May 31st 2021                           

                                      The Decline of Canadian Local Newspapers: A Report

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On the west side of Hamilton, Ontario, there sits a small town, hardly known or talked about, named
Dundas. It’s a valley town, meaning, the ground is low in altitude and is surrounded by large peaks,
blocking much of its area off from outside land. It’s a special place, holding sentimental value in my
heart, as I grew up and have spent most of my life there.

Like many small localities across Canada, Dundas(1) was founded by settlers in 1793, quickly
growing into somewhat of a prosperous area, thanks in part to the onset of the industrial revolution.
Mills, railways, and factories were all built during the rapidly changing 19th century. However, there
was something else that began in Dundas during the 19th century that contributed to the process of
modernization: the newspaper. Similar to many other localities in this same historical time period,
the town of Dundas proudly birthed its own weekly newspaper in 1883(2), calling it, ‘The Dundas
Star’. With a growing population combined with growing industry, a newspaper was the perfect way
to ensure the populace knew what was going on, as well as to keep those in power accountable.

Fast forward to the present day: although the Dundas star is still published on a weekly basis, and
still goes by that name, it is misleading to label it as a “local newspaper”. This is because it is not
truly local, in the sense of being owned and operated by those in the area; instead, it is owned by the
Canadian mass media company ‘Metroland Media Group’, which itself is owned by TorStar (owner
of the Toronto Star among many other media assets), which itself is owned by asset management(3)
firm NordStar Capital. Alarming, isn't it? A once independent, locally run newspaper, now under
the control of just two families, with no ties to the town of Dundas. Yes, the writers and reporters
still probably live in and care for the area, but how far does that truly go when most of the power is
held in the hands of the owner?

If this was an isolated innocent, devoid of any broader trend, then maybe the corporate control over
my hometown newspaper, I could accept; but that is far from the reality. Along with the Dundas Star,
Metroland Media Group owns(4) Ontarian newspapers such as the Barrie Advance, the Burlington
Post, the Cambridge Times, Mississauga News, the Oakville Beaver, the York Guardian, and
troublingly, the list could continue for a while. In other words, the Toronto Star is owned and
operated by the same people as the Dundas Star, and 50+ other newspapers around the province. At
least NordStar Capital is a Canadian company, with its reach mostly in Ontario. Right? Right;
although this is true, the company exists as part of a country-wide oligopoly, meaning, it is one of
the few large “competitors” in the industry. The purpose of this article is to highlight the degree of
concentration in the Canadian newspaper business, along with the decline of local ownership, and
assess the consequences of these developments.

The phenomenon of local newspapers being bought up by bigger media companies is one that is
nationwide. Two major media corporations, owning hundreds across the country, proside firmly
over the newspaper industry: TorStar, and Post Media. Toronto Star, already having been mentioned, and being the name of a paper itself, you probably have heard of, but Post Media? Although it owns
famous newspapers such as the National Post, the Toronto Sun, and the Province, the name Post
Media is not commonly known(5). Yet, in total, the media giant owns over 200 newspapers across
Canada. Post media entered the scene in a substantial way in 2015, when, for a grand total of $316
million, it purchased 175 English newspapers from Quebecor media’s subsidiary ‘Sun media’(6). In
2017, the company owned 45% of all Canadian newspapers. In comparison, TorStar owned 9%
(Though many of the largest). The four largest chains owned 68%. These are staggering numbers; 9
out of every 20 are owned by one company, while these mostly small town newspapers,
masquerading as their former selves, still go by the original name. Chances are, the newspaper in
your area is not owned locally.

As a company, Post Media, almost a majority holder of all Canadian newspapers, can hardly be
called ‘Canadian’. The corporation is public, meaning anyone can buy a stock; although this doesn't
mean that the public at large controls it. The majority shareholder, holding ⅔ of all shares, is an
American “asset management” firm, also known as a hedge fund. Other shares are owned by foriegn
investors, financial institutions and, probably, a few honest Canadians. As this investigative piece at
the Tyee points out, the ownership structure of the company is very complicated, but it is clear that
there is good reason to be sceptical of the loyalty Post Media has towards Canada(7).

Regardless of who exactly owns and controls what, there is no doubt the Canadian newspaper
industry is concentrated into few hands. It is true that in previous eras, mass media companies, or
individuals, in the case of William Southam, tried their best to control large amounts of local
newspapers, but in our own era, the degree of this has reached epic proportions. The same well
documented phenomena has happened in other media domains, like in the TV industry. If this
continues, Canada could face a situation where almost all printed media is majority controlled by
large financial institutions, institutions who, first and foremost, care for the short term profitability
of the paper.

Here we come to a detrimental consequence of concentrated ownership. Over the last several years,
due partly to the rise of the internet, there has been a well documented decline in newspaper
readership and overall revenue(8). If this were to occur in a small town where the paper was locally
owned, there would more than likely be a sense of loyalty to the area among the owners, writers,
and readers, as they are the ones who understand how important this form of media is and has
historically been to the community. Under this business model, the main purpose and goal is
towards the sustainability of the individual newspaper. Juxtapose that with the business model of
one of the major media corporations publishing Canadian newspapers, and the difference is
striking. To a company like TorStar, a single newspaper such as the Dundas Star is not regarded for
the role it plays and many services it provides for the town (holding city council accountable,
keeping citizens informed, documenting local stories, upholding a sense of intellectual community),
but instead wishes to maximize a bottom line. This was transparently noticeable in 2017, when the
two big kids on the block, Post Media and TorStar, decided to announce together that they would
both be trading and shutting down several local newspapers, agreeing that the deal would make for
greater efficiency for both companies. This is also noticeable in the online aesthetic of “local”newspapers. Slowly but surely, all online newspapers owned under one company's umbrella are
looking and feeling similar, in the name of cost savings and efficiency, evidenced by the eerie
sameness of TorStar’s local websites, Dundas Star and Burlington Post, as an example. Uniqueness
and personality of a locality is ripped away when the people who control it no longer have
connection to said area. It then becomes a matter of winner take all for the large holding companies,
abandoning any small failing newspaper that hurts its chances at dominating the market.
In a statement given by Post Media after its acquisition of Sun Media, their agenda was obvious:

“We intend to continue to operate the Sun Media major market dailies and their digital properties side
by side with our existing properties in markets with multiple brands as we have in Vancouver with the
Province and the Vancouver Sun for more than 30 years. Our advertisers will have the opportunity to
reach audiences across the country with a made-in-Canada option for their marketing programs.”
 

“We are excited to be the custodians of many of Canada’s best known and trusted media brands, now
and in the future.”

Notice the type of business language used in these quotes above. Post media, speaking as though
they are some sort of godsend for Canadian journalism, sees themselves as “the custodians for many
of Canada's best known and trusted media brands”, and says they will “ continue to operate the Sun
Media major market dailies”. In other words, the company is happy to provide their journalist
services to readers of “trusted media brands” in “major markets”; but what about to the people of
Manitoba, and the Windsor-Essex area, who are “not financially stable”? If Post media is only
committed to the major markets, what does that mean for all the smaller localities in which the
company has bought the newspaper of(9)? What does it mean for “small market” readers who wish
to stay informed and educated? A town like Dundas, and a newspaper like the Dundas Star, could be
seen as expendable, and because of that, end up with a fate similar to so many other Canadian
newspapers.

There are many other additional consequences of the state of concentration in the current Canadian
newspaper industry, and, in fact, there is a long history in Canadian politics of pointing this out. In
1981 the Parliament of Canada carried out the “Royal Commission on Newspapers”, also known as
the Kent Commission, named after the chair, Tom Kent. Among several other things, the commission
recommended that Canada “prohibit the expansion of existing chains owning or controlling five or
more daily newspapers”. According to the commission, without these barriers, there would be a
situation clearly contrary to public interest. The CEO of Post Media himself, Paul Godfrey, even
admitted that 10-20 years ago “the merger would have caused a heated debate in the house of
commons, probably resulting in another royal commission into the newspaper industry”. Luckily for
his company, we apparently live in a new, monopolistically minded era.

Though not everywhere agrees with Tom Kent and all the other critics of the newspaper industry,
past and present.

 

“In that environment” said Chris Doran, associate dean of the faculty of public affairs at Carleton
University, speaking to Macleans, “ worrying that a smaller and smaller number of companies own a
larger number of newspapers is kind of beside the point, because the newspapers themselves have been
eclipsed in their social, political and economic prominence by the new digital concourses of
communication”.

His point is one way, factually correct. The way people get their news has dramatically changed in
the 21st century, causing the industry to change with it. However, he then uses this fact to justify the
extreme degree of concentration in the newspaper industry. There are many reasons why, I
personally, take issue with this point of view. The first question that should be asked is:

Why, then, do large corporations bother buying these newspapers, if their future is so bleak?

This question becomes even more difficult to answer when looking at the debt most of these large
media companies owe. In the case of Post media, it was forced to give large amounts of equity in the
company to its debt holders after being unable to pay it back. Why would any firm, in dire straits,
choose to buy hundreds of supposedly worthless “assets” like newspapers?

Secondly, Doran here does not address the fact that some newer forms of media are also extremely
concentrated, such as TV and social media. If these are the new methods of communication and
ways of getting the news, surely it is a problem, just as “the old worry about concentration of
ownership was a legitimate worry (in reference to newspapers)” that we see this level of
concentration in what is supposedly the future. If anything, a local newspaper would ideally act as a
combatant force against new age digital news that is inherently globalistic(10).

Thirdly, I believe Doran misses the point and purpose of what so many love about local newspapers.
Yes, today because of the internet there are many digital spaces where one can receive news(11), but
that hardly means a paper like the Dundas Star becomes irrelevant. The Dundas Star, similar to if
there was a local TV news station in the area, has a unique responsibility to give authoritative
information on what is going on specifically in the town of Dundas. A national post article last year
did quite an informative (and emotional) deep dive into the consequences of losing a local paper
like this(12). When the town of Kamloops in BC lost their newspaper in 2014, the local chamber of
commerce at the time poignantly remarked:

“I think the community will definitely lose a little bit of touch with itself”

This quote does an amazing job at summarizing my feelings on the subject. The optimist in me believes that in our new age, decentralized, local digital media will be able to recreate this sense of “being in touch”. Honestly, it has the potential of being better (though different) than newspapers ever were. But we are playing a risky game. By handing the newspaper industry over to large corporations, some of which are not even Canadian, we as a country are essentially giving up on newspapers as a medium of information, if we care at all about so-called “competition”, or concentration in the marketplace. If , on the other hand, the newspaper industry is going to be saved and resurrected, it will need to be carried out by committed and passionate locals with the motivation and money to do so. It will take journalists, printers, and readers in the area to have the courage and know-how to compete against their corporate rivals. That may sound abstract and difficult, but there are many inspiring examples around the country who have done, and continue to do, a terrific job at this(13).

At the end of the day though, my reason for writing this is less about newspapers and more about
sustaining healthy localites, and ultimately, individuals. If newspapers are replaced by digital media,
fine, so be it, but the issues of concentration of ownership, and the consequences thereof, still apply.
The main goals are:

1) Keeping the populace accurately informed on local events.
2) Keeping those in power accountable.
3) Maintaining a strong sense of local intellectual community commonly associated with
newspapers.

Back in the valley town, beautiful Dundas, I believe we are faltering all three of these. Therefore, it
may be time for a change (both in Dundas and elsewhere). I am proudly calling for those who
understand the problem I have highlighted to take it upon themselves to create new, local forms of
media that meet the needs of those in the area. A good old fashion newspaper, it may be, but by no
means is that the only option.