Context of the Study

On 31 January 2022, the House of Commons Standing Committee on Canadian Heritage (the Committee) adopted a motion to consider the deal’s impact on local news:

That, pursuant to Standing Order 108(2), the committee undertake a study on Rogers Communications Inc.’s takeover of Shaw Communications to consider the deal’s impact on local news; that the committee hear from relevant experts and stakeholders; and that the committee schedule at least one meeting and report its findings and recommendations to the House.^[1]

Pursuant to this motion, the Committee held two meetings and heard from 10 witnesses, including media and community group representatives and communications company executives.

Witnesses’ Views

Rogers Communications Inc.

On 15 March 2021, Rogers Communications Inc. (Rogers) announced its intention to acquire Shaw Communications Inc. (Shaw) for $26 billion. The deal was reviewed or is currently undergoing separate reviews by Innovation, Science and Economic Development Canada, the Competition Bureau and the Canadian Radio-television and Telecommunications Commission (CRTC).

In order to comply with the CRTC’s tangible benefits policy, Rogers proposes to distribute $26.6 million to improve the Canadian broadcasting system. Rogers has made a number of local news commitments, including:

• producing and airing monthly local news specials in the Vancouver, Edmonton, Calgary and Winnipeg markets;
• creating 43 new local news positions in Western markets;
• positioning Citytv to increase investments in news content, which will strengthen the diversity of editorial voices in the Western provinces; and
• directing $8.5 million to the Independent Local News Fund.^[2]

On 2 March 2022, Colette Watson, President of Sports and Media at Rogers, said that Rogers was deeply committed to “ensuring that Canadians can continue to access significant amounts of…local news.”^[3] She said the Shaw acquisition will not “have a material impact on the quantity or quality of local news that is being made available to Canadians today.”^[4] She explained:

Shaw does not own any local television or radio stations, which means the transaction will neither result in any further consolidation within Canada’s television and radio industries, nor reduce competition.^[5]

As well, Rogers’ Citytv stations in Winnipeg, Calgary, Edmonton and Vancouver will continue to broadcast news in their respective markets. Ms. Watson noted that only one change will occur as a result of the transaction:

Corus’s Global TV stations will no longer be vertically integrated with Shaw. As a result of that change in status, Global will become independent and will no longer be able to access local expression funds from its affiliated cable business.^[6]

It’s worth noting that $13 million of Shaw Cable money will be redirected “to Citytv from Global TV stations.”^[7]

According to Ms. Watson, the easiest measure to support local news across Canada would be to expand the “labour tax credit system that is currently in place for print news to include local television news.”^[8]

On 24 March 2022, the CRTC approved, subject to a number of modifications, the application by Rogers to transfer the effective control of the broadcasting undertakings licensed to Shaw or its subsidiaries to Rogers or its subsidiaries. The CRTC concluded “that the transaction as modified by the Commission is in the public interest and advances the objectives set out for the Canadian broadcasting system in the Broadcasting Act.”^[9] Sections 99 to 101 of the CRTC ruling states that the CRTC will review its Local and Community Television Policy and the Independent Local News Fund.

Other Witnesses

All witnesses, other than Rogers and Quebecor (which did not take a position), said that Rogers’ acquisition of Shaw increases the concentration of media ownership and decreases the diversity of voices in local news.

Catherine Edwards, Executive Director of the Canadian Association of Community Television Users and Stations (CACTUS), said that community-owned media and access to local news had been “decimated”^[10] by communications company mergers. The process of zoning former distinct community channels into a single regional channel has contributed to the closure of several community television stations since the late 1990s.

Ms. Edwards believes that “community-owned media is the best way to serve communities with local news and to ensure that a diversity of voices continues to fill our airwaves.”^[11] She asked the Committee to support the Local Journalism Initiative, which enables community media to produce news “for a tenth the cost of public and private sectors.”^[12]

Ms. Edwards also recommended the establishment of a community media access fund.^[13] The fund would give not-for-profit community TV stations the resources to help bring back community TV to “areas of the country that cable companies have pulled out of.”^[14]

Like Ms. Edwards, Alex Freedman, Executive Director of the Community Radio Fund of Canada, described the deal as a “gutting of local news.”^[15] Mr. Freedman argued that “[c]orporate concentration in the media hurts Canadians’ access to local news and information.”^[16] He believes the Rogers-Shaw transaction makes the situation worse.

Mr. Freedman suggested that Rogers contribute some of the tangible benefits associated with the transaction to the Community Radio Fund of Canada to support local news. Mr. Freedman highlighted that the commitment to contribute $8.5 million to the independent local news fund was a one-time commitment: “After that the fund is on its own, and a significant portion, as I mentioned, will be absorbed by Global.“^[17] Subsequently, Rogers has pledged $27.2 million, but it is unclear whether that is one-time funding or ongoing funding. He also suggested extending the Local Journalism Initiative and broadening its eligibility criteria to enable other community broadcasters to obtain funding.

The National Ethnic Press and Media Council of Canada opposes the merger between Rogers and Shaw. President and Chief Executive Officer Thomas Saras believes the transaction will create a monopoly that will increase prices for Rogers’ various communications services.^[18]

Like Mr. Saras, Matthew Hatfield, Campaigns Director at OpenMedia, also opposes the merger between the two companies. He fears an increase in the price of communications services, job losses and “cutbacks on the local news available.”^[19] Mr. Hatfield said the transaction is “a disaster for competition, diversity and innovation in our country.”^[20]

Pierre Karl Péladeau, President and CEO of Quebecor Media Inc., did not weigh in on the impact of the Rogers-Shaw transaction on local news. However, Mr. Péladeau foresees a weakening of local news and the entire news industry if the CRTC does not ease the “regulatory burden”^[21] on broadcasting companies.

Conclusion and Recommendations

In 2017, the Committee undertook a comprehensive study of media concentration and the erosion of local journalism. Five years later, media concentration and the erosion of local journalism have worsened dramatically.

The Committee believes that it is essential that Canadians have access to local news that reflects their identity and reality. Almost all witnesses in this study said that local news is critical to a strong democracy.^[22]

The Committee also believes that Rogers’ acquisition of Shaw should not proceed as currently proposed. The transaction will increase media concentration in some markets and decrease the diversity of voices in the Canadian broadcasting system.

However, if the Rogers proposal is accepted, the federal government should mitigate its impacts. Appropriate measures must be taken to preserve local news in small and medium-sized markets, including those affected by the merger: Kelowna, Lethbridge, Saskatoon, Regina, Peterborough, Kingston, Saint John and Halifax.

The Committee also believes that not-for-profit community media can play a greater role in local news production. They are at the heart of their communities and reflect their reality. However, not-for-profit community media should be adequately funded to carry out this role. There are a number of options to consider.

Not-for-profit community TV stations should be eligible to receive funding from the Independent Local News Fund. One way the CRTC could do this is to increase the contributions of broadcast distribution undertakings to this fund to address the local news needs of underserved areas. The Canada Media Fund could also be used to achieve this goal.

The federal government should also extend and increase funding for the Local Journalism Initiative. This program supports the “creation of original civic journalism that covers the diverse needs of underserved communities across Canada.”^[23] It’s worth noting that this initiative will end in 2023–2024 and that funding for the final year will be cut from $15 million to $10 million.^[24]

The Committee also believes that the CRTC should review the conditions of licence of Rogers and Shaw regarding their financial contributions to local expression. The regulator could require them to devote a fixed percentage of their contributions to not-for-profit community media.

The Committee therefore makes the following recommendations:

List of Recommendations

Recommendation 1

That the Government of Canada reject the Rogers-Shaw proposed merger.

While the Committee believes the merger should not proceed, if it is allowed, the Committee recommends:

Recommendation 2

That, in reviewing the proposed merger, the Government of Canada take measures to ensure the preservation of local news in small and medium sized markets is made a priority.

Recommendation 3

That, while the Committee believes the merger should not proceed, if it does, the Government of Canada should ensure that, in implementing its decision, it includes conditions to ensure the continuation of local news services that would be impacted by the Rogers-Shaw merger in Kelowna, Lethbridge, Saskatoon, Regina, Peterborough, Kingston, Saint John, and Halifax, and that all conditions attached to the merger approval are fully enforceable and that resources are available to enforce them.

Recommendation 4

That the Government of Canada take steps to mitigate the impact of Rogers’ acquisition of Shaw.

More broadly, the Committee offers the following recommendations:

Recommendation 5

That the Government of Canada approves the application by Canadian Association of Community Television Users and Stations and the Fédération des télévisions communautaires autonomes du Québec for a Community Access Media Fund.

Recommendation 6

That the Government of Canada requires as a condition of license that a percentage of “local expression” financing collected through Rogers and Shaw license areas should be directed to this new fund, to support not-for-profit community media organizations to fill the voids in local coverage created by Rogers’ and Shaw’s closures of their own community TV stations.

Recommendation 7

That the Canadian Radio-television and Telecommunications increase contributions to the Independent Local News Fund to ensure local news remains economically viable and receives sustainable and appropriate support to continue local programming and the production of Canadian content in the face of media concentration and consolidation.

Recommendation 8

That the Government of Canada increase funding to the Local Journalism Initiative to support the diverse needs of underserved communities across Canada to best ensure the creation of original, independent civic journalism.

Recommendation 9

That the Government of Canada prioritizes in the Canada Media Fund the funding of small-market and local independent media outlets.

Recommendation 10

That the Government of Canada support community media, ensure a diversity of news sources and guarantee access to local news and information for all Canadians.

Recommendation 11

That the Government of Canada expand the labour tax credit to also apply to broadcast journalists engaged in local news reporting.