Heritage committee calls for rejection of Rogers-Shaw deal

The House of Commons Heritage committee is arguing against the merger of Rogers Communications Inc. and Shaw Communications Inc. Such a move will have grave consequences for media concentration and diversity, the politicians argue. In a 32-page report tabled Tuesday in the Commons, the committee points out that in 2017 it undertook an investigation into media concentration and erosion of local journalism. Things have only gotten worse in the ensuing five years, the MPs stated. “The committee also believes that Rogers’ acquisition of Shaw should not proceed as currently proposed,” the report, entitled The Rogers-Shaw Merger: Bad News For Local News, said. “The transaction will increase media concentration in some markets and decrease the diversity of voices in the Canadian broadcasting system.” The call for the rejection of the merger marks the second time a House of Commons committee has called for the deal to be scrapped, as the Heritage committee adds its voice to an earlier call from the Industry committee. If the takeover is allowed to proceed, the government must take measures to preserve local news in small- and medium-sized markets, the Parliamentarians state. “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 MPs added. The report noted that of the 10 witnesses who appeared before the committee during two hearings, only those from Rogers supported the takeover. Quebecor Inc. remained neutral while all others opposed the merger. Many of those in opposition were from community media groups who called for funding for local news. The committee agreed with that proposal. “Not-for-profit community TV stations should be eligible to receive funding from the Independent Local News Fund,” the report stated. “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 government should also increase funding for the Local Journalism Initiative and extend its mandate, according to the report. The initiative will end in 2023-24 and funding for the final year will shrink from $15 million to $10 million, the MPs said. The last of their 11 recommendations is that the labour tax credit be expanded to include broadcast journalists reporting on local news. There was a supplementary report from New Democratic Party Heritage Critic Peter Julian. He proposed recommending that the Competition Act be strengthened to allow the Competition Bureau greater powers to oversee takeovers. The Bureau has filed a motion to oppose the Rogers-Shaw deal. “The risk posed by this transaction is obvious as the Competition Bureau has shown that Shaw’s investment in its network has diminished,” the British Columbia MP wrote. “Shaw was indeed planning to enter new wireless markets, launch its 5G network and expand its wireless service offering to businesses. In addition, Shaw’s reduced marketing and promotional activities have reduced the level of competition in the market.” The NDP has consistently stood against the Rogers takeover. In his dissent, Julian noted that public opinion polls show there is vast opposition to the deal. Later Tuesday, Julian’s NDP colleague Brian Masse raised the issue in Question Period. “This merger would eliminate competition, hurt business growth and increase consumer prices. Canadians pay some of the highest cellphone fees in the world,” Masse, the party’s Industry Critic stated. “We pay close to double what the U.S. does for data alone. Now another telecom giant, Quebecor, is using this disastrous merger to try to acquire Freedom Mobile. This will only lead to more price gouging for Canadians.” Innovation, Science and Industry Minister François-Philippe Champagne replied that he has repeatedly said he will not permit the transfer of spectrum licences from Shaw to Rogers. “He knows that in addition to my department, the CRTC needs to make a decision, as does the Competition Bureau. Affordability is key to Canadians. That is what we will defend,” the minister said. In fact, the CRTC has already approved the takeover of Shaw’s broadcast assets by Rogers, though the decision is now the subject of a petition to the cabinet by the Public Interest Advocacy Centre. The petition has drawn support from Telus Corp. and the Independent Broadcast Group. –Reporting by Paul Park at ppark@thewirereport.ca and editing by Michael Lee-Murphy at mleemurphy@thewirereport.ca

Heritage committee calls for rejection of Rogers-Shaw deal

Broadcast | May 18, 2022

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