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Bell is building its profit at the public trough

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Bell building, Montreal. Image credit: Jacques Meynier de Malviala/Flickr

Carl Sagan, the scientist, once identified what he called "one of the saddest lessons of history." I think it applies in spades today to one of Canada's largest and greediest employers of journalists, Bell Media.

"It is this," Sagan said. "If we've been bamboozled long enough, we tend to reject any evidence of the bamboozle … It's simply too painful to acknowledge, even to ourselves, that we've been taken." 

That sad lesson was driven home this week as news broke that Bell is laying off hundreds of journalists at its television and radio stations in Toronto and Montreal, diminishing news coverage just when the public is hungrier than ever for news about the growing coronavirus crisis.

Why should we be outraged by this? A week ago, Bell Canada confirmed that it had taken $122 million in pandemic-related labour subsidies doled out to preserve jobs by the federal government. Instead of using that money to keep its journalists working, Bell chose to increase dividend payouts to its shareholders.

You should know that Bell is not a company in need of a government handout. It is sitting on $5 billion in cash reserves, and its internet operations are showing a 10-per-cent profit as it benefits from all the Zoom calls and Googling being done from home as Canadians wait out the health crisis.

Bell Media, for the uninitiated, claims to be Canada's largest telecommunications company and its largest broadcaster. It is part of BCE Inc.'s Bell Canada division, owner of the CTV television network, specialty TV stations like TSN, 215 music channels and 109 licensed radio stations across Canada.

Bell wouldn't even announce how many jobs it has cut, but Unifor, the union representing some Bell employees, said 210 jobs have been eliminated from television newsrooms in the Toronto area. The entire staff of the Montreal radio station CJAD has also been dismissed. More layoffs are expected at CTV newsrooms across the country.

Unifor condemned the layoffs and said they come just when their communities need journalists most. "Since the beginning of the pandemic, Canadians have seen how important a strong media sector is to their continued health and safety," union president Jerry Dias said.

"These cuts go against the assurances made by the broadcasters last summer to the CRTC (Canadian Radio-television and Telecommunications Commission) to stand by local news."

Bell Media told Canadian Press the job cuts reflect "Bell Media's streamlined operating structure."

"As the media industry evolves, we're focused on investment in new content and technology opportunities while also ensuring our company is as agile, efficient and easy to work with as possible."

Translation: rather than giving people news that affects their lives, we're interested in attracting investors, rewarding investors and growing our revenue-generating streaming platforms.

And now Bell Canada is brazen enough to actually use taxpayers' money to achieve its profit goals.

Last week, even before news of the layoffs, Bell Canada took its lumps for its corporate decisions at a committee hearing on Parliament Hill.

Nate Erskine-Smith, Liberal MP for Beaches-East York in Toronto and a member of the standing Committee on Industry, Science and Technology, got Robert Malcolmson, Bell's chief legal and regulatory officer, to confirm his company's robust financial resources and questioned its decision to increase corporate dividends at a time it was taking taxpayers' money to preserve jobs. "So instead of accessing that available liquidity or perhaps not increasing that dividend, you thought it best to access public funds?" Erskine-Smith asked.

Malcolmson said Bell was entitled to draw on the Canada Emergency Wage Subsidy (CEWS), a federal program that covers a portion of employees' salaries in order to keep those workers from being laid off during the pandemic.

"What we did was we were a participant in a government program that was very well designed to keep Canadians working at a critical time and we participated in that program commensurate with the impact that the pandemic was having upon our workforce."

Attracting investors, Malcolmson said, is essential to pay for the rollout of internet services to more households and upgrading the system to 5G. "The only way you get investment capital is from shareholders that are willing to invest their money with your company in order to fund your network expansion. If we don't have investment capital and if we're not delivering shareholder returns, Canada will not have the level of investment needed to build the networks that we need."

Erskine-Smith replied that "we have Main Street businesses getting crushed, unable to access the necessary supports. And here you are increasing dividends."

National Post investigation in December revealed that at least 68 publicly traded companies had received CEWS handouts while also paying out shareholder dividends. The amounts received by big telcos on the list were not disclosed. A spokesperson for BCE, Bell's parent, told the Post that the subsidies "were not a material amount."

Independent news site downUP uncovered those numbers, including the $122 million Bell received, as well as at least $82 million by Rogers and $38.5 million for Telus. Bell's $122 million is more than any company on the Post's list, topping Imperial Oil's $120 million.

Several large telcos like Bell have justified getting CEWS by pointing to revenue declines in their media divisions. Companies can qualify for the subsidy by showing at least a 30-per-cent year-over-year revenue drop.

That is a loophole that should be plugged. So too should recipients of federal aid be barred from increasing dividends or executive compensation.

Canadian Taxpayers Federation director Aaron Wudrick suggested recently that "Canadians are understandably upset at the idea of large corporations taking advantage of a program intended to save jobs by instead replenishing their coffers and enriching their shareholders. It's time for the government to retool CEWS to make sure any support goes to the people who need it most and doesn't end up in the pockets of those who don't."

Enough is enough for the opportunistic and greedy corporations that grumble about federal regulation but are quick to grab for federal cash.

"Growth for the sake of growth," the writer Edward Abbey once said, "is the ideology of the cancer cell."

From media executive to media critic, John Miller has seen journalism from all sides (and he often doesn't like what he sees). He draws on his 40 years in news, including five years as deputy managing editor of the Toronto Star, and 10 years as chair of the School of Journalism at Ryerson University. His 1998 book Yesterday's News documented how newspapers were forfeiting their role as our primary information source.

Image credit: Jacques Meynier de Malviala/Flickr

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