Bill C-18, the Online News Act, is best known for two things: the government’s bad bet that Meta was bluffing when it said it would block news links in response to a system that mandated payments for links (news links have now been blocked for 10 months in Canada) and its attempt to salvage the legislation by striking a deal with Google worth $100 million annually. The Google deal has receded into the background, but the behind the scenes there is an intense battle over who will be selected to administer and allocate the annual $100 million. The outcome – which will be decided by Google by June 17th – will have enormous implications for Canadian media for years to come since it is anticipated that Google and the selected collective will negotiate a five year deal worth $500 million. Sources say that two proposals have emerged: a big media consortium led by News Media Canada (NMC), the Canadian Association of Broadcasters (CAB), and the CBC, pitted against a proposal spearheaded by a group of independent and digital publishers and broadcasters that is promising a more transparent and equitable governance approach.
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More Free Money: Media Lobby Campaigning For Even More Government Funding, Grants and Tax Reform
The proverbial ink is barely dry on the disastrous Bill C-18, yet the Canadian media lobby has already moved onto the next targets for government funding, grants, and tax reform. The effort, which is seemingly designed to ensure that government funding or regulation cover the entire cost of news, focuses on extending grants, expanding provincial tax credits, and overhauling the tax treatment of ad spending. It has hard to overstate how dangerous these policies have become as the sector’s addiction to government funding and regulation has come at an enormous cost that erodes public trust and created dependence on the very governments the press is supposed to hold to account.
The slippery slope of this government’s funding the media has been ongoing for years: the Local Journalism Initiative offered tens of millions in grant money, the Labour Journalism Tax Credit created a tax credit worth nearly $14,000 per journalist when established that was more than doubled last year on a retroactive basis to nearly $30,000 per journalist, and the Online News Act (Bill C-18) offered the hope (or more accurately illusion) of hundreds of millions more from Google and Meta. On top of the federal money, the Quebec government offers a similar tax credit system that comes close to ensuring that government money and regulation cover the entire cost of news journalists at print and digital publications in the province. And if that were not enough, the CRTC is working through its plan for Bill C-11, which the Canadian Association of Broadcasters hopes will lead to the creation of yet another news fund, with 30% of contributions from Internet streaming services such as Netflix and Disney going to the news divisions of Canadian broadcasters such as Bell and Rogers.
The House of Cards Crumbles: Why the Bell Media Layoffs and Government’s Failed Media Policy are Connected
Bell’s announcement this week that it is laying off thousands of workers – including nearly 500 Bell Media employees – has sparked political outrage with Prime Minister Justin Trudeau characterizing it as a “garbage decision.” The job losses are obviously brutal for those directly affected and it would be silly to claim that a single policy response was responsible. Yet to suggest that the government’s media policy, particularly Bills C-11 and C-18, played no role is to ignore the reality of a failed approach for which there have been blinking warning signs for years. Indeed, Trudeau’s anger (which felt a bit like a reprise of his Meta comments over the summer) may partly reflect frustration that his policy choices have not only not worked, but have made matters worse.
Bill C-18 is Dead, Long Live Bill C-18: Government Rewrites Online News Act With Final Regulations
The government this morning released the final Online News Act regulations, effectively gutting the law in order to convince Google to refrain from blocking news links in Canada and to fix some of the legislative mistakes that have been apparent from the start. While proponents of the law will point to the $100 million contribution from Google as evidence of success, privately most in the industry and government acknowledge the obvious: Bill C-18 was deeply flawed and a massive miscalculation that has created far more harm than good. Canadian Heritage Minister Pascale St-Onge seemingly agrees as she was willing to make changes that were derided by the government throughout the legislative process. Indeed, by the time St-Onge took over the file that was a challenging salvage job, Meta’s $20 million in news deals were lost and blocked news links on Facebook and Instagram was a reality. The prospect of the same happening with Google was too much for the industry and the government since the lost deals would have been at least double that amount (many believe in the $40-50 million range) and lost news links in search would have been catastrophic.
My CRTC Appearance on Bill C-11: Why Isn’t the Commission Concerned with Competition, Consumer Choice, and Affordability?
The CRTC’s Bill C-11 hearings are in their third and final week as a steady stream of broadcasters and producers make their way to Gatineau to urge the Commission to force Internet streamers to hand over cash in a giant cross-industry subsidy scheme designed to support everyone from small producers to Bell’s news division. As the witnesses take turns seeking the mantle that they are facing the biggest crisis (even as there is record film and television production in Canada and broadcasters stand to be the biggest beneficiary of the Online News Act), there has been practically no interest or discussion of the risks to consumers and competition that could come from significant new regulatory costs.
I set out to change that yesterday in my appearance before the Commission. It was my first time to appear as a witness before the CRTC and I used the opportunity to emphasize the real risks of reduced competition and higher costs that can come with mandated payments that exceed global standards. Further, I argued that the Commission should not establish interim payments at all, noting that it was more appropriate to address all of the outstanding Bill C-11 regulatory questions before looking to streamers to start cutting cheques.
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