The past few days have been painful to watch as Canadian politicians grapple with the aftermath of recognizing and applauding a Nazi in the House of Commons. The episode and its response brings back memories from last year’s discouraging response to revelations that Canadian Heritage’s anti-hate program had provided funding to Laith Marouf, a known anti-semite. While there are obvious differences, the commonality lies in the pain to the Jewish community and the reticence for full-throated apologies and public engagement, misplaced hope that the issue will just recede from public attention, slow commitments to ensure it does not happen again, and reluctanc
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Why the Government’s Draft Bill C-18 Regulations Don’t Work: The 4% Link Tax is Not a Cap. It’s a Floor.
The Online News Act has quickly emerged as one of the government’s biggest policy failures with Canadian news outlets facing lost traffic, lost revenues, and lost competition. The source of the Bill C-18 failure was the government’s seeming inability or unwillingness to game plan the potential outcomes of the law, rejecting criticisms and calls for a “Plan B” by instead relying on the hope that the policy measures would simply unfold as they did in Australia. That obviously has not happened, leading to the growing realization that Meta’s blocking of news links, which has already gone on far longer than it did in Australia, is not a bluff. With Meta out of news in Canada, the government is hoping to salvage the law by convincing Google to pay at least $172 million for news links. Unfortunately, the draft regulations released by Canadian Heritage Minister Pascale St-Onge suffer from the same failures as the law, namely an inability to game plan the potential outcomes of the regulations.
I’ve already written about how the draft regulations will do little to ensure more spending on journalism and how they are stacked against small, independent and digital first news outlets. But as I read analysis that suggests that Google got what it wanted – a cap on liability – I fear that the regulations are badly misunderstood. In fact, if you assess the competing policy objectives in the regulations and consider how they might actually play out, it becomes hard to avoid the conclusion that they don’t work and may well lead Google to walk away from news in Canada.
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.