17 February 2016
The Right Honourable Justin Trudeau
Prime Minister of Canada
Office of the Prime Minister
80 Wellington Street
Ottawa, ON K1A 0A2
Dear Prime Minister Trudeau,
One Canadian’s open letter to Prime Minister Justin Trudeau
I am
writing to draw your attention to the regulatory capture of the Canadian
Radio-television and Telecommunications Commission (CRTC) and respectfully
request that you initiate an investigation into corruption at the federal
regulator, as well as to put my request in the context of your open letter to
Canadians.
Specifically,
evidence exists of long-term systemic corruption in relation to a highly
unorthodox company subsidy scheme, one involving public officials abusing the
authority of the CRTC and manipulating the cost paid for cable television
service by millions of Canadians since 1995. The highly regressive scheme has
served to unjustly enrich cable television companies, including corporations
controlled by some of the wealthiest families in Canada (e.g. Rogers
Communications Inc. and Shaw Communications Inc.), and also subsidize the
operations of television production companies through a variety of funds,
including the Canada Media Fund.
As
background, I was employed in the Canadian broadcasting industry for my
knowledge of the cable television industry and its regulation by the CRTC when
this scheme started. My opposition to the scheme’s violation of citizens’
rights and its unjust enrichment of corporations has resulted in questions in
the House of Commons during the Chrétien and Harper
governments[1],[2],
a precedent-setting legal case[3], an
official complaint alleging unlawful activities[4] and
an unpublished CRTC decision in response to the complaint.[5]
In that
unpublished decision, the CRTC ruled itself and corporations innocent of
unlawful activities, while determining that the Canadians being required to pay
for the company subsidy scheme were not legally entitled to direct notice of
the fact that they were being required to pay for the scheme and its monthly
cost.
Open Question
It is worth
stressing that since the unpublished CRTC decision was not subject to a review
by the Federal Court of Appeal, it remains an open question whether or not the
CRTC and corporations acted unlawfully in relation to the scheme.
Failure by
Prime Ministers
The company
subsidy scheme first surfaced in the final month Brian Mulroney was prime
minister;[6] it
was originally designed by individuals that he had appointed to the CRTC and requires
citizens to subsidize private corporations, thereby redistributing wealth from Canadians
to these corporations.
I brought
this issue to the attention of Canada’s last three prime ministers: Jean Chrétien, Paul Martin and Stephen Harper. Their
collective failure to properly address the regulatory affair has served to
critically undermine transparency, protect powerful vested interests from accountability
and facilitate the exploitation of millions of citizens to this present time.
Case Study
Attached is
a copy of One Media Law, a case study
that I completed in 2015 into the company subsidy scheme and systemic
corruption at the federal regulator.
A copy is
also posted on www.onemedialaw.com, as
well as a database with a number of documents related to the issue.
As documented, the first phase of the highly regressive redistribution
scheme was facilitated by the introduction of subsection 18(6.3) of the Cable Television Regulations, 1986,
enacted in 1994 (SOR/94-133); modifications to the scheme were incorporated into
the Broadcasting Distribution Regulations (SOR/97-555).
Following
is a brief commentary on how initiating an investigation into the scheme and
evidence of systemic corruption fits with the priorities and commitments that
you made in your open letter to Canadians.[7]
Transparency and Accountability
Your
commitment “to set a higher bar for openness and transparency [and] shine
more light on government to make sure it remains focused on the people it was
created to serve” is precisely what I am calling upon.
As specifically
addressed in One Media Law, a host of
misleading and deceptive tactics have been employed to accomplish this transfer
of wealth from millions of citizens to these corporations without transparency
or accountability.
The misleading
and deceptive tactics employed include the failure to properly notify
ratepayers about the scheme; fees being collected under false pretences by
cable television companies; closed-door decision-making processes used by the
CRTC with industry; the CRTC decision addressing allegations of unlawful
activities and the rights of Canadians not being published; the destruction of
CRTC file 1000-121 and related documents; and false or misleading information
being provided to citizens, journalists, the House of Commons Standing
Committee on Canadian Heritage and Parliament.
The ongoing lack of transparency at the federal regulator is reflected by the
fact that the CRTC still refuses to even identify which commissioners voted in
favour of adopting the company subsidy scheme more than two decades ago.
CRTC file 1000-121
More importantly, CRTC chairman Jean-Pierre Blais has declined my requests to explain why exactly CRTC file 1000-121 was destroyed on 27 March 2006, or who authorized its destruction and the documents stored in that particular file. For the sake of clarity, CRTC file 1000-121 was where all the documents were stored relating to the complaint I had initiated alleging unlawful activities by the federal regulator and corporations, including the unpublished CRTC decision.
CRTC
file 1000-121 and all of these documents were destroyed after my lawyer submitted
information to Stephen Harper addressing my allegations of long-term systemic corruption
at the CRTC, which specifically identified the existence of CRTC file 1000-121
in connection with the corruption.
Given
the nature of the material involved, the timing of its destruction and the
failure by Jean-Pierre Blais to provide basic information in relation to the
destruction of CRTC file 1000-121, it is entirely possible that the federal
regulator is trying to evade transparency and accountability.
I am
attaching for your benefit copies of three documents formerly stored in CRTC
file 1000-121: the complaint alleging unlawful activities, a submission with
legal argument related to these serious allegations and the unpublished decision
by the CRTC effectively exonerating itself and corporations from wrongdoing.
Copies of
these documents are also posted on www.onemedialaw.com.
Change in
Government
Your commitment that your government “will bring real change – in both the things we do and the way we do them” is relevant in this matter.
Your commitment that your government “will bring real change – in both the things we do and the way we do them” is relevant in this matter.
For a
start, if you choose to be honest with Canadians by simply acknowledging the
existence and nature of the company subsidy scheme in the House of Commons you
will be doing something different to your predecessors.
Government-Industry
Relations
Changing the
excessively close relationship between politicians, corporate executives, federal
regulators and lobbyists is needed in Canada. In short, a greater degree of
separation between industry and state is required.
Sheila
Copps is responsible for the federal government entering its original
partnership with cable television companies in relation to the company subsidy scheme
in 1996,[8] while
she was deputy prime minister and minister of Heritage. Today your
government continues to be in partnership with these corporations in the Canada
Media
Fund, a public-private partnership financed by Canadian taxpayers and money
collected from consumers through the scheme.
According
to Professor Joel Bakan, the existence of public-private partnerships is reason
for citizens to worry. He states: “If corporations and governments are indeed
partners, we should be worried about the state of our democracy, for it means
that government has effectively abdicated its sovereignty over the corporation.”[9]
Appointment
Process
Reform
is also needed to better insulate the CRTC and Canadian Broadcasting
Corporation (CBC) from undue political and/or industry interference, including
changing how appointments are made to these important public institutions.
A
case in point is the recent campaign by Friends of Canadian Broadcasting to
address that nine of the eleven current members of the CBC Board of Directors –
all appointed by Stephen Harper – have all been financial contributors to the
Conservative Party of Canada.
Furthermore, Professor Joseph Stiglitz maintains that it is a common practice
for industry leaders in regulated sectors to use their political influence to
get individuals sympathetic to industry appointed to regulatory agencies
because regulators “write the rules of the game”.[10]
Professor Matthew Fraser describes the CRTC appointment process as
“opaque” and states that “big media companies lobby hard in political corridors
to get reliable proxies appointed [and] over the years, the commission has been
stacked with a motley collection of failed politicians, wives and offspring of
political bagmen, girlfriends of senior party members and cronies of industry
executives.”[11]
He also alleges that the CRTC has been completely captured by corporate interests
in the broadcasting industry since the late 1980s.[12]
Canadian
Content
Clearly, the company subsidy scheme illustrates that fundamental change is
required in how Canadian content (Cancon) is supported by citizens. For too
long Cancon regulations have been distorted and turned to industry’s advantage.
Professors
Steven Globerman, Hudson Janisch and W.T. Stanbury stated twenty years ago,
“most economists think Cancon regulations as ‘boiling down’ to yet another case
of a small, well-organized group using the power of the state to redistribute
income to themselves.”[13]
The
company subsidy scheme is most certainly an example of this unacceptable dynamic
in action.
In its unpublished decision, the CRTC pointed to the Broadcasting Act to justify its introduction of the scheme requiring citizens to subsidize private corporations, alleging: “In enacting subsection 18(6.3), the Commission was acting to implement the broadcasting policy set out in section 3 of the Act and the regulatory policy set out in section 5 of the Act.”[14]
This is the type of regulatory capture that Professor Daniel
Carpenter asserts is of particular interest to many scholars and policymakers,
“one in which certain goals are expressed in legislation but where the
achievement of these goals is distorted, corrupted, watered down, or otherwise
turned to an industry’s advantage.”[15]
While the Broadcasting
Act mandates it is the broadcasting policy for Canada that “each element of
the Canadian broadcasting system shall contribute in an appropriate manner to
the creation and presentation of Canadian programming”, citizens are not
defined in the legislation as being an element of the broadcasting system.
Moreover, forcing citizens – without their knowledge – to subsidize private
corporations is certainly not appropriate in a democracy.
The
objectives of the Broadcasting Act would
be better served by directing funds to protect and strengthen journalism at the
CBC and support not-for-profit community radio and television stations rather
than paying for the company subsidy scheme, which has unjustly enriched corporations
and also subsidized some programming that was produced for export markets with
themes that had little or nothing to do with Canada.
Struggling
Middle Class
Your
acknowledgement that “a struggling middle class” is a real and immediate
problem in Canada is inherently relevant to the company subsidy scheme,
while also useful to consider from a global perspective.
By its very
nature, the scheme has served to increase the concentration of wealth in Canada,
while economic inequality in the world is recognized as a significant and
growing social problem that threatens to undermine democratic values.[16]
According
to Oxfam International’s 2014 report Working
for the Few, the economic game
has been rigged by economic elites co-opting
political power and undermining democracy.[17] In this case, federal regulators have abused the
power of the CRTC to rig cable television rates and effectively redistribute
wealth from millions of ordinary citizens to extremely rich and politically influential
citizens. Successive prime ministers have effectively supported the scheme by
turning a blind eye to the fact that the power of the state is being
abused to unfairly benefit members of an economic elite.
Trust in Government
Finally,
I wish to address your assertion that Canada’s challenges will only be overcome
if citizens have faith in the federal government’s honesty. While I agree with
your assessment, Canada’s federal government simply does not deserve to be
trusted by citizens at the present time. However, you are in a highly privileged
position and able to help ensure that your government rightfully earns the
trust of Canadians.
You credit
listening to Canadians as playing an important role in the result of the recent
federal election and stated in your open letter to Canadians, “I am
committed to leading an open, honest government that is accountable to
Canadians, lives up to the highest ethical standards, brings our country
together, and applies the utmost care and prudence in the handling of public
funds.”
Kindly
acknowledge receipt of this letter and confirm whether an investigation into
the company subsidy scheme and CRTC is being initiated.
Sincerely,
Original letter signed by/
Keith Mahar
[1] Hansard (30 March 1995), Parliament of Canada, Oral Question
Period, No. 180, 11299.
[2] Hansard (8 February 2008), Parliament of Canada, Oral Question Period, No. 047, 1130.
[3] Mahar v Rogers Cablesystems Ltd. (1995) 25 Ontario Reports, (3d) 690 (General
Division).
[4] Cable Watch
complaint to CRTC (28 November 1995), CRTC file 1000-121.
[5] Unpublished CRTC decision (25 June 1996), CRTC file
1000-121.
[6]
Public Notice
CRTC 1993-74, 3 June 1993.
[7] ‘Prime Minister Justin Trudeau’s open letter to
Canadians’, 4 November 2015.
[8]
Canadian Heritage (9 September 1996), ‘Copps Launches
Canada Television and Cable Production Fund’, news release.
[9] Bakan, J. (2004), The
Corporation: The Pathological Pursuit of Profit and Power. Toronto: Viking
Canada, p. 108.
[10] Stiglitz, J. (2013), The
Price of Inequality. New York: Penguin Group, p. 59.
[11] Fraser, M. (11
August 2000), Let CRTC judges be judged. The
National Post, p. C15.
[12] Fraser, M. (10 June
2000), The man who won't do lunch. The National Post, p. D11.
[13] Globerman, S.,
Janisch, H.N. and Stanbury, W.T. (1996), Convergence, Competition and Canadian
Content. In W.T. Stanbury (Ed.), Perspectives
on the New Economics and Regulation of Telecommunications. Montreal:
Institute for Research on Public Policy, p. 217.
[14] Unpublished CRTC decision (25 June 1996), CRTC file
1000-121, p. 4.
[15] Carpenter, D. (2014), Detecting and Measuring Capture. In D.
Carpenter and D.A. Moss (Eds.), Preventing Regulatory Capture: Special
Interest Influence and How to Limit It. New York: Cambridge University
Press, p. 59.
[16] Piketty, T. (2014) Capital
in the Twenty-First Century. Cambridge: Harvard University Press.
[17] Oxfam International (20 January 2014), Working for the Few: Political Capture and
Economic Inequality, p. 1.
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