The government released its draft Bill C-18 regulations on Friday ahead of the Labour Day weekend, but ironically those regulations do very little to ensure that new funding will be allocated toward employing journalists. While the regulations establish what amounts to a minimum 4% link tax on Google and Meta if they link to news content, they set no minimum requirements to spend the resulting revenues on journalists or news content. In fact, the government specifically dictates to the CRTC that the legislative requirement that an “appropriate portion of the compensation will be used for the production of local, regional and national news content” will involve no minimum amount and the agreements need only reference that “some” of the compensation will be used for that purpose. As a result, in the best case scenario for the government in which the Internet platforms pay for links by reaching commercial agreements with news outlets, the big beneficiaries such as Bell, Rogers, the CBC, and Postmedia would be free to spend the vast majority of the money generated by those deals on executive salaries, debt repayment, or any other purpose.
Latest Posts
A 4% Link Tax: Why the Government’s Draft Bill C-18 Regulations Just Increased the Chances of No News on Meta and Google in Canada
The government is releasing its draft regulations for Bill C-18 today and the chances that both Google and Meta will stop linking to news in Canada just increased significantly. In fact, with the government setting an astonishing floor of 4% of revenues for linking to news, the global implications could run into the billions for Google alone. No country in the world has come close to setting this standard and the question the Internet companies will face is whether they are comfortable with the global liability that would see many other countries making similar demands. The implications are therefore pretty clear: there is little likelihood that Meta will restore news links in Canada and Google is more likely to follow the same path as the Canadian government establishes what amounts to 4% link tax from Bill C-18 on top of a 3% digital services tax and millions in Bill C-11 payments.
Why Heritage Minister Pascale St-Onge Doesn’t Seem to Understand How Bill C-18 Works
Heritage Minister Pascale St-Onge went on a media offensive late last week, granting interviews to a wide range of publications. St-Onge noted that she had “positive” talks with Google and Meta that she hoped would result in a compromise and improbably claimed concern for users’ rights to share information online, an odd position given that Bill C-18 undermines the free flow of information online with its mandated payments for links approach. St-Onge got the headlines she was no doubt looking for, but it was pretty obvious that not much had changed, with Meta confirming that she had requested the meeting and that it is continuing to end news availability in Canada. While that was typical of the English-language coverage, St-Onge’s comments to French language outlets such as La Presse and Journal de Montreal added another dimension, with the Minister suggesting that companies should negotiate deals by year-end in order to become “exempt” from the law.
St-Onge may want to leave the impression that there is an easy out for the tech companies, yet the reality is those comments fundamentally misunderstand how Bill C-18 works.
What Urgency?: CRTC Says It Will Take Years For Bill C-18 Media Bargaining to Begin
The Bill C-18 legislative process was marked by repeated warnings from the government that this was an urgent issue that justified its repeated efforts to cut off debate in order to fast track the bill into law before the summer break. In fact, in a late change, the bill was amended to provide that it would take effect with 180 days of royal assent, rather than the previously envisioned staged approach that would have resulted in a gradual development of regulations and implementation. That change has had enormous implications as the law can now take effect at any time but no later than December 19, 2023, which in turn led Meta to move to comply with the law immediately by blocking news links in Canada.
Notwithstanding the government’s plans, the CRTC apparently has other ideas.
Bill C-18 and the CBC’s Self-Destructive Approach to Government Digital Policy
I need to start this post by making it clear that I am a supporter of publicly funded broadcasting and the CBC. With the increased use of paywalls and dramatic shifts in the media landscape, there is value in a public broadcaster that fills the gaps in the privately owned media world by ensuring that all Canadians have open, freely available access to reliable news. That requires embracing all forms of distribution, maintaining steadfast independence, and limiting direct competitive overlap with the private side that is currently facing significant digital transition challenges. This should be an easy value proposition for the CBC and one that would provide a compelling case for public funding. Yet the CBC’s approach to Bill C-18 and other government digital policies seems determined to do the opposite and, in doing so, threatens its future support.
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The Law Bytes Podcast, Episode 200: Colin Bennett on the EU’s Surprising Adequacy Finding on Canadian Privacy Law 
Debating the Online Harms Act: Insights from Two Recent Panels on Bill C-63 
The Law Bytes Podcast, Episode 199: Boris Bytensky on the Criminal Code Reforms in the Online Harms Act 
AI Spending is Not an AI Strategy: Why the Government’s Artificial Intelligence Plan Avoids the Hard Governance Questions
