New Legislation Will Profit Large Canadian Media Outlets by Over $300 Million, Says PBO

Parliamentary Budget Officer Yves Giroux waits to appear before the House of Commons Finance Committee on Parliament Hill in Ottawa on March 10, 2020. The Canadian Press/Adrian Wyld

New legislation will profit large Canadian media outlets and publishers by upwards of $329 million in government subsidies, if passed, according to Parliamentary Budget Officer (PBO) Yves Giroux.

“We expect news businesses to receive a total compensation around $329.2 million per annum from digital platforms and spend about $20.8 million in transaction and compliance costs for negotiating their first deals under the Bill,” wrote the PBO in his “Cost Estimate for Bill C-18: Online News Act,” as first reported by Blacklock’s Reporter.

Bill C-18 is titled “An Act respecting online communications platforms that make news content available to persons in Canada” and will regulate “digital news intermediaries,” such as Google and Facebook, in order to “enhance fairness in the Canadian digital news marketplace and contribute to its sustainability.”

In short, C-18 will compel internet and social media giants to make deals for sharing ad revenue with online Canadian news outlets.

The bill, which is sponsored by Heritage Minister Pablo Rodriguez, is currently up for consideration by committee in the House of Commons.

If passed, the PBO said it expects the total cost of developing and implementing the bill to be around “$5.6 million per year over 5 years” for the Canadian Heritage Department and the CRTC.

“The new regulations will give rise to regulatory compliance costs for businesses as well as costs to negotiate and enforce agreements,” wrote the PBO. “This will in turn have fiscal consequence for the federal government.”

‘More Mistrust’

Independent publishers testifying before the House of Commons Canadian Heritage committee on Sept. 23 criticised Bill C-18 as a bailout for “struggling media corporations.”

“I suspect that what we see here is a form of rent-seeking behaviour in which struggling media corporations are using every last iota of their dwindling financial and social capital to lobby for subsidies and regulations,” said Jen Gerson, co-founder of an online newsletter called “The Line.”

Gerson added that “the more the federal government tries to help the media, the more it risks hurting our credibility.”

“When the federal government tries to save the media, the media becomes a legitimate target for partisan attacks, which undermines our fundamental democratic role and function,” she said.

Testifying before the committee on Sept. 27, former CRTC commissioner Peter Menzies said Canadians’ trust in media has “never been lower.”

“It’s going to create more mistrust and it’s not going to end well,” Menzies said about C-18.

When Rodriguez presented the bill in April, he said Canada’s news sector “is in crisis and this contributes to the heightened public mistrust and the rise of harmful disinformation in our society.”

However, “the more that relationship is broken, the more subsidy will be required,” he added.

Noe Chartier contributed to this report.