Thank you, Madam Chair, and thank you, committee members.
Friends of Canadian Media is a non-partisan citizens' movement that stands up for Canadian voices in Canadian media. From public broadcasting to news, culture and online civil discourse, we represent hundreds of thousands of everyday citizens from across the country who want to protect and defend Canada's rich cultural sovereignty and the healthy democracy it sustains.
I would like to start by acknowledging Parliament's most recent actions. Bills C‑11 and C‑18 triggered considerable debate, but together these policies represent a necessary and vital impulse to do something, to act rather than to acquiesce, and to react to the eroding impact that foreign tech companies are having on our news, our culture and even our democratic health.
When it comes to the news crisis, many shrug their shoulders and suggest there is nothing to be done, that this crisis represents the irresistible march of time and technology, that we are powerless to act, and that the public doesn't even care, but that is wrong. Every day, our supporters tell us how much they do care and how deeply concerned they are about the future of the news sector. They feel what's being lost, and they want better.
They're not alone. Recent polling we commissioned shows that for all the downsizing and derision, Canadians still turn to so-called traditional media to get their news. Seventy-three percent of adults said they deemed news from television, radio and newspapers to be trustworthy and reliable. By contrast, social media was trusted by only 30% of Canadians. Sadly, nearly 80% of Canadians felt that it's getting more and more difficult to know what is true and what is not.
This last statistic should come as no surprise. With the relentless pace of news layoffs, editorially rigorous and trusted journalism is increasingly being replaced by misinformation and disinformation. Some of it is just sloppy. Some of it is ideological. Some of it is predatory trolling for profit. Some of it is outright malicious and even dangerous.
Here we are, knee-deep in a Canadian news crisis, but perhaps it's time to focus less on the result and more on the cause, because if we follow the money, it is clear that advertising revenues have fuelled this crisis in the news.
Over the past decade, GAFAMs—digital giants like Meta and Google—have made their way into our daily lives. These platforms are increasingly coveted and have used their global reach and unfettered market advantage to cannibalize advertising revenues. Not only have we enabled them to do this, we've encouraged it.
Currently, in Canada, advertising purchased on foreign digital platforms is considered a tax-deductible expense. In 2018, when our organization published our study “Close the Loophole! The Deductibility of Foreign Internet Advertising”, we estimated that $5 billion in advertising was being extracted from our economy. We need to close the gap and encourage Canadian advertisers to choose homegrown platforms.
However, we can't stop there. Programmatic advertising has spawned a veritable misinformation and disinformation economy in which toxic content is fuelled by a near-constant flow of advertising dollars. This disinformation economy is worth several billion dollars, most of which ends up in Google's pockets. The company systematically ignores its own standards and practices designed to ensure that digital ads are not placed on sites offering extreme content and ideas.
We can act by imposing transparency and accountability requirements that would help redirect advertising dollars to trusted sources of information, away from those whose business models allow them to profit from amplifying violence, hatred and disinformation.
We must also provide CBC/Radio-Canada with a sustainable funding model. It is the only broadcaster required by law to produce news in all regions. Unfortunately, however, it is crumbling under the weight of chronic underfunding, compounded by a freeze in the last federal budget. As private broadcasters continue to withdraw from news production, particularly local news, our national public broadcaster must have the resources to fill the void and fulfil its mandate. What's more, if CBC/Radio-Canada were better funded, this could reduce its dependence on advertising.
Before we wrap up and address any questions you may have, we want to answer this committee's central question about whether there is a need for a wider study of the Canadian news ecosystem. Our answer is a definite yes.
However, while that study is taking place, we do encourage Parliament to turn its focus to the advertising economy and its tremendous impact on our news, our culture and our democracy. Canadians are looking to you to take up this task, and we urge you to move swiftly and to take a big swing, because half measures have brought us here, to a news crisis that may quickly become a democratic one, and that would be unacceptable.
Thank you for this opportunity to speak with you today.