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A report has revealed the publicly funded CBC and other broadcasters would get the majority of the $329-million a year Bill C-18 would inject into the news industry if it becomes law.

Fred Lum/the Globe and Mail

Broadcasters, including the publicly funded CBC, would get most of the $329-million a year the federal online news bill would inject into the news industry if it becomes law, according to a report by the Parliamentary Budget Officer (PBO).

Papers and the online news media would get less than a quarter of the funding pumped into journalism by tech giants Facebook and Google, the report says.

The analysis by the PBO, an independent body that provides economic and financial analysis to MPs and senators, concluded that newspapers and online media would get $81,550,000 a year, while broadcasters such as the CBC, Bell, Shaw and Rogers stand to get $247,677,000 if the bill becomes law.

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Michael Geist, the University of Ottawa’s Canada Research Chair in Internet Law, said the analysis undermines the government’s claim that bill C-18 would breathe life into struggling local papers.

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“The fact that three-quarters of the money will be going to broadcasters, some of which are the richest companies in Canada, plus the public broadcasters which are heavily subsidized already, undermines the government’s whole premise of the bill,” he said. “Papers will be left fighting over the scraps.”

The PBO cost estimate follows its wider analysis of Bill C-18 earlier this month, which estimated that the bill would inject $329-million a year into Canada’s news industry.

Laura Scaffidi, a spokeswoman for Heritage Minister Pablo Rodriguez, questioned its analysis suggesting papers would lose out to broadcasters, including the CBC.

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“The PBO report is based on a hypothesis. We can look to Australia as an example of what has happened as a result of similar legislation. Smaller media got their fair share, actually averaging even more than larger media. Bill C-18 is Canada’s approach to that model, with extra measures to ensure that local media are fairly compensated by the tech giants.”

To arrive at the figures for its supplementary report, the PBO said it examined expenditure on news production. It also consulted the industry, looked at figures from government officials, including at the Canada Revenue Agency, and spoke to the Canadian Radio-television and Telecommunications Commission.

The PBO also looked at what has happened in Australia where a law, on which Canada’s online-news bill is based, is already in operation.

The PBO report estimated there will be millions in transaction and compliance costs, which could mean the funds reaching papers, and digital media, could be less than $81-million a year.

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“While the focus of our report on Bill C-18 was to provide an estimate of the direct federal costs, we were also able to provide an illustrative analysis of the potential financial impact on news businesses in Canada based on the recent Australian experience and our consultations with Canadian industry and government officials,” Yves Giroux, the Parliamentary Budget Officer, said.

The Conservatives have accused the Liberal government of trying to rush the bill through the Commons without hearing from witnesses such as Facebook.

Tory MPs this week tried to pass a motion to get more time for scrutiny at the Commons heritage committee but it was voted down by Liberal MPs.

Mr. Rodriguez is due to appear on Friday in front of the heritage committee to take questions on Bill C-18.

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He has said the bill is needed to bolster Canada’s struggling news industry, including local and regional papers after advertising revenue migrated to the tech giants.

At the committee on Tuesday, MPs heard that in some provinces, including Saskatchewan, as many as half of small local newspapers may not qualify for compensation from tech giants because they do not have the two staff required under the terms of the bill.

Dennis Merrell, executive director of the Alberta Weekly Newspapers Association, said in that province around 50 per cent of media outlets may not be big enough to participate in the scheme.

Bill C-18 will make digital news platforms such as Facebook and Google do deals with news groups and pay for reusing their articles. Many deals have already been done voluntarily, even though the bill is still being discussed in the Commons and has not yet become law.

Facebook and Google have said they wish to support Canada’s news industry, but have questioned why they should have to pay for including links to articles, when they help readers find them.