Full–Time Equivalent FTE by Alpha Photo (CC BY-NC 2.0) https://flic.kr/p/2og938P

Full–Time Equivalent FTE by Alpha Photo (CC BY-NC 2.0) https://flic.kr/p/2og938P


Why the Government’s Bill C-18 Draft Regulations Are Stacked Against Small, Independent, and Digital-First Media Outlets

The problems with government’s Bill C-18 draft regulations involve more than just what amounts to a 4% link tax on Google and Meta alongside little effort to ensure the resulting revenues are used to support spending on journalists and news content. As noted in previous posts, the draft regulations put an end to the claim that the Online News Act involves compensation for news creation since the standards are now simply a function of Internet platform revenues, not news production costs.  Given the global implications of a 4% tax on revenues to support media, that approach likely further cements Meta’s decision to comply with the law by stopping news links and increases the chances that Google follows suit.

But the concerns with the draft regulations do not end there. Indeed, the regulations revive the frustration of many smaller, independent and digital-first news outlets who feared that Bill C-18 would harm them competitively by receiving less support relative to larger companies such as Bell, Rogers, the CBC, and Postmedia or be excluded altogether. This issue was one of the most prominent aspects of the Bill C-18 committee hearings, with MPs from all parties expressing concerns about potential exclusions. The government ultimately passed amendments that expanded the eligibility of news outlets to account for the fact that smaller outlets often have very few full-time employees, relying instead on owner-operator models, community contributors, or freelancers.

While the amendments expanded eligibility with lower eligibility thresholds, the draft regulations effectively revive the same concerns. At issue are the regulations related to “fair compensation”, which is one of the criteria for the CRTC to consider in determining whether to grant an exemption from final offer arbitration. The regulations contain two relevant provisions. First, the fair compensation regulation:

6 (1) For the purposes of subparagraph 11(1)(a)(i) of the Act, if the relative compensation provided for in each of the agreements, submitted by the operator with its request for an exemption, is within 20% of the average relative compensation of all of the agreements submitted with that request, the Commission must interpret the agreements as providing for “fair compensation”.

The effect of this provision is to ensure that all agreements must be within 20% of each other from a relative compensation perspective. But how to judge “relative compensation”? The second regulation states:

(2) For the purposes of subsection (1), relative compensation means the ratio of compensation relative to the number of full-time equivalent journalists paid by a news business or group of news businesses, as the case may be, in the previous calendar year.

In other words, the standard used to compare compensation between news outlets is measured by the number of full-time journalists (ie. $100,000 for an outlet with 10 full-time journalists is the same as $20,000 for an outlet with 2 full-time journalists). This brings back the same issue that arose during the Bill C-18 hearings since the standard creates an advantage for those who structure themselves primarily through full-time journalists rather than with freelancers or other contributors. These other journalists do not count nor do other potential metrics that might measure quantity, impact or quality that could include assessing quantity of news content, links, clicks, or website traffic. 

The approach works for larger outlets, but is awful if you are a smaller community outlet that produces news content with relatively fewer full time journalists. The smaller outlet may have a relatively comparable impact (accounting for size), but will receive less compensation under the Bill C-18 system. Moreover, given the 20% band requirement, the platforms can’t pay the smaller outlet more without raising the rates paid to the established players. The end result will be to entrench the more established outlets, while making the smaller, independent and digital-first outlets less competitive. During the Bill C-18 hearing, Liberal MP Lisa Hepfner stated that online news wasn’t real news. The Bill C-18 draft regulations reflect that attitude, rewarding the large lobbying groups and continuing the harmful effects of the Online News Act for many media stakeholders.


  1. Once again, why is any of this a surprise?

    The big media distribution companies with the most money and influence got the legislation that benefits them the most and helps them stamp out any semblance of competition in oligopoly-land, otherwise known as Canada.

    This government is soooo captured on so many fronts by so many pocket-lining big business lobbies. It’s quite frankly sickening.

    I just hope and pray that FB stays the course in not posting news links and Google follows suit so that this whole thing can be regarded the massive failure that it is and scrapped for something more reasonable.

    Ideally that is something that is not crafted by the big media puppet-masters, but sadly that is not likely going to be the case.

    Ultimately, it’s incumbent on FB and Google to reject all of this, lock-stock-and-barrel and not let Canada “break” the Internet (well, the WWW to be accurate) and it’s foundational concept of the free flow of information. FB and Google have to reject any attempt to put a price on linking no matter what the deal is, otherwise the news lobby will be but the first in a long line of lobby groups that want paid for their links also.

  2. “full-time equivalent journalists”. In my experience, this would mean that if the small paper has 4 journalists working part-time (20 hours each), this would equate to 2 FTE journalists at 40 hours each, since the times I have seen FTE used it basically means that you total the number of hours worked and divide that by the number of hours for a full-timer. So in my example, 4 people x 20 hours each = 80 person hours = 2 persons x 40 hours each.

    Of course, the CRTC may choose to interpret the term “full time equivalent” differently.

  3. My biggest concern about the use of revenue per FTE is that it will create conflict between news organizations and Google that will end with the CRTC dictating the terms of each deal. How would this happen? Here’s how – in 2022 CBC Newsworld had revenue of $75M and 455 FTEs while CP24 had revenue of $67M and 74 FTEs. Google will look at these numbers and will offer Newsworld about six times what it offers CP24. Newsworld will think that’s fair. CP24, on the other hand, will say wait a minute our revenue is 90% of Newsworld’s so Google should pay us 90% of what it pays Newsworld. In the end it will be left to the CRTC to decide how much Newsworld and CP24 should get.

    Now Google has to negotiate deals with about 500 news organizations, so the risk of negotiations becoming deadlocked will grow exponentially. It will end up being one huge mess that will take years to sort out.

  4. Pingback: Why the Online News Act has been a total policy disaster - The Hub