To understand the ongoing war between Quebecor and the CBC, you have to understand a bit how television works in Quebec.

In English Canada, the conventional television networks make money by buying popular American series, running them during prime time and selling commercials. It takes little effort, and brings in a lot of reward. The CBC, meanwhile, does its best to produce original series, but few of them have a chance competing against the big American shows, so CBC falls significantly behind in the ratings. (Actually, overall CBC is No. 2 in prime-time behind CTV, thanks to powerhouses like Hockey Night in Canada.)

In Quebec, things are different. Francophones here like to watch things in their own language, so American shows aren’t as popular as home-grown ones. (Generous government subsidies helps here too.) While the networks do bring in American shows, have them dubbed and aired during prime time, the big shows are original productions. So Radio-Canada television can be commercially competitive and very Canadian at the same time.

In Quebec, the two big players in television are Radio-Canada and Quebecor’s TVA network. Télé-Québec and V, the other conventional networks, fall in with specialty channels like RDS, Canal Vie, Canal D, etc. in a secondary tier.

So when TVA looks at the competition, it looks at Radio-Canada. And there’s this annoying little fact at the back of its mind when it takes that look: Radio-Canada has a competitive advantage given to it directly by the government.

Billion-dollar leg-up

Radio-Canada, along with the CBC, gets $1.1 billion annually from the Canadian government, as the public broadcaster. That money is spent on all sorts of things, but particularly radio and television programming. Because both CBC and Radio-Canada sell advertising for their television stations, the giant subsidy effectively covers the loss they incur by spending much more on production than they get in ad revenue.

Imagine being in any other business where your biggest competitor is handed a truckload of money from the government every week. Imagine that business then lowered its prices to below cost, and had the government cover that loss.

I’m not saying I agree with the organized campaign against CBC and Radio-Canada being put together by Quebecor’s media outlets. For one thing, I’m not crazy about a bunch of journalists working for one company engaging in a campaign against their employer’s competitor.

But I do understand the basics of the argument: The CBC is at an unfair competitive advantage compared to private television networks. It’s an argument that doesn’t really work in the rest of Canada because the CBC doesn’t really compete with CTV and Global. But it does work in Quebec, because Radio-Canada and TVA compete directly with each other.

The “CBC sucks” Network

In case you’ve been living under a rock for the past year or so, Quebecor has been targetting the CBC. Journalists at Sun Media file tons of access to information requests against the public broadcaster – an average of more than one a day in 2007, so much that the CBC asked the government to step in because so many requests were coming from the same source. Columnists attack the CBC at the slightest whim, while staying silent on anything negative about Quebecor.

Sun News Network has been particularly vicious. “CBC Money Drain” appears in the generic opening of one of its prime-time shows, and segments about media criticism focus mostly on the CBC, which it refers to as the “state broadcaster”, despite how ridiculous that comparison is. Sun News has repeatedly called for privatization or shutdown of the CBC and Radio-Canada.

The public broadcaster has so far reacted in kind of a mixed way. It defends itself, but politely. It calmly explains its role as a public broadcaster to those who ask. It responds to a flood of access-to-information requests from Quebecor media outlets by posting all the documents online. It sends letters to the editor correcting bad facts and incorrect assumptions.

In recent months, there has been a bit more directed directly at Quebecor. Sarcasm, for one. Or taking its case to third parties, like this letter sent to The Gazette, which the CBC accused of falling for Quebecor’s misinformation. (UPDATE: Quebecor’s Serge Sasseville emails me to point out his response to that letter, also published in The Gazette)

The gloves come off

It’s only this week that the CBC has, in the words of some of its defenders, taken the gloves off and fought back hard against the Quebecor machine. It released a statement on Wednesday attacking their anti-CBC talking points. That got attention from such news outlets as the Globe and Mail, and lots of play on social media.

It also prompted an angry response hours later from Quebecor, taking on the anti-talking-points point by point. (UPDATE Oct. 21: A second press release from Quebecor, threatening legal action if the CBC page isn’t taken down)

This was a day before Quebecor boss Pierre Karl Péladeau appeared before a committee looking into the CBC’s refusal to disclose information requested by Quebecor journalists. There, Péladeau denies waging a war against the CBC, but says it has to be accountable. (See coverage from Globe and Mail, Canadian Press, Ottawa Citizen)

So who’s right?

While many people who instinctually love the CBC and hate Quebecor cheer at the Mother Corp fighting back, I find myself a bit disappointed. It feels like the CBC is sinking down to Quebecor’s level, and many of the facts they put out have the same problems when it comes to lack of context or oversimplification.

Let’s take a look at the arguments from each side individually:

Quebecor Media is waging a coordinated war against the CBC: Péladeau denies this. But he does so in sort of a self-contradictory way. Péladeau claims that his journalists work independently, without anyone telling them what to do. But then he says his journalists have never sought journalistic sources. How does he know this? How can he pretend to speak for his media empire if he says his journalists act independently?

It’s obvious that Quebecor’s outlets, particularly Sun News, Sun papers and the Journals, have a beef with the CBC. Whether that’s because of corporate edict or just because those outlets hire like-minded people as journalists is up to the public to decide.

Quebecor’s access-to-information requests seek journalistic sources: I’ve yet to see a proper accounting of exactly what requests Quebecor have filed that have been denied, so I can’t answer this question. I suspect it’s more subtle than this, and the problem comes down to a matter of interpretation. The CBC can deny requests for information about its “programming activities”, for example, but how far does that go? Is Rick Mercer’s expense account fair game? Don Cherry’s employment contract? The CBC’s deal with the NHL? Quebecor denies it is asking for the identities of the CBC’s Deep Throats, but compares its requests to asking for lunch receipts of senior executives, information which is already posted online.

The CBC is using taxpayer money to hire lawyers to fight transparency: Well, yes. Specifically, they’re fighting the access-to-information commissioner, arguing that only a judge should be able to determine what information should be released. I don’t agree with this, but the argument that the CBC shouldn’t use lawyers because they’re taxpayer-funded is ridiculous. The alternative would be to cave in to every demand, no matter how damaging.

CRTC chair Konrad von Finkenstein has called for the access-to-information law to be clarified. The CBC also says it is trying to clarify the rules, rather than admit they’re fighting them.

“Quebecor has received more than half a billion dollars in direct and indirect subsidies and benefits from Canadian taxpayers over the past three years, yet it is not accountable to them.” The CBC links this statement to a presentation (PDF) that breaks down that figure. By the CBC’s own numbers, more than half of that “half a billion dollars” is their calculation of how much Quebecor “saved” in the last spectrum auction because it bid on frequencies that were set aside to new entrants into the wireless market. The figure is based on the assumption that if Bell, Telus and Rogers were not prevented form bidding for those frequencies, that they would have gone for as much as the frequencies not set aside for new entrants were sold for. That’s a big assumption. And even if we accept that, calling this a “subsidy”, even an “indirect” one, is a big stretch.

The rest of those subsidies are things like the Canada Media Fund, the Local Programming Improvement Fund, and government tax credits for TV production. All of these are things that CBC programming is also eligible for, and is above the $1.1 billion annual subsidy from the Canadian government.

Plus, the CMF and LPIF are funded primarily by cable and satellite companies like Videotron, not by the federal government. Quebecor points out that Videotron pays slightly more into the media fund than TVA takes out of it, which means Quebecor is subsidizing the CMF, not the other way around.

I get the point that Quebecor receives public money too, but the CBC’s figures are exaggerated.

Quebecor complained to the prime minister that CBC wasn’t taking out ads in its newspapers. Quebecor said it was “false” to say they’ve complained about the lack of advertising, then proceeded to complain about the lack of advertising. Péladeau testifed on Thursday that in fact a letter was sent to the prime minister complaining about the lack of newspaper ads. (UPDATE Oct. 21: A similar strange reasoning appears in the legal letter Quebecor sent CBC: Saying the statement is false and then repeating it in different words. Maybe there’s a difference I don’t understand?)

The truth is that both Quebecor and the CBC are engaged in a boycott of each other. There are no ads for the Journal de Montréal on Radio-Canada either. It’s not absolute, but there’s a big difference in advertising buys when you compare TVA to Radio-Canada, or La Presse to the Journal de Montréal.

Quebecor Media is also owned by the government. This logic is based on the fact that the Caisse de dépôt et placement du Québec, the government’s investment arm, has a 45% stake in Quebecor Media, dating back to when Quebecor bought Videotron. This is a big stake, but still a minority one, with Quebecor Inc. having the rest. The big distinction here is that the Caisse is an investment organization that puts money in companies expecting a healthy return. The government isn’t funding Quebecor Media as much as Quebecor Media is funding the government through its profits.

The Quebecor war machine

It’s funny how all the big public media wars in Canada involve Quebecor. It’s at war with the CBC over access to information. It’s at war with Bell over specialty channel carriage (even though Bell has gotten a major competitor to vouch for its fairness). It’s at war with La Presse over the secret deal it imagines Gesca has with the CBC. It’s at war with Transcontinental over community newspapers.

If I was paranoid, I’d think Quebecor just likes picking fights.