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Category: Chairman’s Desk

Facebook users not yet ready to walk away despite troubles

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This column originally appeared in The Toronto Star on February 24, 2019.

Not all that long ago, certainly in my lifetime, Ma Bell, as she was affectionately known, was a communications powerhouse; ever-present with an absolute monopoly over our American neighbours’ telephone service.

By the 1980s the American Bell System — which spawned our very own Bell Canada — generated over $70 billion US in annual revenues and employed a million people.

That was, of course, until the United States Department of Justice brought forth an antitrust suit, which led to the dismantling of the biggest corporation in American history.

It happened once. And, watch, it just might happen again.

In the early days of the internet, connectivity was viewed as the great equalizer: Democratizing publishing, rendering geographic distance inconsequential, upending established power structures and disrupting traditional business models.

But as the internet has grown and matured, the outcome has been just the opposite. The result? A dangerously small number of corporations have come to monopolize our digital lives.

Attention is the single most important commodity in the digital economy. And the absolute titan in that regard is Facebook. After YouTube and Facebook, among the most-used platforms are WhatsApp, Messenger, and Instagram, with 1.5 billion, 1.3 billion, and 700 million users apiece.

And guess what? All three are owned by Facebook.

So, how has Facebook — a single company — been allowed to accumulate so much of the market share?

The truth is, internet companies operate in a field that is scarcely understood by either customers or regulators. But more than that, in any match between Big Government and Big Technology, Big Tech always wins.

And so, between the novelty of the product, the ignorance of the consumer, and the absence of government regulation, a $445-billion company has been able to take deep root.

However, that era of unimpeded growth may be coming to an end. The aftermath of the 2016 U.S. presidential election brought with it an acknowledgement that these platforms were effectively weaponized by hostile foreign powers. The unprecedented accumulation of personal data by these companies has created all manner of potential liabilities, and foreign interference in elections is only one example.

The consequence is that a new level of scrutiny has begun.

The Canadian government has announced a panel of civil servants has been deputized to watch for foreign interference during an election campaign.

The federal parliamentary committee on privacy and ethics has made 26 recommendations that would block hate speech, limit surveillance, and protect user privacy.

And, just this week, Democratic Institutions Minister Karina Gould testified before the procedure and house affairs committee, suggesting a critical examination of the role of social media in democracies with a view “to hold[ing] the social media companies to account.”

In the U.K., a select committee of the House of Commons issued its final report on the inquiry into disinformation and fake news. Among the committee’s findings, Facebook intentionally and knowingly violated privacy and anti-competition laws.

According to the report, “big tech companies must not be allowed to expand exponentially, without constraint or proper regulatory oversight. But only governments and the law are powerful enough to contain them. The legislative tools already exist. They must now be applied to digital activity, using tools such as privacy laws, data protection legislation, antitrust and competition law.”

Since the beginning, missteps were priced into Facebook’s success. Mark Zuckerberg’s motto was “move fast and break things.” Surely, that wasn’t intended to extend to the public trust.

Short of antitrust action, Facebook’s gravest threat may well be that the user — of what is ultimately an advertising business, and therefore the product — will eventually grow bored of the service or weary of scandal and walk away.

Polls tell us the public professes to be concerned about digital privacy. And yet, when Facebook announced its annual results last month, after a bruising year of drip, drip, drip revelations of questionable conduct from Cambridge Analytica to accusations of fomenting genocide in Myanmar, usership was actually up across the board, in every region of the world.

All of which, of course, asks the question: so long as users are not prepared to abandon Facebook, how much political capital will governments expend on policy prescriptions to regulate it?

Jaime Watt is the executive chairman of Navigator Ltd. and a Conservative strategist. He is a freelance contributor for the Star. Follow him on Twitter: @jaimewatt

The case for protecting SNC-Lavalin

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This week has shown the Canadian public is resolved in its belief that politicians and public servants must, at first instance, be up to no good.

Take the so-called scandal around the SNC-Lavalin matter, and the emerging consensus that the government has misbehaved from the get-go.

I don’t believe this to be true. I think that an important and strong public policy case can be made for the use of remediation agreements — better known as a deferred prosecution agreements or DPAs.

The DPA is a legislative tool, long available in the United States and Britain, to be used when an organization is charged with an economic crime and where the consequences of proceeding with the prosecution could cause major job loss, harm pensioners, or even trigger an economic downturn on a national or international scale.

The DPA is entered into as an alternative to prosecution and typically forces the company to pay hefty fines and comply with strict conditions over an extended period of time.

In the United States, DPAs became a favoured tool following the investigation and subsequent collapse of auditing giant Arthur Andersen. The prevailing narrative is that the company’s criminal indictment served as a “corporate death sentence” that caused the loss of 75,000 jobs and had a ripple effect throughout the U.S. economy.

The DPA is no peace bond for a run-of-the-mill petty thief. The decision is an extraordinary one, requiring the delicate balancing of the legal, social, and economic impacts of forcing a trial and, potentially, a conviction against a company that provides jobs, benefits and pensions to thousands.

In the case of SNC-Lavalin, Canada faces the very real threat that one of its top companies and employers will move, sell, or disappear if they are subject to a conviction. At the very least, they would be forced to shed a significant number of jobs as a result of their long-term disqualification from public sector infrastructure projects.

And yet, in the deepest depths of the 2018 budget bill, the government opted to hand these fateful decisions to some poor federal prosecutor. And that was the mistake.

The question must be asked: Is this a decision that a prosecutor — and a prosecutor alone — should make? Is it sensible to expect a group of government lawyers, acting alone, to credibly assess the collateral impacts of pushing ahead with a prosecution?

Looking back, and yes, political hindsight is most certainly 20/20, the devilish details of last year’s budget bill have made all the difference. By placing these super-charged decisions on the shoulders of the ill-equipped federal prosecution service, it was a near-certainty that this day would come.

The government, of course, did itself no favours when it introduced this policy on page 555 of an impossible-to-digest budget omnibus bill, but sketchy parliamentary tricks should have no place in evaluating the effectiveness of the legislative tool itself.

In the U.S., it is apparent that executive decision-makers typically play a more direct and upfront role in the negotiation of such agreements. That was the case in 2012, when then-U.S. Attorney General Eric Holder agreed to have his Justice Department enter a DPA with U.K.-based HSBC to resolve fraud charges.

The settlement avoided a prosecution, which experts advised Holder would have had a profoundly negative impact on the national, and potentially the global, economy. As part of the process, Holder received input and advice from the likes of the U.S. Treasury Department.

Our “made-in-Canada” approach does not allow for executive-level participation in this way. That, too, is a mistake, and where we have missed the mark. Arguably, it is the reason we are currently embroiled in a full-blown national political storm.

This is not to suggest that these decisions should be political ones, alone, driven by partisan considerations, alone. But surely we can all agree that the decision to place thousands of Canadian jobs in jeopardy requires a nuanced view of enterprise-wide jeopardy and should not be bound by a slavish adherence to the principle of prosecutorial independence.

Jaime Watt is the executive chairman of Navigator Ltd. and a Conservative strategist. He is a freelance contributor for the Star. Follow him on Twitter: @jaimewatt

Don’t forget MP Paul Dewar’s message of inclusiveness

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The article originally appeared in the Toronto Star on February 10, 2019.

With Paul Dewar’s way-too-soon death, on Wednesday evening, Canadians lost a giant. A gentle, principled, passionate giant. A giant who dedicated his very life to the service of others.

There will be no shortage of epithets for Paul, but he would likely choose to be remembered for his honest and authentic engagement with his constituents, and for his commitment to their priorities; a commitment that never once wavered.

He will also be remembered as that rarest of parliamentarians: one who, while holding firm to his beliefs and loyalty to his party, set an example of civility and multi-partisan co-operation.

Many a Sunday, for example, I would hear from him about this column.

Dewar’s political career was forged in the long shadow of his mother, Marion Dewar, who served as Mayor of Ottawa from 1978 to 1985. Marion led Project 4000, which saw the establishment across Canada of over 7,000 private sponsorship groups for refugees of the Vietnam War. Her initiative influenced the federal government to increase Canada’s refugee acceptance quota from 8,000 to 60,000.

Paul often spoke of how his mother shaped his view of politics, so it is unsurprising that Dewar’s career was marked by a commitment to social activism and a belief in the potential of politics as a force for good.

After graduating from Queen’s University, Paul taught Ottawa students with special needs, and then worked as an organizer for the Ottawa-Carleton Elementary Teachers’ Federation.

In 2006, he ran as the NDP candidate for Ottawa Centre, and was elected to the House of Commons. His colleagues always commented on Dewar’s commitment to his constituency, noting that he would attend community meetings even when they did not directly pertain to his responsibilities.

He had a collegial working relationship with his provincial counterpart, Liberal MPP Yasir Naqvi, another instance of his pragmatism over party.

In his role as foreign affairs critic, Dewar was a loud voice for social justice around the world, and a champion for human rights. He pushed the Harper government to denounce nations with homophobic agendas, as in the cases of Russia’s anti-LGBT legislation, and Uganda’s 2014 Anti-Homosexuality Act.

Dewar also criticized the downsizing of Canada’s role as peacekeeper, which he saw as crucial to our country’s engagement with the international community.

At the time of his appointment as critic, foreign affairs discourse in the House was dominated by John Baird and Bob Rae. It is a testament to Dewar’s graciousness and decency as a politician that he established strong working relationships with both men.

It is not often that a friendship of this kind develops between a minister and a critic. And yet, Minister Baird made a point of inviting Dewar to travel with him to the Middle East. The two also worked together on issues facing their neighbouring Ottawa ridings.

When Paul found out, in 2018, that his cancer was terminal, he did not retreat into his own problems. Instead, he devoted himself to Youth Action Now, an initiative that supports and provides funding for youth-led initiatives. Thanks to his work, a new generation will be introduced to the principles which drew him to public service.

In November, Dewar accepted the Maclean’s Parliamentarian of the Year Lifetime Achievement award, and in his acceptance speech he struck a tone of collaboration. Speaking to the assembled politicians and journalists, he asked the crowd to remember the moment that first drew them to political work. He then asked them to turn to their neighbours and spend two minutes sharing their initial aspirations and ideas of what can be accomplished through public service.

“Is it not time,” he asked, “to take off the armour of our political party and work together as people representing citizens to build a better country for everyone?”

Paul’s message has never been truer than it is today. As we reflected when George H.W. Bush died earlier this year, there is no limit to what we can accomplish when we put differences aside and work together.

We could offer Paul no better final mitzvah, as our Jewish friends would say, than to heed this lesson as we go into the next election.

Jaime Watt is the executive chairman of Navigator Ltd. and a Conservative strategist. He is a freelance contributor for the Star. Follow him on Twitter: @jaimewatt

Parties have work to do as election hits home stretch

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Earlier this week, members of Parliament must have felt somewhat disoriented as they returned for a final session in their familiar, yet entirely new, surroundings. The House of Commons chamber has been relocated, albeit temporarily, to a spectacular new space in the West Block Courtyard.

But more than just adjusting to a different home, each of the parties must now come to grips with the notion that this session, the last before the next federal election, will be a different one as well.

And that means somewhere between the cut and thrust of politics as usual, Prime Minster Justin Trudeau and Conservative leader Andrew Scheer must now turn their minds to what it will take to win the next federal election; one that’s literally around the corner.

In the life of politicians, election years are always marked with distinct and different characteristics. Yet, each has one thing in common: there comes a point when time becomes a politician’s chief opponent.

October will arrive in the blink of an eye and they all have much to do. Typically, the government of the day has the upper-hand. There is, of course, a distinct structural advantage in being able to both set the frame of debate and use the machinery of government to drive and deliver your point of view.

That said, the prime minister is finding out former U.K. Prime Minister Harold Macmillan was right when he said what worried him the most in politics was, “events, my dear boy, events.”

One needs to look no further than the Meng Wanzhou extradition fiasco for proof.

And while it is true that, for most Canadians, foreign policy issues are seldom determinative of their final vote, this matter touches a much broader and more troublesome range of issues for the government: general competence, economic prosperity and old-fashioned Canadian pride.

And so, the prime minister knows he won’t simply be able to run out the clock. Sunny ways, alone, won’t suffice. No, Trudeau will need to give Canadians a reason to return his party to power.

In 2015, the Liberals ran on a platform that not only excited voters but, in the view of many, stood in stark contrast to a tired, negative one offered by Stephen Harper.

I don’t agree that, by and large, governments defeat themselves. Rather, I think they are elected to do a job and once that job is done, they are required to return to the electorate to articulate just what job they are going to do next.

So, prime minister, what do you have in mind? How will you showcase renewed energy and optimism?

And how will you do it while facing a Council of the Federation that’s very different than the one you met when you first came to office?

Premier Wynne is gone. Clark, Gallant, and Couillard, too. And with them, their Greek chorus.

The challenge for Team Trudeau will be focusing their priorities and agenda during the session ahead and doing so on a playing field that is not the same as it once was.

How could it be? That was before Brexit (or no deal), Trump, irregular immigration, and the all too public diplomatic spats with Saudi Arabia and China.

As for Scheer, Conservatives know they need to significantly broaden their base of support. Reaching out to millennials and urban voters will be critical as the coalition that led to their majority mandate in 2011 no longer exists.

Scheer will work hard over the coming months to convince us that Trudeau is out of touch with everyday Canadians. Simultaneously, he will have to present a clear picture of how he will make life better — materially better — for everyday hard-working Canadians. He will have to put more on offer than just trained seal-like opposition to every Liberal promise or decision.

For example, in 2015, an alternative to Trudeau’s energy and climate change strategy did not exist. And unless you consider the status quo a strategy, one still doesn’t. That must change.

And, finally, what does it say about my New Democrat friends, that a column looking ahead to this year’s election contains nary a mention of Mr. Singh? A lot.

Jaime Watt is the executive chairman of Navigator Ltd. and a Conservative strategist. He is a freelance contributor for the Star. Follow him on Twitter: @jaimewatt