Competition Bureau will not review Postmedia move

Dene Moore
National Affairs Contributor
Daily Brew

The federal competition bureau will not review its decision on the merger of the Postmedia and Sun newspaper chains, despite the company’s announcement this week that reneges on its commitment to keep the papers editorially distinct.

The Competition Bureau has a year from the completion of the transaction last April to challenge the purchase but a spokesman for the watchdog says it will not do so.

“While we are aware that mergers can have an impact on jobs, the purpose of the Bureau’s review of a merger is to determine whether it is likely to result in a substantial lessening or prevention of competition in a given market,” Taylor Bildstein tells Yahoo Canada News.

“For the Postmedia-Sun Media transaction, the Bureau’s review determined that this was unlikely. Nothing in the recent news has changed this view.”

Others, though, say the bureau is not equipped to oversee the media industry.

“Right now media in Canada are considered under the Competition Act, by the Competition Bureau, like any other industry,” says Marc Edge, a professor of media and communication at University Canada West in Vancouver and author of the book, “Greatly Exaggerated: The Myth of the Death of Newspapers.”

“It only considers the economic aspects of any mergers or acquisitions, specifically to do with the advertising market and not the informational needs of Canadians.”

In a memo to staff on Tuesday, Postmedia CEO Paul Godfrey announced that the company will merge newsrooms in Vancouver, Ottawa, Calgary and Edmonton. Ninety people were laid off and further staff buyouts are expected.

While the chain will continue to publish the Sun and Postmedia papers separately in each city, the content will be produced in a single newsroom.

Edge says his efforts to obtain documents from the bureau have been frustrated; the review conducted effectively in secret.

He would like to see a separate tribunal for media acquisitions and he is not alone in wanting government to intervene.

Jerry Dias, the president of Unifor, the union that represents some of the laid off newspaper staff, calls the cuts a massive betrayal of trust.

He says the state of the news industry in Canada — print and broadcast — needs immediate attention from the federal government.

“An informed public is the bedrock of a democratic society. Canada needs a strong news industry to ensure we have that informed public electing our leaders,” Dias says in a statement.

“Centralized newsgathering and opinions, including in local news, do not add to the national debate that helps build a functioning democracy.”

Prime Minister Justin Trudeau took notice of the cuts but has not suggested his government will take the suggested action.

“Journalists are vital to our democracy. I’m saddened to hear of the cuts at #Postmedia today and my thoughts are with those affected,” Trudeau wrote on Twitter.

Postmedia posted a net loss of $263 million in 2015. With more than $600 million in long-term debt, the company has said it is looking for $50-million in savings by the end of 2017.

James Musgrove, a competition lawyer at McMillan LLP and past chairman of the national competition law section of the Canadian Bar Association, says the Competition Bureau can and has challenged mergers — when it feels it has a case to advance.

“One of the reasons that led to the bureau’s conclusion that it was going to let this happen pretty clearly was that they were aware of the financial pressures that the newspapers business was under,” he tells Yahoo Canada News.

“I think this decision [by Postmedia] probably illustrates that point, that there are pretty significant financial pressures that traditional media is facing.

“While they intended I guess at the time of the transaction to keep the newsrooms separate, the financial pressures have not permitted that. I don’t think that means the bureau revisits its decision, no.”

Postmedia is not alone in its financial struggles in the industry.

The Toronto Star announced last week it will close its printing plant and lay off more than 300 staff, most from the plant.

Last fall, Quebec’s flagship French-language newspaper, La Presse, announced it would lay off more than 150 staff members as it put an end to weekday print editions in favour of its tablet edition.

And in Atlantic Canada, staff at the Halifax Chronicle Herald face a potential lockout this week as the company and the union face off over proposed layoffs and cuts to wages and benefits at the 140-year-old newspaper.