Tuesday, 8 May 2012

Is a Canadian publisher really Canadian?

Is a Canadian publisher really Canadian?
Many countries have laws ensuring that media ownership remains in national hands or, at least, a large percentage of it does so. Some such laws are very specific. Others, such as the Investment Canada Act (ICA), are rather subjective. In the ICA's case, it empowers the Canadian government to forbid foreign investments of "significant" size if they do not present a "net benefit to Canada."

There is plenty of wriggle room there. What's significant? How does one prove whether it is of net benefit or not?
Those questions have become important since the old Canwest newspaper media conglomerate was acquired in July 2010 by a group of largely US investors - led by a Canadian businessman, Paul Godfrey - who established a company called Postmedia.
It publishes the Toronto-based National Post and a raft of city dailies and urban weeklies across Canada.
Now a media trades union, the Communications, Energy and Paperworkers Union of Canada (CEP), is demanding that the government investigate Postmedia's corporate structure to discover whether it satisfies the ICA.
The main issue is over Postmedia's share arrangements. The union says that the 92% of the company's stock is held by non-Canadians, which amounts to foreign control.
Godfrey disputes the claim, saying that there is a dual share structure that gives voting control to its Canadian shareholders.
To qualify as Canadian-owned, a newspaper must either control 75% of its shares in Canadian hands or be listed on a stock exchange as a publicly traded company controlled by Canadians. Postmedia took that step last year.

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