The tawdry tale of Canada’s Online News Act took what is likely to be its final twist this week when the federal government announced it had reached an agreement with Google to fund news organizations.
Heritage Minister Pascale St-Onge, as expected, termed the deal “historic” and insisted there were “absolutely no concessions” on the government’s part. How her nose did not grow at least two feet longer while saying this is quite beyond me.
Because the facts of the matter are that for the past two months, the government and the news industry lobbyists who promoted the act (Bill C-18) have been desperately trying to placate Google in order to prevent it from doing what Meta had already done—block news links in Canada.
To be more specific, people have not been able to post or read news links on Facebook or Instagram since August when Meta, following the passage of Bill C-18, chose to disengage from the news business rather than empty its pockets to publishers and broadcasters alleging (without evidence) that their content was being “stolen.”
Google had indicated it would act in a similar fashion unless the government manipulated the regulations supporting Bill C-18 to address its concerns. It was clear that, among other apprehensions, it needed a cap on its financial liability and that it couldn’t possibly comply with the expectation that it engage in what would have been multiple negotiations and arbitrations.
For a long time, it appeared that there was no way the government would be able to mollify Google other than by amending the act itself. But it turns out that the bureaucrats at Canadian Heritage were able to get the regulations to say what Google needed them to say to agree to disarm and pay the amount of money it was always willing to pay—$100 million.
What that means is that the news industry will now form itself into a single collective consisting of broadcasters, legacy print media, digital startups, and assorted others. Who will determine membership and how remains unclear.
The next step for the collective will be defining what roles qualify as “journalism” jobs. For instance, will it be just reporters or will the count include commentators, photographers, illustrators, and editors? That will be necessary because when it comes to dividing up the $100 million, it will be done purely on a per journalism employee basis. (I am assuming this because that is the sort of arrangement Google was looking for and it is relatively non-contentious.)
At the end of the day, while Bill C-18 was originally designed to enforce “commercial” agreements, the outcome is that we have a fund very much like the one proposed by Konrad von Finckenstein and myself in our policy paper “And Now The News” for the Macdonald-Laurier Institute.
But here’s the rub. Prior to the introduction of the Online News Act, Google already had deals in place with publishers such as the Toronto Star, the Globe and Mail, Postmedia, and others, including broadcasters. It is extremely likely that the amount of money that once was flowing from Google through those agreements (they are private so we don’t know their value) will now be diverted to the $100 million “collective” pot. That means the net benefit of St-Onge’s “historic” deal is probably considerably less than $100 million.
And there’s nothing in this that’s going to bring Meta back into the game.
“We have long been clear that the only way we can reasonably comply with the Online News Act is by ending news availability in Canada,” a Meta spokesman confirmed with CBC News.
Given Meta’s claim that it was once driving $230 million annually in value to news organizations, that means that as a result of Bill C-18 even after this week’s settlement with Google, the Canadian news industry will have lost about $150 million in revenue.
It gets worse.
The Online News Act was originally promoted by legacy newspaper publishers—the group hardest hit by the invention of the internet and its plethora of alternative advertising and information platforms. Then the broadcasters, including CBC, muscled their way into the conversation.
So now, with the $100 million being divided up on a per-journo basis, guess who has the most journalists? The CBC/Societé Radio Canada of course. Next up is Bellmedia with its TV, radio, and online reporters, probably followed by Rogers. In fact, preliminary estimates were that 75 percent of the cash produced by Bill C-18 would go to broadcasters.
That leaves $25 million for the far more financially desperate legacy print publishers who, as noted, already had deals with Google.
Don’t get me wrong. It is a good thing the government found a way to surrender to Google and avoid the nuclear option of it de-indexing news from its search engine. That would have been catastrophic.
But there is no amount of lipstick that can pretty up the Bill C-18 pig.
Its impact has indeed been historic—a calamity of unprecedented proportions engineered by a government determined to “help.”
