Online News Act threatens Canadian press freedoms, warns senator

‘Honest to god, I really feel like this is written by people who have never used the internet’
Photo: Senate speech screencap
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A Canadian senator is sounding the alarm that new government legislation could fundamentally compromise longstanding press freedoms and independence. Bill C-18, the Online News Act, would force Google and Facebook to enter funding arrangements with Canadian news media, and in so doing would hand unprecedented oversight to the country’s telecommunications regulator.

Paula Simons tells Ricochet that she is “deeply uncomfortable” with the bill, which is on a path to become law by the spring.

The Canadian Radio-television and Telecommunications Commission (CRTC) would be granted new powers to regulate journalism organizations, including determining which Canadian news organizations qualify for these funding arrangements and whether an outlet adheres to what the bill describes as “the recognized processes and principles of the journalism profession.”

“Are we comfortable giving unprecedented regulatory powers to the CRTC to interfere in the business of print journalism and to require mandatory media codes of ethics, given that the free press has never before been subject in any way to the authority of the CRTC?” she asked on the floor of the Senate last month.

Simons was appointed to the Senate by Prime Minister Justin Trudeau in 2018, following a 30-year journalism career, much of it spent at the Edmonton Journal. Her coverage of Alberta’s troubled child-welfare system earned her recognition from the UNESCO Canadian Committee for World Press Freedom and Journalists for Human Rights.

Senator Paula Simons

“I don’t like Bill C-18. I think it’s bad public policy,” she told Ricochet. “And I do not think it will help Canadian journalism in the long term.”

At this stage, it’s possible that C-18 could be sent back to the House of Commons with suggested amendments. But if there are no amendments from the Senate, it’s likely to be law by June, she said. “It is a bill that is really controversial and not something we are going to rubber-stamp.”

Simons suspects that there has been little critical news coverage of the legislation because “Every newsroom is awkwardly situated. Ricochet could, in theory, benefit greatly from this bill, so how would that affect your coverage of it?” she asked.

While some individual journalists have raised serious criticisms of the bill, Simons points out that “the publications where the journalists work, however, are mostly supportive. The Globe and Mail, the Toronto Star, CBC, Postmedia: they’ll all benefit, in some cases hugely — which makes it hard to get fair and balanced coverage, because everybody has a dog in this fight.”

As a result, Michael Geist, the University of Ottawa's Canada Research Chair in Internet Law, said Canadians have not had a thorough debate about the bill. “No doubt that there’s been a blurring of editorial and business, especially among the major media companies, the companies that lobbied heavily for this bill, which has influenced the coverage… Postmedia runs op-ed after op-ed in favour of this.”

A lifeline for news media?

A loss of advertising revenue at media outlets across the country has led to fewer and fewer reporters doing less and less work, particularly at a local level.

“Now we have before us C-18, which is supposed to throw a lifeline to struggling news sites large and small, all across the country. The premise is intoxicatingly simple: Google and Facebook have lots of money!” Simons said, of the companies that together command 80 per cent of Canada’s online advertising market.

The bill requires the largest online platforms that index, aggregate, or reproduce news content — such as through search results or the hosting of links — to enter into agreements with news organizations to compensate them for doing so. If the platforms and outlets don't arrive at private side deals, they would become subject to a bargaining process and, ultimately, final-offer arbitration. Outlets would be able to bargain independently or in groups.

“The idea that we can or should force two American tech giants to underwrite the independent news upon which Canadians rely is a logical and ethical fallacy.”

Simons told the Senate that there are a number of critical questions yet to be answered.

“Realistically, how much will small, rural, ethnocultural, or Indigenous papers and radio stations actually benefit from this, even if they negotiate collectively?” she asked. “How much should the large players like Rogers and Bell Media be subsidized, or failing legacy firms like Postmedia, especially as it makes it harder for innovative start-ups to compete? Is it reasonable for the CBC, which is already funded by the government, to receive by far the largest share of this new money?

“What guarantees do we have that companies will spend their subsidies to increase news coverage as a net increase, as opposed to paying down debt or awarding their executives?”

Then there’s the question of what would happen down the road if Google and Facebook were no longer profitable? Simons told Ricochet that when she raised that question with staff in the Heritage ministry, she was told they “would turn to TikTok.”

“I said, ‘Wait a minute! TikTok doesn’t share news links,’” Simons recalled. “And staff said, ‘TikTok shares news stories in other ways. It talks about the news.’ I said, ‘Woah, wait a minute! That’s a fair-use argument.’…Then the official said to me, ‘Lots of Canadians get their news from TikTok.’”

Minister of Canadian Heritage Pablo Rodriguez
Twitter

But, she pointed out, if a content creator on TikTok talks about something they read, that’s not the same as actually sharing a news story.

There's a lot at stake, Simons said. If the scheme doesn’t work, it could “just accelerate the death spiral of the news industry in Canada.”

It is unclear how some news organizations would engage in a negotiation process. Simons questions whether it’s reasonable to expect small digital news outlets to have the political and legal bargaining power to enter into “agreements” with massive tech platforms. Hiring a lawyer alone could exceed the resource limit for some outlets.

Since it was first proposed, Google has campaigned against C-18 because the company disagrees with the bill’s measures to force it to pay publishers for their content. Meta, the owner of Facebook, which would also be forced to pay for news under the bill, has also threatened to block content in Canada.

In a show of what’s to come, last week Google blocked news content for a number of Canadian users in anticipation of the passage of Bill C-18.

The technology giant said the experiment is affecting about 4 per cent of Canadian users — more than one million people — and would run for around five weeks. In that time, Google will “limit the visibility of Canadian and international news to varying degrees,” Reuters reports.

Canadian Heritage Minister Pablo Rodriguez responded to Google by declaring that “Canada will not be intimidated.”

“The risk here is that [if it becomes law] there would be no Canadian news on Google at all,” Geist told Ricochet. “I see little hope that Facebook will continue offering news sharing if the legislation looks the way it does. News is a headache for them as it is.”

“The whole premise of the bill is ridiculous... Honest to god, I really feel like this is written by people who have never used the internet. The whole point of the internet is frictionless sharing of content.”

The Parliamentary Budget Officer estimates the program would bring in around $329 million per year for news organizations. Simons said she’s heard lawmakers suggest that C-18 could force Facebook and Google to pay for as much as 35 per cent of the operating costs of newsrooms, which she said she finds hard to believe.

“The idea that we can or should force two American tech giants to underwrite the independent news upon which Canadians rely is a logical and ethical fallacy,” she said. “Including tiny websites whose work is almost never shared or indexed on those social media platforms at all?

“More than that, I’m asking if it’s wise. How independent can the Canadian news media be if they are so deeply beholden to the good will and future economic success of two foreign corporations?”

Are Google and Facebook stealing links?

Simons said the bill is based on a fundamentally flawed understanding of how the internet works.

“The whole premise of the bill is ridiculous,” she said.

The government’s position seems to be that these big tech companies are essentially “stealing” content when links to news stories are shared on Facebook or indexed by Google — that those links have value that is being denied to publishers, and that the tech companies should compensate for that lost value.

“Honest to god, I really feel like this is written by people who have never used the internet,” Simons said. “The whole point of the internet is frictionless sharing of content.”

“I have a hard time with the idea that Google and Facebook are stealing the links — links that media is begging them to take.”

Is C-18 based on a fundamentally flawed understanding of how the internet works? The government's position appears to be that these big tech companies are essentially “stealing” content when links to news stories are shared on Facebook or indexed on Google.
FCB

Simons said she asked Heritage Minister Pablo Rodriguez about this directly. She said the minister dismissed the questions. “His only response is that this is what they did in Australia.”

The Online News Act is modeled on Australia’s “news media bargaining code,” which was introduced in 2021.

Both Simons and Geist have the same questions regarding link sharing: If news links have value, why wouldn’t that be true for any link on Google? Why are news links any different than other links? Will this open the door to other sectors asking to be paid?

“What makes media so special?” Geist said. “What’s to stop health sites or education sites? Or a range of different players to say, ‘Hey, we want our share, too’? And what’s to stop other countries from saying the same?”

Minister Rodriguez declined Ricochet’s request for an interview. Ministry staff offered to answer questions, but did not respond by press time.

“What happened in Australia is,” Simons said, “everybody rushed to make separate side deals. But we’ll never know how much those companies are getting. We don’t know how much money the big Australian media companies got. We don’t know how much money Rupert Murdoch got. These were private deals that companies made.”

In protest, the tech companies took news completely off Facebook and Google in Australia, she said, “including public service announcements from the government in the middle of wildfire season.”

This led to the people in Australia rising up in protest. “They lost their Vegemite, and the tech companies backed down. But I don’t think Canadians would react the same,” Simons said.

Australian newspaper coverage in 2020 of what was described as a world first: "Tech giants face forced payments for news."
@PressOmb_Irl

Since then, according to Poynter, the deals have injected the equivalent of over $180 million CAD into Australian journalism. However, Google and Facebook made outlets sign nondisclosure agreements, so it’s unclear how the funds have been distributed.

Former head of CBC.ca Sue Gardener writes at McGill's Max Bell School of Public Policy, that about 90 per cent of revenues negotiated as a result of the new law have gone to Australia's three largest media companies.

Canadians can expect things to play out similarly here, she writes. In fact, for some, they already are. In anticipation of C-18, Google has already struck deals with many of Canada’s largest media companies, as well as some smaller organizations.

“This is not a bill for journalists,” Geist said. “This is a bill for major media conglomerates. And it’s in stark contrast to what many other people proposed, which is a fund for journalism.”

Why is this legislation even needed?

It’s no secret that journalism is in crisis — with shuttered newsrooms in cities across the country and regular layoffs at large and small outlets, many communities have lost their daily papers completely. Others have seen coverage reduced to weekly, and some have gone online-only, with a skeleton staff remaining.

The entire media landscape in Canada has completely shifted in recent years. And as a result, there are far fewer working journalists.

Simons talked about how Postmedia decimated daily newspapers across the country, and how Prairie and Western papers have particularly taken a hit. Staff at her former paper, the Edmonton Journal, as well as at the Edmonton Sun, Calgary Herald, Calgary Sun, Saskatoon StarPhoenix, and the Regina Leader-Post, were all told they would never come back to their once-vibrant newsrooms again.

“The Calgary Herald building has been sold to U-Haul,” she said. “It’s almost too on-the-nose to be real.”

Simons questions whether C-18 is the correct response to the crisis in Canadian journalism.

“My view would be to just tax these companies appropriately.”

Geist suggests that Canada could instead set up a system with a mandated requirement for these big companies to contribute to a new fund for journalism, “similar to what we see with CanCon.”

Simons said she would’ve liked to see the government explore other options, such as building on what the government is already doing with tax credits and subsidies.

With regard to Geist’s suggestion, which is essentially imposing a new tax on tech companies, and possibly distributing the funds through a granting program, Simons said there would likely be trade implications to that.

“My view would be to just tax these companies appropriately,” Geist said, pointing to the proposed digital services tax as an example, which would target revenue generated out of data by large international companies.

“A journalism fund backed by the companies, or supported in part by the companies, would have done away with all these issues, especially concerns around press interference and independence,” he said.

Ricochet receives support from the Google News Equity Fund, as well as government support through the Canada Periodical Fund, and has applied for status as a Qualified Canadian Journalism Organization.

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