CWA Canada hails Competition Bureau raid of Postmedia-Torstar, says feds should block newspaper swap deals

CWA Canada welcomes a federal investigation into November’s newspaper swap-and-close deal between Postmedia and Torstar, but worries it comes far too late to fix the damage done.

“It’s nice to see the Competition Bureau finally barking, but it’s hard to imagine there will be much bite,” CWA Canada President Martin O’Hanlon said.

“The damage has been done, the papers are dead, and they’re not likely to be resurrected.”

“But hopefully the bureau will surprise us and do something, including action to end these swap-and-close deals that have been disastrous for so many communities.”

Agents of the bureau, accompanied by police, raided the Toronto headquarters of both companies Monday and executed search warrants.

Commissioner John Pecman confirmed that the bureau “is investigating alleged anti-competitive conduct contrary to the conspiracy provisions of the Competition Act” as well as those governing mergers.

The two publishers traded 41 newspapers — the majority of them in Ontario — and then shut most of them down, with a loss of almost 300 jobs. Many of the closures reduced or eliminated competition between the two companies in certain markets.

Pecman said that, if the bureau determines there has been a violation of the Competition Act, “we will not hesitate to take appropriate action.”

The Globe and Mail reported that remedies can range from dissolving a merger or altering it “so that some assets or shares of assets are required to be sold off to a competitor.”

The conspiracy provisions of the act allow for either or both a fine of up to $25 million, and up to 14 years in prison, but there’s a higher bar for conviction.

With the closure of the Barrie Examiner, it means that city no longer has a daily newspaper. Only four daily papers involved in the deal are still operating: Niagara Falls Review, Peterborough Examiner, St. Catharines Standard and Welland Tribune. (CWA Canada represents workers at the Peterborough Examiner.)