Deeply Flawed – If the market won’t support quality journalism, we need to find some other way to do it

BY SIMONE J. SMITH

“In response to Canadian government legislation, news content can’t be shared.”

If you are a resident in Canada, this message has probably become a norm if you are a person who enjoys sharing news on platforms like Facebook, and Instagram.

In June of this year, Canada’s controversial Bill C-18 became law, requiring big tech companies to compensate media organizations if they want to continue to host Canadian news content on their platforms.

Yes, we have all had to come to terms with Bill C-18, or the Online News Act, which lays out a framework that requires digital giant’s Google and Meta to develop agreements with Canadian news sites to provide them with compensation for sharing their journalistic content that appears on their platforms.

The Bill was first presented in 2022, amid reported years of major declines in news ad revenue. It was based on a similar policy initiative in Australia called the News Media and Digital Platforms Mandatory Bargaining Code.

According to the federal government, the bill was passed in order to help the Canadian news industry, which has seen falling subscriptions and ad revenue over time as those profits shift to these companies. According to an Angus Reid report released in July, 85% of Canadians do not pay for any online news subscriptions and Canadians under the age of 64 usually check social media sites such as Facebook and Reddit first to get their news. Federal statistics indicate that while 69% of Canadians access news online, just 11% of Canadians pay for it.

So, what was the solution; stymie news outlets from posting news on both Google and Meta, the company behind Facebook and Instagram. That’s right, block Canadian’s from getting news from their platforms in response to the new law.

From the very beginning, there has been opposition of this Bill and for good reason; number one reason: it just doesn’t make any sense, and for some, this Bill has been seen as a convenient way to censor alternative media in Canada, especially after the dissension that occurred during the pandemic. In an article titled, “Bill C-18 is Bad for Journalism and Bad for Canada,” Sue Gardner explains that the stated premise of Bill C-18 was that by making links to news material available on their sites, platforms are taking value from publishers, and so they need to be forced to compensate publishers for that value to “enhance fairness” in the Canadian digital news marketplace.

This is what is a head scratcher; news publishers like the Toronto Caribbean Newspaper want to appear on those platforms, because that’s where our community finds news. When someone sees a story on Google or Facebook, and clicks on it or shares it, that brings traffic to our website, increasing our reach and our revenue. Being on Facebook and Google helps news outlets like ours, it doesn’t hurt us.

What our government did with this particular intervention was misguided and has not helped out news outlets one bit. Journalism is for the people, for communities across the world, and when it is performing well it strengthens the societies in which it operates. Our governments know this, which is why this decision has been scrutinized as much as it has been. Any interventions should support and encourage a thriving, healthy news industry.

Guess what Canadians, we have some news for you; one of my reporters Paul Juror, sent me an article titled, “Bill C-18 is Dead, Long Live Bill C-18: Government Rewrites Online News Act With Final Regulations,” and in the article Michael Geist shared that the government effectively buried the original Bill C-18 and resurrected it as the law it spent months rejecting. Let’s take a look at what is going on here.

On December 15^th, 2023, the Canadian government 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. In order to defend their case, advocates of the Bill are pointing to the $100 million contribution from Google as evidence of success, but privately most in the industry and government have had to acknowledge the obvious: Bill C-18 was deeply flawed and a massive miscalculation that has created far more harm than good.

The $100 million from Google is likely to yield relatively little new money after subtracting $20 million lost from Meta, an estimated $50 million from existing Google spending is folded into the new funding model, and $5-6 million to cover administrative costs of the new system. In other words, the entire Canadian news industry picks up roughly $25 million in new money, set against lost links on Facebook and Instagram and lost investment in the sector due to regulatory uncertainty.

December 15^th’s final regulation overhauls the law, adding a Google-specific regulation which specifically grants it an exemption from arbitration in return for the $100 million payment and a specific reference that the payment is not about payments for links. The Google-specific provision is exhibit A for the absurdity of the legislation as it literally creates a singular exception for one company.

Despite subsection (1), in the case of the digital news intermediary that is the search engine with the greatest share of Canadian Internet advertising revenues among all search engines in respect of which the Act applies, the Commission must interpret the agreements as contributing to the sustainability of the Canadian news marketplace if and only if, for each year covered by the potential exemption order, the agreements provide for monetary compensation in accordance with the formula.

We have to credit Canadian Heritage Minister Pascale St-Onge as she was willing to make changes that were derided by the government throughout the legislative process. The original Bill C-18 has been resurrected as the law the government spent months rejecting.

Bill C-18 misdiagnosed the problem as news publishers not getting their fair share of ad revenues. The real problem is we need to find new sustaining business models for the news industry, because the old one is dead and gone. Or how about, perhaps if the market won’t support quality journalism, we need to find some other way to do it.

We are going to continue to follow this story, and hopefully you will be seeing us on your Facebook, and Instagram pages soon.