Friday, April 8, 2011

CBC prefers reporting Harper's falsehoods over the simple truth

Kirk LaPointe
CBC Ombudsman

Dear Mr. LaPointe:

I am in receipt of your letter of April 8, 2011 (see below) in response to the complaint to your office concerning factually inaccurate reporting by the CBC.

Well I guess it's too much to expect the CBC to expose the patent lies of the Harper government on matters like tax leakage that destroyed the pension savings of millions of Canadians and caused over $100 billion in foreign takeovers of income trusts that lead to real tax leakage instead of the government's fear mongering over fabricated tax leakage.

Something is fundamentally wrong with the CBC as a news reporting organization. Not sure whether it is incompetence or being politically or commercially compromised at some level of the organization?

It's a moot distinction. PBS you are not. Frontline you will never be, since repeating the government's patent lies appears to be your organization's raison d'etre.

Yours truly,

Brent Fullard

Office of the Ombudsman
P.O. Box 500,
Station A Toronto, Ontario
M5W 1E6
Tel. (416) 205-2978

April 8, 2011

Mr. Brent Fullard
President and CEO
Canadian Association of Income Trust Investors

Dear Mr. Fullard:

I am writing with regard to your complaint January 9, 2010, and request March 9, 2010, for a review by this Office concerning coverage of the income trust issue by CBC News.
Let me first apologize for the time it has taken to review the matter. When I assumed the role of Ombudsman in November, I began to help my predecessor contend with a substantial backlog. Work continues on that, but it is of little consolation to you. I want to express appreciation for your patience in this matter.

Since your request, CBC has updated its Journalistic Standards and Practices policy. But because your complaint preceded that change, the earlier policy applies. (There are not significant changes that would have affected this review.) As is customary practice with those in organizational roles relevant to their complaints and with those directly connected to the review (the story in question features you), your identity is being made public.


Brent Fullard, the president and chief executive officer of the Canadian Association of Income Trust Investors, wrote January 9, 2010, to complain “about the suppression of the news at the CBC.” Another complainant wrote CBC March 4, 2010, on the matter. His concerns echoed Fullard’s, so this review addresses both complaints.

Fullard asserted that CBC failed to provide an “honest counterpoint to the endless lies about income trusts that are advanced elsewhere in Canadian media.” He believed there was an “active suppression” to keep the story away from Canadians, perhaps out of commercial or political pressure. He argued that more was expected from the public broadcaster.

An income trust is an investment designed to pay regular cash to investors. An income trust buys and holds stocks or assets of businesses. Investors buy units or shares of those trusts. If the businesses make money, the trust may share some of the profits through payments.

In 2006, the federal government announced it would start taxing trust payments in the 2011 taxation year, even though it had only months earlier promised it wouldn’t. Fullard said the move was going to cost investors $35 billion and confer benefits for corporations over trust shareholders. He said the government had overstated the extent of “tax leakage” (forfeited tax revenue) from existing income trusts to justify the new provisions. He further argued that the changes precipitated a raft of foreign takeovers that ultimately hurt federal revenue.

Fullard, who noted in correspondence that he ran as a Liberal Party candidate in the 2008 federal election (and says he has since distanced himself from the party), said that a CBC reporter had indicated she had been thwarted in attempts to get the story on the air. He said a subsequent effort to bring the story to Radio-Canada during the 2008 campaign was “ultimately suppressed” and would have changed the election’s outcome.

In early 2010, following the prorogation of Parliament, CBC News invited viewers to submit questions they would like politicians to answer in the absence of the daily House of Commons question period. Fullard said CBC failed to choose his question seeking the government’s justification for the tax change, one that he asserted was a top vote-getter online.

Esther Enkin, the executive editor of CBC News, wrote back February 5, 2010, to address Fullard’s many allegations. She said there was no substance to them.
The reporter whom Fullard said had indicated the income trust story had been suppressed had said no such thing, Enkin added. She had simply been looking for a practical way to tell the story and had not yet convinced senior editors of its qualities.

Enkin said she had inquired about Fullard’s allegation of suppression of the story at Radio- Canada. While a story was prepared as a newsfeature, it contained no new information. When more topical stories emerged, the feature never aired.
As for the question Fullard provided, Enkin noted Fullard blogged about it before voting by the audience had concluded. She said that week a question on protecting disadvantaged Canadians had been voted the top question.

“I realize that it is not uncommon for someone who has a strong interest (in) an issue to be frustrated at others, the media included, who do not share that degree of interest,” Enkin wrote. “But that does not mean . . .that they are censoring or ‘suppressing’ the issue or are biased against it.”

Fullard wrote back February 12, 2010, that CBC had again that week not proposed to politicians the top question as selected by voters (his question).
He later wrote Enkin that the income trust story “is much simpler than people seem to want to make it.” He provided an extensive list of leads to the story he said could be pursued. He said he wanted to work with a CBC reporter on it.

To some extent, he got his opportunity.

On February 26, CBC Television’s The National aired a story in which he was featured. The story URL is:

The story arose from Fullard’s question and he and a retiree were identified as examples of investors upset with the federal government’s 2006 decision to tax the payments from income trusts.

Reporter Havard Gould said Fullard’s group was attempting to get the government to “justify a sudden move” to tax the payments, a measure government “said it would not do.”

Gould said CBC wasn’t “able to put questions” to the minister because he didn’t make himself available. Instead the finance minister, Jim Flaherty, was featured in archival clips about the necessity to proceed out of fairness with the tax measure.
Gould interviewed Laurence Booth of the Rotman School of Management for the item. Booth asserted tax revenues would have been seriously affected had the government not proceeded.

Fullard wrote again that the story amounted to a “hatchet job.” He said it failed to produce a politician to answer the question and didn’t give him an opportunity to rebut the archived clips it used.

He again challenged the assertion that leaving income trusts alone would have forfeited tax revenue. He took issue with the mention of decisions by BCE Inc. and Telus Corp. to enter income trusts, saying it misled people on the issue. He said the finance minister’s remarks in the story had been taken from a very different context.

He said that Booth was not a qualified academic to be included in the story.
Enkin responded once more March 10, 2010, saying Flaherty’s comments were relevant to the question at hand, as was the mention of the telecommunications companies.

She said the story was not an opportunity for him to debate Flaherty and that Booth had been a well-cited business scholar.

CBC Journalistic Standards and Practices in effect at the time called for accuracy in reporting so that “information conforms with reality and is not in any way misleading or false.” Fairness in reporting needed to reflect “equitably the relevant facts and significant points of view.” The policy called for “proper care and judgment” in using archival material. Information must be “truthful, not distorted to justify a conclusion.”


Day-to-day editorial decisions involving which stories to cover or not are outside the purview of the Office of the Ombudsman. As one can imagine, there would be no end of activity were there involvement in reviewing the thousands of decisions daily to assign particular coverage or not. I can only make the general observation that the political accountability sought by the complainant remains unaddressed. Government analysis of the tax change has not been released, nor is there any documented journalism that the minister directly answered the points raised by the complainant and those he represents.

But it is possible to review the February 26, 2010 story — more for what it did in adhering to standards and practices, less for what it didn’t in pursuing alternate lines of inquiry, because it is not an Ombudsman’s role to impinge upon editorial freedom within thoughtfully framed journalistic policy.

In its programming CBC News promoted the weekly feature, Your Question, as an opportunity to make politicians (mostly, government politicians) accountable while Parliament was prorogued. On the basis of that promotion, it was reasonable to assume that each week CBC News would take the most-supported question from viewers and seek a politician’s answer.

CBC repeatedly sought the finance minister’s involvement and satisfied policy in saying he wasn’t available when it did so. It chose to use the viewer question to chronicle the complainant’s quest for answers. As a news feature, it satisfied CBC Journalistic Standards and Practices, even if it might not have fulfilled Your Question’s intention of political accountability.


Kirk LaPointe CBC Ombudsman

Esther Enkin, Executive Editor, CBC News
Jennifer McGuire, General Manager and Editor in Chief, CBC News


Anonymous said...

Oh wow! "He said / she said" CBC beeswax.

If CBC's truth-standard is reporting what voices-in-opposition say, so be it.

If CBC's truth-standard is to report verifiable facts of business income, income distributed and taxes payable, then CBC would have reported that the Minister of Finance told falsehoods -- which explains why he blacked-out data in his submission to the Finance Committee.

Ah... pass me the remote. I wanna see some real public broadcasting.

Brent Fullard said...

I received a short follow up response from the CBC's Ombudsman, and I replied with the following:

Mr. LaPointe:

The simple fact is the the CBC repeated the government's lies about tax leakage in its reportage of February 2010, as if these false claims were the truth and used Professor Booth as the government's convenient surrogate to promulgate these falsehoods, when every reputable organization in the country at that point in time had debunked the government's claims as being false ( and therefore fraudulent).

In doing so the CBC proved itself oblivious to all that had gone on to debunk these false government claims in the three years that has elapsed between when they were first advanced (October 31, 2006) and the date of your reportage. It's as if the CBC had been asleep for those three and half years?

Furthermore. no mention was made in the CBC's reportage about the fact that the government had never proven this central premise of its income trust policy and that the government's only "proof" of tax leakage took the form of 18 pages of blacked out documents issued under the Access to Information Act that the government subsequently demanded be returned.

To consider this proper journalism or serving any public good would be wrong on your part and contrary to the role that Canadians expect of its public broadcaster.

In your investigation of this matter did you speak to any third parties or did you simply speak to the complainants and employees of the CBC in order to determine whether the CBC gave this matter proper journalistic treatment?

BTW: When I was being interviewed by Havard Gould he had no clue what the meaning of deferred taxes was. His eyes glazed over when I discussed the matter with him and demonstrated no professional curiosity in learning more about it. The importance of deferred taxes to the question of alleged tax leakage is that the government concocts its false argument of tax leakage by leaving out all the deferred taxes that it collects from income trusts in RRSPs. I don't know how Havard Gould qualifies as the CBC's business reported if he does not understand something as basic as deferred taxes and shows no willingness to learn about concepts that are part of his assigned field. This might support the thesis that CBC's pathetic handling of this topic is attributable to incompetence, rather than being commercially or politically conflicted.

Either way, the outcome is unacceptable.

Yours truly,

Brent Fullard

Bruce Benson said...

Brent all I can say is that it was truly a hatchet job. The CBC's says it modified its journalistic standards and practices since your complaint. It’s funny that the CBC did not state what those changes were. So much for making these unknown changes retroactive or backward compatible. It was nice of them to let you know that your (our) written complaints were well investigated. What a laugh. I want to let you know the CBC is now on my least watched list. Their failure to report the truth and to mislead Canadians shows a total lack of any integrity. I am not sure if it was incompetence but I agree with you when you said they were politically and/or commercially compromised. The master censors are still hard at work. Thanks Brent for all you have done. It was an honour to assist you in our quest for fairness.

Dr Mike said...

Havard Gould was not the only one with glazed eyeballs. I talked to several MPs & business reporters from other media outlets & I ended up with the same reaction whenever I attempted to offer some enlightening discourse on the trust file.

Guys like Terry Corocran kept referring to RRSPs as tax exempt when even a first year university business student knows they are tax deferred. Incompetence or dictated misinformation like that is hard to battle.

I am sure Jim Flaherty & Mark Carney were depending on a general ignorance & a certain level of disinterest within the media , the public & within elected officials to aid them to ram thru this trust tax.

Even when some of us got close to the truth they blacked-out pages & recalled them to keep this under wraps.

The CBC was just one more pawn in this story.

Maybe if there had been a threat to withdraw their public funding they would have been more interested in the truth.

Dr Mike Popovich.

Anonymous said...

One of the points that doesn't seem clear to me is that there was no mention in the Ombudsman's letter about double taxation. My understanding is that the the Trusts will be taxed at two different levels--the corporate level and the investors' level. I believe it is something like 31 1/2% at each level, which adds up to 63%. Wow! That is a lot of money. Is that fair? And for that they don't even let you know why. They give you 18 pages of blacked out notes as an explanation. Duh.... BB

Anonymous said...

There's something rotten in Canadian news reporting. But there's other rot in Canada that stinks even more.

In any other major industrial and democratic country, it would be a major news story if the nation's chief financial officer were to lie before a committee of the Parliament or Congress. And then it would be an even bigger story, if the the nation's chief financial officer were to take publicly available information at SEDAR and black-out the story on grounds of national security.

But in Canada these are non-stories. Except for one thing, I'd be disgusted at CBC.

The one thing is that CBC is smart enough to know that Canadians are so stupid as to not care that their stinking Finance Minister has told to them falsehoods.