Volume 7, Number 1

WAL-MART: FIRST IMPRESSIONS

ON JANUARY 14, 1994 WAL-MART ANNOUNCED it was buying 200 Woolco stores. The Globe and Mail's headline read: "Wal-Mart roars into Canada." The Vancouver Sun announced the buyout with the headline: "Wal-Mart's presence doesn't always bring joy." In the Calgary Herald the headline declared: "Wal-Mart snaps up Woolco"; the Winnipeg Free Press announced the deal by saying "A shark in retail waters."

For many Canadians, especially those who haven't zipped across the border to shop in Wal-Mart stores in the U.S., media reports of the Woolco buyout may have been the first they heard of the retail chain. An ominous first impression was left by the tone John Heinzl of the Globe and Mail took when he wrote: "The worst fear of Canadian retailers became a chilling reality yesterday when Wal-Mart Stores Inc., the world's largest and most powerful merchant, announced that it is invading Canada by swallowing 120 Woolco stores." In contrast, Eleanor Whyte writing for Canadian Press and published in the Vancouver Sun, the Montreal Gazette and the Regina Leader Post began her story: "After Wal-Mart founder Sam Walton died in 1992, 15,000 shareholders bid him a teary farewell at the company's annual meeting." The Calgary Herald's Carol Howes was less theatrical saying: "Attention Woolco Shoppers! U.S. discount giant Wal-Mart Stores is moving into Canada--and it's expected to revolutionize the retail industry."

CBC provided more alarmist coverage than CTV. Pamela Wallin introduced the story saying: "An aggressive American retailer is moving North. Wal-Mart is taking over about 120 Woolco stores right across Canada. Wal-Mart is a powerful chain that sells everything from soup to shoes. It offers consumers lower prices and often drives competitors right out of business." In contrast, CTV's Lloyd Robertson announced: "There's going to be a new kid on the Canadian retailing block, the American department store giant, Wal-Mart. Actually, Wal-Mart's no kid. It's been around since the early '60s and it's a pretty tough outfit when it comes to beating the competition. The deal is essentially this: most Canadian Woolco stores will become Wal-Marts. And, as CTV business editor David Stewart-Patterson reports, it's the biggest deal to hit the Canadian business scene in a long, long time."

Apart from the introductory remarks regarding Wal-Mart's purchase of Woolco, how did the Canadian media characterize the deal? The National Media Archive examined the initial Wal-Mart stories of 14 news agencies, which included the national newscasts of CBC and CTV, Maclean's magazine and most of the country's major dailies. Two major themes were assessed: the discussion about Wal-Mart, and its impact on its competitors. Many differences were observed between cities and media outlets.

Click here to view Figure A: Assessments of Wal-Mart

Wal-Mart given high marks for prices/customer service

In general, the media analyzed were positive about Wal-Mart's ability to provide low prices and its commitment to customer service. However, Betrand Marotte of the Calgary Herald, the Telegraph Journal and the Ottawa Citizen; Kelly Taylor of the Winnipeg Free Press; the Globe and Mail's John Heinzl and Barbara Wickens from Maclean's were consistently more critical than positive with their assessments of Wal-Mart. While all acknowledged the low prices, these journalists distinguished themselves by portraying Wal-Mart as a cut-throat organization, destroying other businesses and engaging in predatory pricing. For example, Bertrand Marotte's article noted: "`When Wal-Mart enters a local market, it tends to take away market share from local competition and outprice everybody,' said Janet Managno, retail analyst with Burnham Securities in New York." He continued: "It is so big that it has struck fear into some small-town retailers and residents." Marotte recounts how towns in New England have tried to stop Wal-Mart from entering its communities.

In contrast, the Victoria Times-Colonist, Eleanor Whyte of the Vancouver Sun, Mairi Maclean of the Edmonton Journal, Jeff Heinrich of the Montreal Gazette, Gord Brock writing for the Regina Leader-Post, and Maureen Murray in the Toronto Star emphasized the positive rather than negative components of the retailer. For example, a report from the Victoria Times-Colonist news services stated: "Peter Hume of Ian Thomas Consultants in Vancouver said the company has set examples for other retailers. `They're a value-oriented department store that has rewritten the book in many areas.' He cited their leadership among retailers in customer satisfaction, empowering staff and training them well, `being extremely responsive to customer demands.'"

The Telegraph-Journal, CBC and CTV came the close to providing equal amounts of praise and criticism for Wal-Mart's operations.

Wal-Mart jeered for folksy Americana

In addition to the claims of predatory pricing, Wal-Mart was also criticized more subtlely. The Arkansas-based retailer was portrayed as the ultimate in American patriotism and questions were raised as to whether Canadians would accept this dose of Americana. For example, Barbara Wickens in Maclean's wrote: "Another challenge facing Wal-Mart is in the subtle cultural differences in its new place of business. Wal-Mart said that it plans to hire--and retrain --most of Woolco's current 16,000 Canadian employees. But Canadians are traditionally much more reserved than Americans. As a result, said Joan Pajunen, a managing director of the Toronto-based consulting firm, Service Dimensions Inc., Wal-Mart's new employees are less likely to buy into the pep-rally culture than their U.S. counterparts. `Can you imagine 50 or 60 Canadian employees standing there every morning with the hand on their chest, singing the national anthem?' said Pajunen. `I sure can't.'"

Contrast that story to the one written by Bruce Johnstone, the Regina-Leader Post's financial editor, who acknowledges the impact Wal-Mart has already made on cross-border shopping: "Cross border shoppers have long complained that service levels in Canadian stores are far lower than those in American stores. These may reflect cultural differences; they may also reflect the more competitive American retail market."

Canadian retailers portrayed as inefficient

Just as Wal-Mart was depicted as being efficient and competitive, Canadian retailers were given poor marks by the media for their inability to compete. Canadian retailers received surprisingly similar attention by the media we examined. All media outlets except for the Edmonton Journal emphasized the threat Wal-Mart poses to other retail chains such as The Bay, Zellers, Canadian Tire and Sears. Much was made of the stock prices of these retailers going down on the announcement of the buy-out. For example, Jeff Heinrich of the Montreal Gazette wrote: "But it will mean trouble for Canadian discount retailers like Zellers and Canadian Tire, who will be hard-pressed to beat Wal-Mart's service and prices. Their stock dropped after the expansion was announced."

Click here to view Figure B: Assessments of the Impact on Canadian Industry

The journalistic preoccupation with negativity was clearly demonstrated in the Woolco buyout story. Not only was Wal-Mart characterized as cut-throat and ruthless, but Canadian retailers were given little credit for their attempts in the past few years to become more efficient. In the end, all retailers lost out by this simplistic and unbalanced reporting.

Why Did They Say That?

IN THE COURSE OF WATCHING THE NEWS, MANY OF us wish that the reporter had asked a better question or had provided some additional information. It is with this premise in mind that we introduce our new column--asking the questions, or illustrating contradictions in stories we've seen reported. As we introduce this feature, this month's questions come from Fraser Institute staff. If you see or read a story you feel missed an important point, write or fax us, and if it checks out, it may appear in this column.

Which is to blame: government cutbacks or union regulations?

On January 10, 1994, CBC Prime Time presented a story on how health cut-backs were risking people's lives. Cathy Tomlinson reported: "All across Alberta, experienced nurses are being bumped out of operating rooms, to be replaced by nurses from other wards like psychiatry or paediatrics. The union contract says nurses with the most seniority must be moved into whatever jobs are left after layoffs. No matter what kind of experience they have. It's only one example of the fallout from government cutbacks. The Alberta government's deficit reduction plan includes cutting the health budget by almost a billion dollars. It's directed the hospitals to start cutting wherever they can, and it's put them under a very tight deadline. This hospital administrator says if the government would allow more time for cuts, the hospital could spend more time training new nurses."

Kristin McCahon asks the key question: why were government cutbacks highlighted and not the union contract that mandates seniority rather than skill level as the basis for deciding who stays and who goes? Instead, Cathy Tomlinson ended the story by saying: "Even if they lose their jobs for speaking out, the nurses say at least the public will know that cutbacks are compromising patient care."

What is the verdict on job sharing?

On February 2, 1994 the front page headline in the Globe and Mail read: "Costly program fails to save many jobs: Study says work sharing postpones layoffs, encourages inefficiency." The story, written by Barrie McKenna, cited an internal government audit that said, "the "291-page report found `no evidence' that work sharing has a lasting, positive impact on the profitability or productivity of participating companies."

Bev Horan wondered why the headline on the second page then read: "Work sharing positive overall." The positive aspects noted in the story were cast as "societal benefits." This focus on the societal benefits supported Human Resources Minister Lloyd Axworthy's suggestion that "the country consider a shorter work week and job sharing." The about-face in the story gave more credibility to Lloyd Axworthy's position than the auditor's report and indeed the first half of McKenna's story would support.

METHODOLOGY

The Year in Review includes CBC's Prime Time News, Sunday Report and Venture and the CTV National News from January 1, 1992 to December 31, 1992.

All occurrences of places and names with more than one meaning were examined in the transcripts. Common names such as Bouchard, Wilson and Smith were examined in order to ensure that they were not being mistaken for othe news sources.

Further information or details on the coding design and methods may be obtained by contacting the National Media Archive.

The First 100 Days: The Honeymoon Ain't Over Yet

AS REPORTED IN THE VOLUME 6, NUMBER 10, 1993 On Balance, during the federal election campaign television news treated Liberal leader Jean Chretien better than former Conservative leader Kim Campbell. Chretien was portrayed as a seasoned leader and his party got high marks for strategy and campaign performance.

Although the House of Commons has sat for only 10 of the first 100 days, the new Liberal government has been active. Because of the lack of debate in the House of Commons, the role of the media as unofficial opposition could not be more important. Was television news critical of the Liberals and their new policies or did they act as cheerleaders? Here is a brief summary of the more prominent acts of the first 100 days of the Liberal government and television's assessments of them.

EH-101 helicopter cancellation

Theme: First campaign promise fulfilled.
Fallout: High-tech jobs lost.
Overall emphasis: Tough decisions made, Liberals have credibility making difficult choices.

Chretien's first major decision was to scrap the EH-101 helicopter deal. The Liberals received a lot of criticism for this decision, mostly because it resulted in job losses. For example, CBC's Joe Schlesinger reported: "All this presents a challenge for Jean Chretien. He has promised to kill the program the moment he gets his hands on the reins of power this week. If he does, and there doesn't seem to be much doubt about it, the man whose number one priority in the campaign was job creation is likely to be accused of being a job killer, and not just by enemies, maybe even by some of his friends."

CTV's Holly Doan reported on the fallout over potential job loss, but also on the support Chretien had from his caucus: "In Mississauga, home of General Electric, newly elected M.P. Carolyn Parrish says: `The position of the Liberal party is to abandon the deal and I agree with it.' Halifax M.P. Mary Clancy says: `If my boss (Jean Chretien) says something, we go with it.' And in Winnipeg, where more helicopter jobs are at stake, M.P. John Harvard says: `If the government doesn't cancel it, then the story would be one of credibility.' Paramax, the main contractor for the helicopter project, is frustrated. Company officials trying to salvage the deal can't even get Liberals on the phone."

Reporters made credibility the principle issue

On the December 5, 1993 Sunday Report, Joan Bryden, Parliamentary correspondent with Southam News, in an interview with Wendy Mesley

". . . the man whose number one priority in the campaign was job creation is likely to be accused of being a job killer, and not just by enemies, maybe even by some of his friends."

made this assessment: "I mean, they have to do this. They have some very, very tough decisions coming up, that they're going to need some goodwill with the populace to get through. You know, if they're going to start doing some massive cutting to some of our cherished programs and our social programs, for instance, they need to have convinced people in advance that `We meant what we said, you can trust us, we're trying to do things that are in your best interest and build up a little faith between the people and their government,' and I think it's very important that they get that right off the top."

NAFTA

Theme: Chretien fights for water, energy and definition on subsidies.
Fallout: Little accomplished.
Overall emphasis: Did the best that he could.

One theme in the Liberal Party's election platform was the promise to renegotiate the terms of NAFTA. Immediately upon winning the election, Prime Minister Chretien made his case to U.S. President Bill Clinton. The White House was adamant that there were to be no changes in the deal. During the Seattle summit, Chretien modified his demands from wanting renegotiation on NAFTA to a clarification that water was not in the deal. The media noted that water was really not the point. For example, Joe Schlesinger of CBC reported: "And if Mr. Chretien and Mr. Clinton clarify that [water], then they get rid of a big red herring, and we can get on to more important stuff. As Chretien arrived in Seattle for his talk with Clinton, he did have more difficult issues to discuss with the American President. Their main business will be Chretien's insistence that his concerns about the definition of subsidies and dumping be met before he accepts NAFTA. The water problem does have one attraction for Jean Chretien over these other issues. It's the one problem on which he can take Bill Clinton to the water with the reasonable expectation that he can make him drink it."

Similarly, Ken Ernhofer of CTV News reported: "By talking tough, Chretien hopes to make some political capital, by showing how strongly he'll defend Canadian interests. Still, government officials doubt that water will become a major sticking point between Canada and the United States."

What was significant about the NAFTA coverage was how few critics emerged on national television news to discuss Chretien's inability to renegotiate. There were the token comments from Maude Barlow, Chairperson of the Council of Canadians, but on the whole the discussion centred on reporters' assessments of the political costs and benefits of his stance. For example, CTV's Ken Ernhofer reported, "Federal officials acknowledge this is one battle that Chretien seems doomed to lose, but how much that would hurt the Liberals is debatable. If Chretien stands his ground, he'd appease Canadian nationalists, but anger newfound Liberal voters in the energy-rich West, and foreign leaders might wonder about Canada's commitment to the deals it signs."

CTV's Leslie Jones was by far the most critical in her report: "While trade experts say the Chretien compromise was probably the best he could do, it is still not the re-negotiated deal he promised. The Liberals must now try to persuade Canadians that the changes are enough to warrant endorsing a deal that the party had voted against."

Despite Mr. Chretien's inability to fulfil the Liberal Red Book promise of renegotiating the FTA and NAFTA, he was not branded as a failure. Reporters covering the story made their assessments based on the public relations effort the Liberals would have to mount, rather than the merits of his proposals or even his inability to accomplish them.

Manufacturing Consensus: The Case of the RRSP Contribution Reduction

THE SUCCESS OF MANY GOVERNMENT TAX increases or spending cuts succeeds or fails on its ability to win the public relations war. For example, during the former-Conservative government's first term in office, it's inability to sway public opinion over its de-indexing of senior's pensions cost them an embarrassing reversal of their policy.

As a result of the highly-charged nature of spending cuts and tax increases, many governments and special interest groups plant seeds of various proposals to mobilize public support or opposition. One such measure which has slowly emerged is the proposal to lower RRSP contributions.

One of the first proposals to limit RRSP contributions that came to The National Media Archive's attention was during November 1993 when Campaign 2000 provided figures that child poverty was on the increase in Canada. Members of the organization claimed that rich people like Conrad Black were unfairly receiving tax breaks in their RRSPs that could better be directed towards combating poverty.

The acceptability of cutting RRSP contributions stems from two themes. First, by emphasizing that RRSPs benefit the wealthy, it becomes an acceptable change for the so-called average Canadian. The argument is that the country should be concerned with the poor and disadvantaged, not the wealthy like Conrad Black. The irony that Mr. Black actually has his permanent residence in London and is not a Canadian for current tax purposes escapes those who wish to invoke the image of the wealthy receiving benefits at the expense of the poor.

The second theme that emerged in the reduction of RRSP contributions is that it is an acceptable proposal because it takes from men rather than from women. In the February 5, 1994 Globe and Mail Margaret Philp reported: "Tax breaks on private pensions are also a public expenditure that appears to benefit men over women."

Ms. Philp emphasized that more men than women utilize the tax break and that on this basis alone they should be limited. What Philp did not emphasize was that there is no real gender bias in the RRSP contributions, more men than women simply chose to contribute to RRSPs. No mention was made of these men's marital status and whether in fact they were saving for the retirement of themselves and their wives.

What is excluded from the media coverage of reducing RRSP limits is that there was very little opposition to the idea. For example, Gina Mallet in the February issue of Canadian Business Magazine notes: "Eliminating them [RRSPs] altogether would be politically difficult but lowering allowable contributions is rapidly gaining favour." In fact, on February 11, 1994 Canadian Press reported that the Public Service Alliance called for contribution limits for RRSPs and pension plans to be reduced by one-third. In addition, the largest public-service union called for a tax of 5 percent on investment income earned under the pension plans.

There is . . . a silent resignation that the cut of RRSP contributions is inevitable.

While Mallet provides no evidence that lowering contributions is gaining favour, there is the sense that no one is complaining about it--at least in the media. Typically when the government mentions changing any area of public expense the media can be counted on to bring forward groups or individuals who are unhappy about the change. This has not happened in the RRSP issue. There have been no anecdotes about how people will suffer from this cut. There have been no protests. There has been little criticism of the proposal at all.

There is in fact a silent resignation that the cut of RRSP contributions is inevitable. Keith Morrison on the February 8, 1994 Canada AM accepted a cut in RRSP contributions as unavoidable in combatting the deficit and maintaining social programs. His commentary implied that nothing was out of reach for government in order to pay for social programs and start eliminating the deficit.

TV's Year in Review 1993: Jobs and the Economy Top Domestic Story

Jobs the Number One Issue

The constitutional debate that dominated television coverage in 1992 was largely forgotten as Canadians focused their attention on the central issues of the federal election campaign. As the election swung into high gear the Liberal party's campaign theme of "Jobs! Jobs! Jobs!" caught the attention of the television networks. Particular attention was paid to the thousands of low-skilled jobs that had permanently disappeared from the economy and specifically what the various parties had to offer in the way of job creation strategies and industrial policy.

Click here to view Table: Issue of the Year

Tax Coverage Increases

Coverage of taxation issues moved from seventh place on CBC to second place and moved up to third place from eighth on CTV. Much of the coverage can be attributed to major taxpayer unrest. Calls for fairness in tax policy and tax reform started to emerge as dominant themes in television news. CBC and CTV noted the high taxes Canadians pay. For example, CTV reported "while the typical Canadian family now has an income of more than $53,000, more than 40 percent goes to pay taxes. Figures show that the average Canadian tax bill has gone up by $1900 since 1984." On a provincial basis, Bob Rae's tax policies received the most network attention. The NDP budget, which featured the largest tax grab in the province's history, was extensively covered.

Debt/Deficit and Free Trade Major Election Issues

Canada's burgeoning debt/deficit crisis proved to be another top election issue, and in contrast to last year, was given significant television attention. Coverage of debt/deficit issues moved from ninth place to second place on CBC and placed third on the CTV. Free trade issues, including the GATT and NAFTA negotiations, were given more prominent attention than last year, and moved up from tenth to second place on CTV and ranked fourth on CBC.

Fisheries Coverage Takes Fifth Position

Consistent with our 1992 study on economic indicators, 1993 illustrated once again how the television media emphasized negative news stories. The collapse of the Atlantic fisheries issue was the fifth most discussed domestic topic of the year. The government solution and human interest stories were featured prominently.

Jean Chretien highlighted by CTV and CBC

Newly elected Prime Minister Jean Chretien placed first as the most prominent federal politician. CBC's coverage of the Liberal leader, as a percentage of the total mentions of the top ten politicians, rose from 6.4 percent in 1992 to 22.6 percent in 1993. Similarly, CTV's coverage of him for 1993 increased by one fifth over the previous year's 8.2 percent.

Click here to view Table: Top Federal Politicians

Kim Campbell Takes Second Place

Kim Campbell, Brian Mulroney's successor and Canada's first female Prime Minister, garnered a significant percentage of the television coverage. Campbell's leadership and election campaign received in-depth coverage by both networks.

Coverage of taxation issues moved from seventh place on CBC to second place and moved up to third place from eighth on CTV. Much of the coverage can be attributed to major taxpayer unrest. Calls for fairness in tax policy and tax reform started to emerge as dominant themes in television news.

Jean Charest Makes Top Five

Jean Charest, former Minister of Environment, and current leader of the Progressive Conservative party ranked fourth in both CBC and CTV coverage.

Preston Manning Remains in Top Five

The extensive television coverage Reform leader Preston Manning received demonstrated that his popularity with the press was not a fleeting phenomenon.

Lucien Bouchard Places in Top Ten For First Time

Both CBC and CTV gave prominent coverage to the separatist plank of the Bloc Quebecois and its leader Bouchard.

Ovide Mercredi Ignored

In 1992 Ovide Mercredi, chief of the Assembly of First Nations ranked third and sixth on the CBC and CTV respectively. With the shelving of the constitutional issue, television coverage of First Nations demands for self-government declined as well.

Audrey McLaughlin

Although the NDP fared poorly in the polls and in media attention generally, the election proved to bring the spotlight back to Audrey McLaughlin. Having placed tenth on CBC's, and absent from CTV's 1992 top ten, she ranked sixth and seventh of CBC's and CTV's top ten politicians for 1993.

Bob Rae top provincial politician

Coverage of Ontario premier Bob Rae increased in 1993, moving the premier from third position in 1992 to first place in 1993. Mr. Rae's controversial fiscal policies received close scrutiny from both the CTV and CBC. The networks provided detailed coverage of Ontario's sagging economy, especially the schism that developed between the NDP and labour over the social contract talks. Television news also highlighted Rae's one hundred million dollar corporate minimum tax, and the two billion dollar tax hike he implemented.

Click here to view Table: Most Discussed Premiers

Quebec's Robert Bourassa drops to number two position

Premier Bourassa's federalist platform and his fight against Quebec sovereignty were given prominent coverage in the early part of the year. The health of Mr. Bourassa became a national interest as the media focused its lens on the premier's battle against cancer. Mr. Bourassa's resignation September 14 during the federal election campaign and the subsequent speculation over who would replace him, also received significant television coverage.

Ralph Klein makes top four

Alberta continued in 1993 to receive significant coverage. Premier Ralph Klein placed fourth on CBC and third on the CTV. Mr. Klein's electoral victory in June was extensively dealt with, although most of the of the media's attention centred on the Tory's tough budget announced in May. Mr. Klein's Deficit Elimination Act, highlighted as the only of it's kind in the country, was cast as a major public policy issue by the networks.

info@fraserinstitute.ca You can contact us at the above email address for any comments or information requests. Please report any dead links or technical problems.

If you know someone who would be interested in this web page, please enter their email address below, and we will forward this URL to them: Email Address:

Last Modified: Wednesday, October 20, 1999.