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 Broadcasters’ Online News Act Submission: Demanding An Even Bigger Piece of the Bill C-18 Pie for Bell, Rogers and the CBC
The government has yet to release its final regulations for the Online News Act, but recent comments from News Media Canada seemed to suggest that it is hoping to find common ground with Google, stating that it supports the company’s proposed amendments to Bill C-18 draft regulations. While that may be a long shot – I posted that Google’s call for legislative changes signals that it has arrived at the conclusion that regulations alone cannot fix the foundational flaws in the law – the Canadian Association of Broadcasters has created yet another complication. The lobby group representing private broadcasters such as Bell and Rogers isn’t looking to find a compromise position. Instead, its submission indicates that wants all broadcasters (which given the law would include the CBC) to get an even bigger portion of the potential Bill C-18 revenues by expanding the definition of “journalist” to include everyone from sound and video engineers to researchers and fact checkers. The expansive definition prioritizes many broadcasting jobs, which would mean conventional newspaper services likely would get even less than the current estimate of 25% of revenues.
Regulations Alone Can’t Fix Bill C-18: Why News Media Canada’s “Surrender” May Not Be Enough to Stop Google From Blocking News Links in Canada
After months of urging Heritage Ministers Pascale St-Onge and Pablo Rodriguez to stand up to Google and Meta’s response to Bill C-18, News Media Canada – the lead lobbyist for the legislation – appears to have waved the surrender flag as it is now urging the government to accommodate Google’s concerns with draft regulations. The shift in approach unquestionably marks a retreat for the group, which literally drafted a version of the bill for the government and wielded the power of major media outlets to skew national coverage in favour of the legislation. While it insisted that the companies were bluffing when they said they would block news links if a mandated payments for links approach were adopted, it is now readily apparent that they were mistaken. Meta has blocked news links on its Facebook and Instagram platforms for more than two months and shows no sign of changing its approach. Given that Google appears to be moving in the same direction, News Media Canada’s decision to toss the government under the bus reeks of desperation as its members recognize that blocked news links on both Meta and Google would create enormous harm in lost traffic, cancelled deals, and an Online News Act that generates no revenues.
A Reality Check on the Online News Act: Why Bill C-18 Has Been a Total Policy Disaster
Prime Minister Justin Trudeau was asked this week about concerns with the implementation of Bill C-18, to which he responded that other countries are quietly backing Canada in its battle against tech companies. I posted a reality check tweet noting that Meta is not returning to news in Canada, the law’s regulation stipulating a 4% fee on revenues is not found anywhere else, and that Bill C-18 has emerged as a model for what not to do. With the House of Commons back in session, it is worth providing a more fulsome reality check on where things stand with the Online News Act. While the government is still talking tough, the law has been an utter disaster, leading to millions in lost revenues with cancelled deals, reduced traffic for Canadian media sites, declining investment in media in Canada, and few options to salvage this mess.
For those that took the summer off, Bill C-18 received royal assent in late June. Over the past three months:
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