Canadian Heritage Minister Pascale St-Onge’s deal with Google on Bill C-18 for an annual $100 million contribution has sparked some unsurprising crowing from partisans who insist the fears that the government had mishandled the Online News Act failed to recognize a well-executed negotiation strategy. Yet the response from industry supporters of the bill has been noticeably muted: News Media Canada did not issue a press release with CEO Paul Deegan noting that the impact would depend on the forthcoming regulations, the Canadian Association of Broadcasters said it was relieved there was a deal and that links would not be blocked, Quebec broadcasters are already calling for more support, and Friends of Canadian Broadcasting said the deal did not deliver the support it originally hoped for. These comments come closer to reflecting the reality of the deal, namely that the government misread the market, passed deeply flawed legislation, and was ultimately forced to row back core elements of the law and accept payments consistent with what was on the table over a year ago.
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Salvaging Bill C-18: Government Upends Legislation To Bring Google Onside the Online News Act
The government has announced that it has reached agreement with Google on deal that will ensure that news links are not blocked on the search engine and that the company pays $100 million to support the news sector in Canada. To be clear, this is good news for all given that the alternative was bad for news outlets, the government, Canadians, and Google. Indeed, over the past few months in discussions with representatives of media outlets, the consistent refrain I heard was that there *had* to be a deal. The harm from Facebook and Instagram blocking news links was taking a significant toll with lost revenues, lost traffic, and lost deals, meaning that something had to be salvaged from Bill C-18.
It turns out the way to salvage the bill was essentially to start over by tossing aside most of the core elements in the bill in favour of a single payment by Google negotiated by the government on behalf of the news sector. What is left is a $100 million payment into what amounts to a fund to be managed by the news sector itself. Google has agreed to pay $100 million to a single collective (there will be a battle over which collective will represent the news sector) and the collective tasked with allocating the money based in large measure on forthcoming regulations.
The broadcast sector will remain the big winner, though speculation of the possible removal of the CBC from the system would increase the distributions to the remaining companies. Regardless, allocating the majority of the money to broadcasters presumably helps explain why the government announced a $129 million bailout that expands the available money in the labour journalism tax credit, for which only print and digital publications (known as Qualified Canadian Journalism Organizations) are eligible.
The Law Bytes Podcast, Episode 186: Andy Kaplan-Myrth on the CRTC’s Last Ditch Attempt to Fix Canada’s Internet Competition Problem
For many years, Canadians have lamented the state of competition for Internet broadband services, pointing to concerns regarding price and lack of choice. Earlier this month, the CRTC seemed to agree, admitting in a decision involving competitive access that it is “important that the Commission revise its approach to promote competition and protect the interests of Canadians.” Andy Kaplan-Myrth is Vice-President, Regulatory and Carrier Affairs at TekSavvy, one of the few remaining independent competitors in Canada. He joins the Law Bytes podcast to discuss the current state of competition, the recent CRTC decision, and what this might mean for the Canadian market.
On Media Bailouts and Bias: Why Government Media Policy Is Undermining Public Trust
Yesterday I was a guest on a Toronto-area radio station where I was asked to discuss the government’s plans to more than double the amount available per journalist as part of the labour journalism tax credit. After a discussion of the tax credit program and months of blocked news links on Facebook as a consequence of Bill C-18, the host shifted the discussion by suggesting that the media had largely become propaganda on behalf of the government, insisting that these measures were consistent with a strategy of either blocking or influencing news coverage. I paused for a moment and said I disagreed, noting that there was good journalism and bad journalism, and his take was bad journalism. The segment ended immediately after that.
That experience came to mind later in the day as the debate over media bias and government funding captured further attention after Jenni Byrne, a leader in the Pierre Poilievre team, tweeted that criticism of Poilievre’s interactions with a journalist could be chalked up to the increased funding and that the bailout would mean journalists “would do whatever the PMO says.” Byrne’s comment strikes me as absurd as those of the radio host. All journalists have some biases. They wouldn’t be human if they didn’t. But the suggestion that a government tax plan would influence their individual coverage is just not credible.
Canadian Government Quietly Backs Down on its Implementation Plans for a Digital Services Tax
The federal government has quietly backed down from its plans to implement a new digital services tax as of January 2024 that the Parliamentary Budget Officer estimated would generate billions in revenue. It did not make the headlines or receive much promotion, but after months of insisting that a digital services tax would take effect in Canada in January 2024, the government has now removed that implementation deadline in the Fall Economic Statement. The battle over the proposed tax had sparked increasing anger between Canada and the U.S., with dozens of U.S. Senators and Representatives signing letters urging the government to delay its plans. The Canadian plan remains to establish a retroactive three percent tax that will hit a wide range of businesses, but given fears moving ahead now would jeopardize a global agreement that is designed to address the digital services tax issue, Canada has seemingly faced the obvious reality and backed down.
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