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The minority Trudeau government and its situational allies in the NDP and Bloc Québécois made a big show last week of their refusal to back down on Bill C-18 in the face of Google and Meta’s threats to remove Canadian media from their platforms.

Not only did they refuse to reverse course on a law that forces Big Tech to pay to link to online news stories, but Heritage Minister Pablo Rodriguez upped the stakes by announcing the federal government would suspend buying ads on Facebook and Instagram, both owned by Meta. The province of Quebec, the city of Montreal, three media companies – Postmedia, Quebecor and Cogeco – and the CBC joined the boycott.

While Mr. Rodriguez is busy drafting regulations that could assuage Google and Meta, all this drama has sidelined any examination of the government’s flawed logic. By trying to force Google and Meta’s hand, Ottawa is interfering with the free market on the debatable notion that, by rescuing existing media companies from the ravages of the digital revolution, it is saving democracy itself.

As a report released last week by the Macdonald-Laurier Institute says, “this is overwrought and confuses the continuation of certain businesses with the practice of journalism.”

There is no question that a thriving journalism industry is essential to a sound democracy. And it is equally uncontested that newspapers, TV stations and radio stations have seen almost all of their advertising revenue flow out of their pockets and into the impossibly deep ones at Meta and Google, and have been forced to move to a paid online subscription model to survive.

The solution for lawmakers in Canada, as well as in the United States and Australia, is to return some of those ad dollars to media companies by forcing Google and Meta to pay to link to their online stories.

Like any other favoured-industry policy, C-18 distorts the marketplace by protecting certain companies from reality. It is also extremely fraught in Canada – and perhaps even a threat to journalism – because Bill C-18 will rely on the Canadian Radio-television and Telecommunications Commission to determine which “qualified Canadian journalism organizations” are eligible for payments.

That determination will in part be based on value judgments about what kind of journalism is worthy (sites that focus on sports, arts or entertainment won’t qualify), and whether they operate under what the government deems to be acceptable journalistic principles.

That means the CRTC, which is essentially a licensing body, could wind up with the power to cut a media company off from millions in funding if it finds itself displeased with the way the company operates.

Among other problems, Bill C-18 creates the perception that some media are preferred by the government of the day, and it will reinforce the industry status quo by stifling innovative startups that don’t fit with Ottawa’s notion of acceptable journalism.

There are far better ways of helping media adapt to the digital world. The most obvious one would be for Ottawa to increase the existing tax credit available to people who subscribe to an online news service.

The current credit is minimal: 15 per cent of the amount spent, for a maximum credit of $75. The authors of the Macdonald-Laurier Institute report recommend the credit be increased to 100 per cent, with no maximum. A more modest proposal would be to match the tax refund for donations to federal political parties, where a $500 donation results in a non-refundable $350 tax credit. (The institute’s report also rightly calls on Ottawa to stop letting the publicly funded CBC sell advertising in competition with private business.)

Whatever the level of tax credit, such a system would take the decision about which media get financial support out of the hands of government-appointed media watchdogs and put it into those of readers.

In turn, that would push newsrooms to innovate, in order to build up a durable revenue base from readers. A reader tax-credit system would also remove any (rational) suspicion that journalistic independence was being compromised. Readers, not the CRTC, would be the ones to judge if a newsroom’s efforts were up to snuff.

In short, there are clearly better ways of supporting Canadian media than the mess of Bill C-18.

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