Heritage Minister Mélanie Joly’s chief of staff has been lobbied by her former employer Google six times in 2017, which the Conservatives and NDP tell Global News raises concerns as her department plans to overhaul the laws which regulate the media industry in which the U.S.-based tech giant has emerged as one of the world’s most powerful companies.
Leslie Church joined Joly’s office following the 2015 federal election straight from Google Canada, where she served as director of communications for three years and seven months according to her LinkedIn page. (The sixth meeting in 2017 was to discuss “science and technology.” Church was lobbied once by Google in all of 2016.)
At five of the lobbyist meetings Church has participated in with her former employer this year, the subject matter was broadcasting. Meanwhile, the government formally signalled in the March federal budget that it intends to “review and modernize the Broadcasting Act and Telecommunications Act,” after Joly repeatedly said last year that legislative changes were on the way.
“We have said it many times, creative industries are going through a period of disruption brought on by the digital shift,” said Pierre-Olivier Herbert, a spokesperson for Joly, in a statement. “Minister Joly has met with all major digital platforms as part of our review of Canadian content in the digital age. Ms. Church’s expertise and broad knowledge of the digital landscape is essential in our assessment of how to best support the sector during this transition. She has been fully transparent about her former employment with Google Canada, including with the Conflict of Interest and Ethics Commissioner.”
Church was tapped in 2015 in part for her knowledge of the changing digital landscape in the media and heritage industries. In multiple cases where Church was among those from the Minister’s office who met with Google lobbyists, she also participated in meetings with other major tech companies including Spotify, Twitter, Facebook and Snapchat on the same day.
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However, Joly’s parliamentary critics say the active communication between her most senior staff member and her former employer, one of the media industry’s biggest private sector stakeholders, raises concerns.
Under the Conflict of Interest Act, public office holders including minister’s staff are expected to abstain from making or participating in decisions that would place them in a conflict of interest.
“One can wonder if Ms. Church is key to any decision making,” said Pierre Nantel, the NDP Heritage critic and MP for Longueuil-Saint-Hubert, in an interview. “What I can tell you is that everybody in the cultural industry is scratching their head.”
“I understand that you have to meet with Google,” he added. “But what’s troubling to me is, of course, the fact that her chief of staff is from Google. This shows there is specific interest. And when you add up the way Ms. Joly is expressing herself — ‘protectionism is a thing of the past’ — with the way she is responding to various cultural industries in saying ‘we have to be ready to export’ it all amounts to some sort of favourable prejudice.”
Joly spent much of 2016 conducting industry-wide consultations with media and cultural groups whose business models have taken a hit amid unprecedented economic disruption in the digital era, with many urging the government to consider monetary or tax supports for the industry. Google, however, has vigorously opposed proposed tax changes to Canada’s online advertising market and other mechanisms that could impact services offered by foreign-based tech companies.
Joly has also stated a desire to move away from policies of protectionism in the media and broadcasting industries, and has earned praise for her candour in recognizing that many of the country’s key cultural policy tools are in need of significant upgrading.
“Over the next year, the Government will outline a new approach to growing Canada’s creative sector — one that is focused on the future, and on bringing the best of Canada to the world, rather than a protectionist stance that restricts growth and limits opportunities,” reads the government’s 2017 budget document.
“I hope that the minister would have asked her chief of staff to leave the meetings to avoid any perceived conflict of interest,” said Kevin Waugh, the Conservative deputy Heritage critic and MP for Saskatoon—Grasswood, in an interview. “And as a former employee, she should have recused herself. I’m also hoping she disposed of any and all stock options.”
Google generally offers its employees restricted stocks that vest over the course of one’s employment as an incentive. According to the Office of the Ethics Commissioner, Church established one or more blind trusts in April 2016, where she placed a number of publicly traded securities under Conflict of Interest Act guidelines, though it is unclear if any of those were Google securities.
The Heritage Ministry is not alone in its discussions with the Silicon Valley tech giant. According to the federal lobbyist registry, Google lobbyists have met with the government 34 times in the last 12 months, more than one of the country’s three major telecoms, Rogers, whose lobbyists had 24 meetings (lobbyists for Telus and BCE met with the government 56 and 47 times, respectively).
What proposals the government brings forward in the next year could have a tremendous impact on the country’s newspapers, broadcasters, telecom providers and media companies which are competing in a growing digital advertising market against foreign competitors including Google, but watching their legacy income streams erode at a rapid pace.
A survey last September by the Interactive Advertising Bureau of Canada forecasted that internet advertising revenues would grow to $5.5 billion in 2016, a 21 per cent growth over the previous year’s haul of $4.6 billion. However, an overwhelming share of that goes to Google and another Silicon Valley tech giant, Facebook.
Data compiled by Carleton University’s Canadian Media Concentration Project showed that, in 2015, Google’s share of the Canadian digital ad market at was, at $2.3 billion, nearly 10 times that of the country’s entire daily newspaper industry. The same data showed that digital ad revenues for all Canadian newspapers and television programs were only about one-seventh of those generated by Google and Facebook.
The digital ad duopoly of the two tech giants has led for some — including Paul Godfrey, the CEO of Canada’s largest newspaper chain Postmedia — to call for tax incentives to drive ad spending towards Canadian companies. Meanwhile, a report from the Public Policy Forum commissioned by the Heritage Ministry urged the government to create a $400-million fund to support Canadian publishers by putting a 10 per cent levy on digital ads placed with non-Canadian companies.
Google, alongside several academics and public policy organizations, has argued that such proposals would be difficult to implement and could stifle innovation, or simply lead to the cost of new levies being passed on to consumers.