Chapter 11: Maintaining a Single System – Ownership

According to the Lincoln Report, ownership issues is a highly contentious subject matter. Essentially, this chapter looks at fundamental questions like: 1) what is the desired mix of public and private property, 2) what rights do private BDUs enjoy, 3) what are the obligations are attached to this right?

Originally, in the late 60s and 70s, issues of corporate convergence were important, particularly that of the increasing media concentration. Early on, the Royal Commission on Corporate Concentration concluded that an “ownership group could potentially take advantage of its dominant position” and that there were no legislative or regulatory policies governing this problem. While other commissions had been underway (i.e. the Royal Commission on Newspapers chaired by Tom Kent) ended up concluding the same concern that there was a high danger associated with growing ownership and concentration. Following this assessment, the Task Force on Broadcasting Policy chaired by Gerald Caplan and Florian Sauvageau concluded that the CRTC had no regulatory instruments set in place to combat the issue of concentrated ownership in the media industry. In response to these commissions, the CRTC now deals with each proposed merger in a scrutinized way.

An important directive issued by The Governor in Council in 1997 stated that non-Canadian licences and renewals are not allowed to be issued. This is to protect the Canadian industry against foreign ownership. The Governor stated to the CRTC require “80% of Canadian ownership and control for all broadcast licensees and 66.6% for holding companies”. The concept of Canadian is a critical component regarding these decisions because, if a non-Canadian has control over a Canadian corporation, that corporation becomes disqualified for license agreements. It is an immensely complicated system requiring complete control and priority be given to Canadians.

The Lincoln Report provided an evidentiary description of the size and magnitude as well as the scope of the entire Canadian broadcasting system. Some witnesses believed that Canadian corporations need to more concentrated in order to effectively compete in the global market, however, others were adamant about the importance of competition and the danger posed by increased concentration. One of the most important concerns of the CRTC is the danger of vertical integration—it cannot be feasible that a corporation wield control over “different stages in the production, broadcasting, and distribution of programs” (395).  Now, a shift to cross-media ownership is taking place in which corporations are taking control of other companies beyond their major/main firm’s specialty.