"Aside from the crisis this has caused within Canada's so-called legacy media due to lost revenue, the government is also forgoing more than a billion dollars in tax revenue that could be used to stabilize the industry or offer incubator funding to innovators." ---

The Internet: an information superhighway or the expressway to 1984?

Given some stunning political developments, from Donald Trump’s triumph of mendacity in the United States, to the sudden rise in Italy of the Five Star Movement from fringe party to leading party at nine cents a vote, I lean toward the latter. The Bullshit Market has never been stronger. The only thing sadder than that is politicians in Canada, especially the governing Liberals don’t seem to get it — or, perhaps, don’t want to get it.

The late Arthur Finkelstein, dark guru of drive-by political smear campaigning, once observed that it was difficult to tell what was true or false on the web. He saw that as an advantage. You could put out egregious lies, and for a while they would seem true. Conversely, you could characterize true stories as fake and for a while they would be bogus.

You know the rest; first impressions are lasting impressions. And everyone is suddenly their own expert, even when they are being played like a 50-cent fish by trolls, bots, and hackers.

Case in point? Emma Gonzalez, one of the leading voices of students demanding gun control in the United States, was recently photographed tearing up a rifle range target. But when her image was flashed across social media, it was the U.S. Constitution the student was ripping in two.

The gun nuts had their come-to-Jesus moment. These kids were not social activists in any positive way, they were subversives. It was all right there on the Internet. The real picture received less attention than the fake one.

The conveyor belt for these big lies is social media outlets, from small ones like Gab, to the giants of the business, Facebook, Google and YouTube. We now all know the story: Cambridge Analytica harvested 50 million Facebook accounts to create so-called “psychometric profiles.” They in turn were used to stalk voters in the last US presidential election. It was dishonest, underhanded, and possibly illegal, but it worked.

That’s the U.S., where anything goes, right? Not at all. The problem is that Google and Facebook are worldwide phenomena, and Canada long ago ceded the field to the U.S. behemoths.

It didn’t have to be that way. Canadian tax law has long provided incentives for companies to advertise in Canadian magazines, newspapers, and on television, but the tax code does not apply to digital media. If a Canadian corporation buys an ad in a foreign-owned newspaper or broadcast, it doesn’t get to count that as a business expense on its corporate taxes. This was to encourage Canadian newspapers and broadcast outlets to flourish against American competitors that benefit from enormous economies of scale. It was to ensure there was Canadian content created to protect our culture from being Disney-fied, and prevent us from becoming pale imitations of our information-spewing American cousins.

But advertisements purchased on foreign web sites have always been — and remain today — fully tax deductible under the Income Tax Act. So Canadian companies now simply buy their ads on Google and Facebook — which take more than half the revenues and flood the marketplace — instead of sites owned by Canadian media companies. No one can compete with their audience size.

A study by Friends of Canadian Broadcasting, a watchdog group for Canadian culture and programming, found that in 2016 up to 90 percent of the $5.6 billion that Canadian firms spent on online advertising went to foreign web platforms. A 1996 interpretation of Section 19 of the Income Tax Act, way back in the days of dead tree journalism, gave Canadian companies that loophole. So a 22-year-old ruling, made before the internet took over communications, is governing what ads Canadians see online — and exterminating Canada’s media sector.

Aside from the crisis this has caused within Canada’s so-called legacy media due to lost revenue, the government is also forgoing more than a billion dollars in tax revenue that could be used to stabilize the industry or offer incubator funding to innovators, according to the FCB study. Facebook and Google use Canadian media content without sharing the ad revenue, even though they depend on the news content provided by the publishers. Not a very sustaining symbiotic relationship, if you eventually kill the content that feeds you.

Realizing this, Google has recently announced a $300-million investment fund to help news publishers who provide content. It admits the industry is struggling because Google and Facebook still get the majority of advertising revenues. They are also launching a belated effort to fight fake news, and help publishers attract more subscribers who are willing to pay for their news. Or maybe it’s just an attempt to avoid government regulation. In any case the bottom line in Canada is this: no ad revenue, no reporters, no democracy.

When John Honderich, the former editor and publisher of the Toronto Star, testified before the Canadian Heritage Committee in 2016 about the crisis in Canadian media, he said the Star’s newsroom had shrunk from 470 a decade ago to just 170 today. It now looks like more cuts are on the way. James Baxter, the founding editor of iPolitics, compared CBC’s publicly funded expansion into digital news to an “uber-predator” that competes directly with private media companies who are already getting slaughtered by Facebook and Google.

Less local news and less investigative journalism may not bother a lot of people. It should. It not only means that people are less informed, which has monstrous consequences for Canadian democracy and open the door to corrupt politicians and government workers. It also means they can be easily swayed by bad actors like Cambridge Analytica that use so-called Big Data to prey on Canada’s most ignorant and vulnerable, who, by the way, also vote.

Just before the presidential election, Trump’s campaign team actually bragged to Bloomberg Businessweek that “We have three major voter suppression operations under way.” They were aimed at three groups Hilary Clinton needed to win: idealistic white liberals, young women and African Americans. Steve Bannon knew Facebook’s power to manipulate and deceive.

Fear and anger are powerful emotions. An early Facebook investor, Roger McNamee, suggested that the social network’s methods are similar to those used by Nazi propaganda chief Joseph Goebbels — a form of pandering to secretly held intemperate views that leads to an addiction of sorts. There is a reason the TV station is the first stop during a coup d’etat and that wannabe dictators quickly shut down independent news sources once in office. A responsible — and sometimes defiant — free press is essential in any healthy democracy.

When he was campaigning and since becoming prime minister, Justin Trudeau has often said he respects the work journalists do and the service they provide their communities. If he truly believes that, he should amend Section 19 of the Income Tax Act immediately. No more tax deductibility for ad money spent by Canadian companies on Facebook and Google. It’s simple and its fair.

If, on the other hand, Trudeau wants to hand responsibility for Canadian culture to Mark Zuckerberg, it would not come as a big surprise.