Later today, the House of Commons will vote to approve Bill C-18, the Online News Act, sending it to the Senate just prior to breaking for the holidays. While Canadian Heritage Minister Pablo Rodriguez and media lobbyists will no doubt celebrate the milestone, it should not go unremarked that the legislative process for this bill has been an utter embarrassment with an already bad bill made far worse. The government cut off debate at second reading, actively excluded dozens of potential witnesses, expanded the bill to hundreds of broadcasters that may not even produce news, denigrated online news services as “not real news”, and shrugged off violations of international copyright law. All the while, it acknowledged that mandated payments for links are the foundation of the bill with officials stating that individual Facebook posts accompanied by a link to a news story would be caught by the law. As for the purported financial benefits, the government’s own estimates are less than half those of the Parliamentary Budget Officer, who also concluded that more than 75% of the revenues will go to broadcasters such as Bell, Rogers, and the CBC. The end result is a bill that will undermine competition and pose a threat to freedom of expression, while potentially leading Facebook to block news sharing in Canada and Google to cancel dozens of existing agreements with Canadian news outlets.
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Shakedown Complete: The Story Behind Bill C-18’s Shameful Legislative Review Process and the Race to Mandate Payment for Links
The Senate Standing Committee on Transport and Communications completed its extensive review of Bill C-11 last week. After a review for grammatical, editorial, and translation issues, the committee is expected to finalize its report back to the Senate later today. While the next steps for Bill C-11 remain somewhat uncertain, the committee should be congratulated for providing a model for legislative review. Indeed, the Senate committee was everything the House committee was not: policy focused, open to hearing from a wide range of witnesses, and willing to engage in meaningful debate on potential amendments. Politics occasionally arose during the clause-by-clause review, but political considerations were never going to be entirely stripped from a highly politicized piece of legislation.
I may have missed the odd change, but the following amendments were approved by the committee:
Big Cost, Smaller Benefit: Government Modelling Pegs Likely Bill C-18 Revenues at Less Than Half of Parliamentary Budget Officer Estimates
Canadian Heritage Minister Pablo Rodriguez has touted Bill C-18, the Online News Act, as critical for Canada’s media sector, but government’s internal modelling suggests there will be limited benefits for most news outlets. Earlier this fall, the Parliamentary Budget Officer estimated that it would generate $329 million per year, with over 75% of that revenue going to broadcasters such as Bell, Rogers, and the CBC. At the time, I noted that meant that “newspapers will receive less than 25% of the funding or about $81 million to split among hundreds of news outlets.” It turns out that the government believes that vastly overstates the benefit as its own modelling estimates about $150 million in total revenues, less than the 50% of the PBO’s estimate. Assuming a similar apportionment of revenues between broadcasters and newspapers, that would place the benefit at just over $37 million for the entire newspaper sector. In fact, as the government has expanded the eligibility to hundreds of additional outlets, the benefits for each organization shrinks even further.
Canadian Heritage Minister Pablo Rodriguez’s claim that Bill C-18, the Online News Act, was a hands-off approach was never really credible, but the clause-by-clause review of the bill has taken the government picking media winners and losers to another level. It was always readily apparent that the bill represents an unprecedented government intervention into the Canadian media sector with the extensive power wielded by the CRTC as it sets regulations and the ground rules for the mandatory arbitration process. Further, the Parliamentary Budget Officer’s estimate on the benefits that might arise from the bill – hundreds of millions of dollars of which more than 75% would go to broadcasters such as Bell, Rogers and the CBC – provided a reminder that there was big money involved of which relatively little would go to the newspaper sector.
In recent weeks, however, the government’s role in picking winners and losers has become even more pronounced. Liberal MP Lisa Hepfner’s ill-advised comment that online news outlets weren’t real news was rightly criticized (leading to an apology and near total silence from Hepfner ever since) but skeptics feared she was merely saying the quiet part out loud since the reality of Bill C-18 is that it is the lobbying product of large media outlets, who are set up as the prime beneficiaries.
Who Is the Government Really Backing With Bill C-18?: Rejected Online News Outlet Amendment Tells the Story
Last week, I wrote about Liberal MP Lisa Hepfner’s comments at the Heritage committee study into Bill C-18, as she dismissed a proposed Conservative amendment by offering a misleading take on CRTC regulation of the news and stating that online news outlets are “not news.They’re not gathering news. They’re publishing opinion only.” Those comments unsurprisingly sparked anger from many online news outlets, leading to an apology from Hepfner in which she said that Bill C-18 will support digital journalists in their work. Yet a day later, the committee was back at clause-by-clause review and while Hepfner remained silent, her colleagues voted down an amendment proposed by online news services which re-affirms that action speaks louder than words.