Canadian Heritage Minister Pablo Rodriguez has insisted for months that Bill C-18, the Online News Act, is a market-based approach that would leave it to the Internet platforms and Canadian media outlets to negotiate deals based on the principle of mandated payments for links. Faced with the prospect of Meta and Google’s recent announcements that they would block news links in order to comply with the legislation, it would appear that the government has caved on the bill as it searches for a face-saving compromise. Rodriguez and Prime Minister Trudeau had tough talk last week, but behind the scenes they were seemingly ready to cast aside the core principles that they claimed were essential to the legislation.
Earlier today, Canadian Heritage released a “next steps” document that outlines the planned forthcoming regulations. Those new regulations will effectively rework the legislation by shifting from mandated payments for links with uncapped liability to a threshold contribution customized for each company established by government regulation. Moreover, the contributions will incorporate existing deals and other contributions such as marketing dollars. The specific language from the government states:
The Minister of Canadian Heritage intends to propose regulations that would:
- Establish a financial threshold for contributions to sustainability of the Canadian news marketplace, outlined in subparagraph 11(1)(a)(vi) of the Act. The threshold would be based on a platform’s estimated Canadian revenues and would be specific to each platform and their position within the news marketplace.
- Reaffirm language from the Act that non-monetary offerings to news organizations, such as training or other products, be included in the CRTC’s evaluation of exemption criteria.
- Consider existing agreements that the digital platforms have reached with news businesses, provided that they reflect the criteria outlined in Section 11 of the Act.
- Provide clarity on what constitutes a “significant portion” of independent local news businesses, Indigenous news outlets, and official-language minority community news outlets under subparagraphs 11(1)(a)(v), 11(1)(a)(vii), and 11(1)(a)(viii), respectively.
- Provide more details on the thresholds that fulfill the requirements outlined in section 11 of the Act.
Unpacking this language, the government intends to establish regulations that would set the minimum financial contribution by each company (Google and Meta) that would be based on its Canadian revenues. The companies could meet that amount by including both their existing deals and non-monetary contributions (training, free ads, etc.). This model would likely meet many of Google’s stated structural requirements, since it no longer links payments to links, caps liability, and accounts for other contributions. The company would add up its existing deals, strike new ones with broadcasters and other independent outlets (hence the clarity on what is needed), and leave it to the CRTC to grant an exemption.
There are several aspects of this proposed regulatory process that merit comment. First, there is no deal yet. The Parliamentary Budget Officer estimated hundreds of millions for links from these two companies annually. If the government is still thinking in those terms, it may have a better structure, but wildly unreasonable expectations that keeps the door open to blocked news links or sharing. The Canadian precedent will involve more than just payments for links. It also includes what amounts to a tax on revenues to support the news sector and a big number could lead to billions in liability globally.
Second, even if the government manages to find a compromise with Google, it seems unlikely that there will be one with Meta. Meta has left no doubt that it will not pay for links and that news has limited value on its platform. With the government suspending its advertising on the platform (even as the Liberal party continues to advertise and MPs race to create Threads accounts), it is hard to see a road back for Meta. If that is the case, Bill C-18 is already a disaster as the lost links and cancellation of existing deals mean that Bill C-18 may result in a net loss for the media sector.
Third, the role of the CRTC as independent arbiter is basically eliminated by government with these regulations. The Commission is supposed to determine what is needed to qualify for an exemption from final offer arbitration. If these regulations take this structure, the government is telling the CRTC what spending is needed to obtain an exemption and its role is limited largely to being a bean counter.
Fourth, this quagmire is entirely the government’s own making. There were alternative options proposed that look much like this structure. Those were consistently rejected and those proposing the alternatives dismissed as shills. Yet faced with emerging disaster that is Bill C-18, the government seems prepared to ditch the principles it said were critical in its news bill in the hope of a face-saving compromise. Whether it is also willing to drop the visions of hundreds of millions for the sector will likely determine whether it can convince at least one of the platforms to drop their plans to block news links or news sharing in Canada.
The government was completely out of options. Their massive boycott was a failure in less than a week, their messaging failed to resonate with Canadians (a poll out shows that those who think the bill should be rescinded completely greatly outnumbers the people who are pushing to keep the law in place), there is no legal recourse for the platforms dropping news links, there are no international trade agreements they can work to strong arm the platforms, there are no provisions forcing the platforms to link in the law, and other countries want nothing to do with helping Canada get out of this giant mess.
The toolkit was empty on this one. The most they could muster is issuing massive financial bailouts to the large media companies in the event that the platforms drop Canadian news links, but that was ultimately a temporary fix for what threatened to be a permanent problem. Every player supporting Bill C-18 was screwed one way or another and everyone that is sensible in this debate knew that this was a problem of their own making.
Kind of impressive how quickly the government went into a salvage operation here and this is the latest effort to salvage the situation.
Excellent analysis 👍
“Impressive”?? This government does not seem to get much done that was intended. I do not call that an impressive government.
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Do you seriously believe Google will waste its resources dealing with crooked, convulated laws and regulation that may or may not amount to anything? Mainstream Media and its chief lobbyist Pablo Rodriguez have lost a long time ago, they just don’t realize that almost no one wants this regulation as they are under the illusion of going forward when in fact, they are just coasting from their enormous inertia to an inevitable halt that they will never be able to take themselves out of, like an old steam engined train arriving to its final destination at the wrecking yard.
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What a way to run a country. Mess after mess after mess.
The best explanation I’ve seen for why screw-ups like this keep happening comes from Terry Glavin’s Substack. In it he wrote about how India’s government views our government. It said “In Delhi, the Trudeau government is understood as a national-security menace, but less of a direct threat than an extremely dangerous caucus of compromised imbeciles.” Pretty much sums it up.
Yup!
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Where has Fed Up gone? He’s disappeared as quickly as he appeared. Maybe Pablo fired him.
Fed Up was Pablo himself.
Can’t be. Pablo isn’t that coherent.
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Google will negotiate with Postmedia, owner of the most newspapers in Canada, and then they will brag about what great digital citizens they are supporting journalism and the pillars of democracy while the politicians clamour about how they defeated the foreign tech giant all the while journalists continue to lose their jobs because the foreign shareholders of Postmedia took all the money! Just like in Australia!!!
I don’t think they will. Not with the current law as it stands. They simply cannot agree to uncapped global (because that’s where this goes once they agree to this insanity in Canada) liability for news links.
And then once other organisations see that they are paying for links to news, do you think it stops there?
Once everyone with a link to themselves on the WWW wants to be paid for it, the WWW crumbles and ceases to be.
That is what Google and Meta are standing up against. It’s not just the paltry fees that Canadian news links would cost them.
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On this one, there was nothing in the toolbox. In the event that platforms remove Canadian news links, the government could only muster a massive financial bailout for the major media organizations, but even that was only a short-term solution to what loomed as a long-term issue. https://www.providentecopoliten.net.in
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