Devoir, told an online panel hosted by the Canadian Journalism Foundation that it was clear Meta wasn’t bluffing and, going forward, news organizations would have to adapt to its exit from the market and the considerable financial impact it will have on their industry. He nevertheless held out hope that a rapprochement of some kind might still be possible with Google.
Like Meta, Google has indicated that it, too, will suspend both news linkage and its current partnerships with Canadian news organizations, unless the federal government can provide more economically acceptable options than what it has heretofore offered. As much financial harm as Meta’s departure will cause, there is consensus that Google’s departure – if it occurs – would be a disaster on a nuclear scale.
Even if a deal is reached, the best the news industry can hope for is that Google’s financial concessions will offset a portion of the losses suffered from losing access to Facebook, Instagram and Threads (among other Meta properties). Any money that can be squeezed out of an agreement with Google would be meaningful but a far cry from the hundreds of millions the industry was dreaming of a year ago. The largest recipients of any such windfall, of course, will be those who least need it – namely CBC and Bellmedia.
The bottom line is that, following passage the Online News Act, there will be less revenue for Canadian news organizations than there was just a few months ago. As a result, publishers are pleading for “temporary” measures such as the Journalism Labour Tax Credit and Local Journalism Initiative to be not just extended but enhanced. Up to 35 percent of legacy newsrooms costs would be covered by the federal government while, without Facebook, it will be near impossible for local news innovators outside of the legacy bubble to build audiences.
Next up is an anticipated Online Harms Act, designed to control “lawful but awful” speech through a government-appointed Digital Safety Commissioner. Expect more policy mayhem in the months to come.
Peter Menzies is a senior fellow at MLI and a former vice-chair of the CRTC.
2025 Federal Election
Does Canada Need a DOGE?

From the Fraser Institute
By Philip Cross
The legions of Canadians wanting to see government spending shrink probably look enviously at how Elon Musk’s Department of Government Efficiency (DOGE) is slashing some government programs in the United States, even if DOGE’s non-surgical chainsaw approach is controversial, to say the least.
Some problems are common to cutting any government’s spending. Ironclad job security for union employees with seniority means cuts are skewed disproportionately to junior staff still on probation, with the regrettable side effect of denying an injection of fresh blood into a sclerotic workforce. Cutting employees and not programs makes it easier for higher staffing to resume: as documented by Carleton University Professor Ian Lee in How Ottawa Spends, even prolonged bouts of austerity do not derail government spending from long-term trend of higher growth. Across the board cuts do not allow for the surgical removal of redundant or inefficient programs and poor performing employees.
Canada has some unique problems with federal government spending. Savoie documents how 41 per cent of federal civil servants are located in Ottawa, versus 16 per cent in Washington and 19 per cent in London, despite Canada having the most decentralized federation in the G7. The concentration in Ottawa partly reflects the exceptional influence exerted by central agencies on all departments. As well, University of Cambridge Professor Dennis Grube found Canada’s civil service was the most resistant to public scrutiny and the most risk adverse in a comparative study of public servants in the U.S., the United Kingdom, Australia, New Zealand and Canada.
Canada’s federal employees are among the most expensive anywhere. The average civil servant costs taxpayers $146,500 a year including all salary, benefits and costs such as computers and training. Multiplying this average cost by 366,316 federal employees yields a total labour bill of $53.7 billion, not including other spending such as $17.8 billion on consultants. All the recent increase in the ranks of the civil service happened in Justin Trudeau’s tenure, expanding 38.5 per cent after Stephen Harper had cut them 9 per cent between 2010 and 2015 in his determination to balance the budget.
While the cost of government employees has risen sharply, the services they provide to the public are dwindling as government spending increasingly is devoted to managing its unwieldy and bloated bureaucracy. As Savoie observes, unions like to paint civil servants as providing essential services such as food inspectors and rescue workers, when in reality most are involved in a vast web of “policy, coordination, liaison, and performance evaluation units.” The fastest growing occupations in the federal government are in administrative services and program administration, whose share of jobs rose from 25.1 per cent in 2010 to 31.9 per cent in 2023 according to the latest report from the Treasury Board.
A chronic problem is the fierce defense offered by public service unions in “protecting non-performers and insulating the public sector from effective outside scrutiny” as Savoie wrote. The refusal to acknowledge and root out non-performers depresses the morale of the average civil servant who’s unfairly tarred with the reputation of a minority. It also motivates the across-the-board chainsaw approach of DOGE, which critics then decry as not discriminating between good and bad employees. The latter could easily be targeted by senior managers, who know exactly who the non-performers are but cannot be bothered with the years of documentation and bureaucratic headaches needed to get rid of them. The cost of poor performers is substantial; if even 10 per cent of the civil service was eliminated as redundant non-performers, the government would save $5.4 billion a year. Potential savings are likely well over $10 billion.
The federal government potentially has enormous leverage in negotiating civil service pay and getting rid of non-performers, because it can unilaterally change the federal pension plan without negotiating with public-sector unions. The federal pension plan is so generous that it’s referred to as the “golden handcuffs” that tie employees to their jobs irrespective of their pay or working conditions. To protect their lucrative pensions, unions inevitably would be willing to make concessions that substantially lower the burden on Canada’s taxpayers and still improve morale within the civil service.
2025 Federal Election
Don’t double-down on net zero again

From the Fraser Institute
In the preamble to the Paris Agreement, world leaders loftily declared they would keep temperature rises “well below 2°C” and perhaps even under 1.5°C. That was never on the cards—it would have required the world’s economies to effectively come to a grinding halt.
The truth is that the “net zero” green agenda, based on massive subsidies and expensive legislation, will likely cost more than CAD$38 trillion per year across the century, making it utterly unattractive to voters in almost every nation on Earth.
When President Trump withdrew the United States from the Paris Climate Agreement for the first time in 2017, then-Canadian Prime Minister Justin Trudeau was quick to claim the moral high ground, declaring that “we will continue to work with our domestic and international partners to drive progress on one of the greatest challenges we face as a world.”
Trudeau has now been swept from the stage. On his first day back in office, President Trump signed an executive order that again begins the formal, twelve-month-long process of withdrawing the United States from the Paris Agreement.
It will be tempting for Canada to step anew into the void left by the United States. But if the goal is to make effective climate policy, whoever is Canada’s prime minister needs to avoid empty virtue signaling. It would be easy for Canada to declare again that it’ll form a “coalition of the willing” with Europe. The truth is that, just like last time, that approach would do next to nothing for the planet.
Climate summits have generated vast amounts of attention and breathless reporting giving the impression that they are crucial to the planet’s survival. Scratch the surface, and the results are far less impressive. In 2021, the world promised to phase-down coal. Since then, global coal consumption has only gone up. Virtually every summit has promised to cut emissions but they’ve increased almost every single year, and 2024 reached a new high.
Way before the Paris Agreement was inked, the Kyoto Protocol was once sold as a key part of the solution to global warming. Yet studies show it achieved virtually nothing for climate change.
In the preamble to the Paris Agreement, world leaders loftily declared they would keep temperature rises “well below 2°C” and perhaps even under 1.5°C. That was never on the cards—it would have required the world’s economies to effectively come to a grinding halt.
The truth is that the “net zero” green agenda, based on massive subsidies and expensive legislation, will likely cost more than CAD$38 trillion per year across the century, making it utterly unattractive to voters in almost every nation on Earth.
The awkward reality is that emissions from Canada, the EU, and other countries pursuing climate policies matter little in the 21st century. Canada likely only makes up about 1.5 per cent of the world’s emissions. Add together Canada’s output with that of every single country of the rich-world OECD, and this only makes up about one-fifth of global emissions this century, using the United Nations’ ‘middle of the road’ forecast. The other four-fifths of emissions come mostly from China, India and Africa.
Even if wealthy countries like Canada impoverish themselves, the result is tiny — run the UN’s standard climate model with and without Canada going net-zero in 2050, and the difference is immeasurable even in 2100. Moreover, much of the production and emissions just move to the Global South—and even less is achieved.

One good example of this is the United Kingdom, which—like Prime Minister Trudeau once did—has leaned into climate policies, suggesting it would lead the efforts for strong climate agreements. British families are paying a heavy price for their government going farther than almost any other in pursuing the climate agenda: just the inflation-adjusted electricity price, weighted across households and industry, has tripled from 2003 to 2023, mostly because of climate policies. This need not have been so: the US electricity price has remained almost unchanged over the same period.
The effect on families is devastating. Had prices stayed at 2003 levels, an average family-of-four would now be spending CAD$3,380 on electricity—which includes indirect industry costs. Instead, it now pays $9,740 per year.
Rising electricity costs make investment less attractive: European businesses pay triple US electricity costs, and nearly two-thirds of European companies say energy prices are now a major impediment to investment.
The Paris Treaty approach is fundamentally flawed. Carbon emissions continue to grow because cheap, reliable power, mostly from fossil fuels, drives economic growth. Wealthy countries like Canada, the US, and European Union members have started to cut emissions—often by shifting production elsewhere—but the rest of the world remains focused on eradicating poverty.
Poor countries will rightly reject making carbon cuts unless there is a huge flow of “climate aid” from rich nations, and want trillions of US dollars per year. That won’t happen. The new US government will not pay, and the other rich countries cannot foot the bill alone.
Without these huge transfers of wealth, China, India and many other developing countries will disavow expensive climate policies, too. This potentially leaves a rag-tag group led by a few Western European progressive nations, which can scarcely afford their own policies and have no ability to pay off everyone else.
When the United States withdrew from the Paris Agreement in 2017, Canada’s doubling down on the Paris Treaty sent the signal that it would be worthwhile spending hundreds of trillions of dollars to make no real difference to temperatures. We fool ourselves if we pretend that doing so for a second time will help the planet.
We need to realize that fixing climate change isn’t about sanctimonious summits, lofty speeches, and bluster. In coming weeks I’ll outline the case for efficient policies like innovation, adaptation and prosperity.
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