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Foreign Ownership of Canadian Media Companies Case Study

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Updated: Jul 1st, 2021

Restrictions on foreign possession of Canadian media companies should be eradicated because there is no evidence that local owners have a higher likelihood of following regulations than foreign operators. However, such restrictions should not be eliminated as that would make operators fail to observe the interests of the public and democracy. There has been a rising debate regarding whether Canada should remove limitations on foreign ownership of media companies. Implementation of such changes encounters at least one critical political hindrance regarding the overflow impact onto the broadcasting industry.

Canadian telecommunication companies, broadcast firms, and journalists are gradually merging and becoming single establishments (Conklin & Lecraw, 2019). For example, Rogers merged with City TV, Bell combined with CTVglobemedia, Shaw owns Canwest Global, and Quebecor acquired Sun Media, Groupe TVA, and Videotron. Foreign ownership laws restrict licensees to 20% possession (up to around 30% for holding companies). This holds for every form of broadcasting, for example, radio, TV, and distributors. Canada should form approaches such as the establishment of broadcasting guidelines and increased awareness to support the creation and broadcasting of content instead of foreign ownership limitations.

Canada should eliminate limitations on foreign ownership of Canadian media firms. This is because the production of original Canadian news items and other content is more costly than allowing foreign ownership (mainly by owners from the United States) and independence. Such monetary realities, and laws that have occurred in reaction, remain in force irrespective of the nationality or origin of the owner (Globerman, 2015).

Foreign-owned Canadian media companies are required to follow the country’s regulations, such as provincial laws, tax regulations, environmental decrees, monetary reporting, and other requirements. Furthermore, there is no proof that Canadian media company owners have a higher likelihood of conforming to regulations and requirements when compared to foreign operators.

Restrictions on foreign ownership of Canadian media companies should be removed since companies that are independent following successful licensing cannot afford to put their license and operations at risk by infringing their terms or national interests. Studies from other developed nations such as Australia show that many countries have eradicated restrictions on foreign ownership of media companies, but the broadcasting sector still maintains local content requirements. The same case applies to European nations as Germany has eradicated foreign possession limitations but media companies uphold regional broadcasting interests (Armstrong, 2016).

Moreover, Ireland and Norway do not have foreign ownership limitations, but create programming directives for every broadcast licensee while the Czech Republic has eliminated its earlier set restrictions but depends on media companies to mandate local programs. In the absence of restrictions, national interests, programming expectations, existing guidelines, and concerns for the local population, which are crucial for continued success, will guide foreign owners of Canadian media companies.

Canadian ownership of media companies and content regulation go together. Removal of restrictions will make foreign owners less probable to adhere to the set laws. According to Canadian content requirements, TV stations should transmit a given proportion of the country’s occurrences, with extra demands for priority programming that encompasses documentaries, dramatic plays, variety shows, and music (Armstrong, 2016).

A minimum of 35% of music that radio stations play should be Canadian as a way of meeting set requirements. The active engagement of radio, TV, and telecom companies is reliant on their successful complying with content broadcasting guidelines, restrictions, and existing regulations such as tax laws, which may be difficult for foreign firms to operate successfully without them. On the contrary, restrictions should be removed because there is no proof that Canadian media company owners are more likely to follow regulations and requirements than foreign operators.

Support of restrictions on foreign ownership of Canadian media companies is based on the affirmation that removal of limitations will make operators not to serve the interests of the public and democracy. This is because most of them may generate a narrow range of alternatives with regard to sources of information required by consumers. Mass media content production will become an independent business, and the interests of a successful company vary from those of a thriving democracy (Fayerweather, 2017). This will make the concerns of owners of media companies fail to intersect with those of consumers.

Under such practices, media companies in Canada, particularly the ones with foreign owners, will not be institutions committed to public concerns anymore, but businesses run entirely according to the standards of maximum possible rate of profitability. This will have a negative influence on the public domain as media companies play a crucial role in shaping attitudes, views, convictions, and values in society. However, this is not true because foreign owners cannot afford to put their licenses and businesses at risk by contravening their terms or going against national interests

Supporters of limitations on foreign possession of Canadian media companies assert that elimination of restrictions will make such operators fail to comply with the interests of the public and democracy. However, such restrictions should be removed because there is no evidence that Canadian media company owners have a higher probability of following regulations than foreign operators.

Though many people are calling for continued restrictions on foreign ownership of Canadian media companies, the truth is that cultural and national interests linked to such possession are greatly overblown. With a rising rate of viewers who venture away from traditional broadcasting systems for their entertainment and news items, Canada should establish better approaches such as strong guidelines and enhanced awareness to support the generation and broadcasting of content than foreign ownership limitations.

References

Armstrong, R. (2016). Broadcasting policy in Canada (2nd ed.). Toronto, Canada: University of Toronto Press.

Conklin, D., & Lecraw, D. (2019). Foreign ownership restrictions and liberalization reforms. Abingdon, United Kingdom: Routledge.

Fayerweather, J. (2017). Foreign investment in Canada: Prospects for national policy. Abingdon, United Kingdom: Routledge.

Globerman, S. (2015). Government protection of domestic communications as national defense: Assessing Canadian government policies. American Review of Canadian Studies, 45(4), 413-429. Web.

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1. IvyPanda. "Foreign Ownership of Canadian Media Companies." July 1, 2021. https://ivypanda.com/essays/foreign-ownership-of-canadian-media-companies/.


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IvyPanda. "Foreign Ownership of Canadian Media Companies." July 1, 2021. https://ivypanda.com/essays/foreign-ownership-of-canadian-media-companies/.

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IvyPanda. 2021. "Foreign Ownership of Canadian Media Companies." July 1, 2021. https://ivypanda.com/essays/foreign-ownership-of-canadian-media-companies/.

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IvyPanda. (2021) 'Foreign Ownership of Canadian Media Companies'. 1 July.

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