The federal government and Google sealed a $100-million deal to keep Canadian news on the platform.Sean Kilpatrick/The Canadian Press
The federal government has passed a new law that will require tech companies like Google and Meta to compensate Canadian news organizations for the content that appears on their platforms. The Liberals argued that the new law, called Bill C-18, would help the Canadian news industry, which has seen massive drops in advertising revenue over the past decade.
The bill has been sharply criticized by the tech giants. In response to the passing of the bill, Meta said it has begun the process to end access to news on Facebook and Instagram for all users in Canada. After months of fraught negotiations, in late November Ottawa announced it had sealed a deal with Google, heading off a threat to block Canadians’ ability to search for news on the platform. Previously, Google had threatened to remove news links when the law comes into effect.
Here is what you need to know about Bill C-18, whom it will affect and how tech companies are reacting.
What is Bill C-18?
Bill C-18 is legislation that would force tech companies such as Google and Meta to negotiate compensation deals with news organizations for posting or linking to their work. The federal government has said the bill will help the Canadian news industry, which has seen large amounts of advertising revenue migrate to Google and Facebook. The legislation would allow news outlets to reach private deals with the tech companies. If an agreement cannot be reached, news outlets would go to Canadian Radio-television and Telecommunications Commission (CRTC) for mediation. Facebook, Google and Apple have already signed partnerships with some news organizations, including The Globe and Mail, to pay for the rights to use their news articles.
The Parliamentary Budget Officer, an independent body that provides economic and financial analysis to MPs and senators, reported that the bill would give the Canadian news industry a cash injection of around $329-million annually.
What is the bill’s status?
The bill became law on June 22 after receiving royal assent and passing through the Senate on June 22. The law will come into effect Dec. 19.
The Liberal government first introduced the legislation on April 5, 2022. Heritage Minister Pablo Rodriguez, who tabled the bill in the House of Commons, said it seeks to address the “market imbalance” that exists between news outlets and tech companies. In December, 2022, the House of Commons approved the bill.
How have the tech companies responded?
Meta
On August 1, Meta said it’s removing news on Instagram and Facebook for all Canadian users over the course of the next few weeks. Meta was previously running a test that limited news for up to five per cent of its users.
“As we’ve always said, the law is based on a fundamentally flawed premise. And, regrettably, the only way we can reasonably comply is to end news availability in Canada,” Meta spokesperson Andy Stone said on Twitter.
There is precedent for the escalation. In Australia, where similar legislation was passed last year, Facebook temporarily blocked news feeds from international and domestic publications, and wiped out pages for Australian state governments and charities.
Meta’s latest move comes as a blow to the government, which had hoped Bill C-18 would lead to the tech giant entering into more deals with news outlets for posting and linking to their work. In response to Meta’s announcement it would block news content, Heritage Minister Pablo Rodriguez said on July 5 the federal government will stop advertising on Facebook and Instagram. Mr. Rodriguez described Meta’s decision as “unreasonable” and “irresponsible.” The Quebec government and City of Montreal also said they would stop advertising on the social media platforms.
News and telecommunications company Quebecor also announced on July 5 it would immediately withdraw advertising from Facebook and Instagram. Quebecor owns the telecommunications company Videotron, TVA Group, specialty channels and magazines, and the Journal de Montreal and Journal de Quebec newspapers.
Just weeks before the law will go into effect, the federal government and Google sealed a deal, heading off the search engine’s threat to block Canadians’ ability to search for news on its platform. Under the agreement, Google will pay $100-million a year, indexed to inflation, into a fund run by the news industry, or “collective” which will then distribute it.
Although the agreement was welcomed by the news industry, the $100-million deal reduces substantially the amount Google was originally forecast to have to pay news organizations. In its proposed regulations earlier this year, the Heritage Department produced a formula based on Google’s global revenue that would mean that it would have to pay them at least $172-million a year.
Google will have to support a wide range of news organizations, including local papers, broadcasters and Indigenous and Francophone news groups.
Previously, Google said it will remove news links to Canadian news on its platforms in Canada when the law comes into effect by the end of the year. Google had warned that the bill could lead to a “link tax,” which would force it to pay news organizations for links to articles and “fundamentally breaks the way search (and the internet) have always worked.”
What have critics of the bill said?
Critics of the bill have said the government’s intended goal would not be achieved. Michael Geist, the University of Ottawa’s Canada Research Chair in Internet Law, has said that by “mandating payments for links, the bill creates a real threat to the free flow of information online.” He’s also said that it would harm the competitiveness of independent media and could lead to trade retaliation with the United States.
A report from the PBO said of the around $329-million the bill would generate for news outlets, around $247-million would go to broadcasters such as the CBC, Bell, Shaw and Rogers. Newspapers and online media would get around $81,550,000 a year.
Mr. Geist also said Facebook’s withdrawal from news in Canada would be disastrous. “Everybody loses,” he said. “This is going to result in tens of millions of losses for Canada’s media and Canadians losing access to services.”
American trade associations, including the United States Chamber of Commerce and the National Foreign Trade Council, sent a joint letter to U.S. President Joe Biden raising trade concerns Bill C-18 would have on American companies. Prime Minister’s Office officials confirmed that Bill C-18 would be among issues discussed during Mr. Biden’s visit to Ottawa this week.
What has happened in other countries when similar legislation took effect?
Canada’s Bill C-18 was inspired by similar legislation in Australia, which became law in March, 2021. The News Media Bargaining Code gave the Australian government power to make Meta and Google negotiate content supply deals with news outlets. According to a report from the treasury department, the tech firms have inked deals with 30 companies. These deals have amounted to more than 200-million Australian dollars for Australian news outlets, according to Rod Sims, the competition czar who helped initiate the bill.
On Bill C-18, Canada has a clear choice: flourish like Australia or flounder like Spain
What other bills related to the internet has the government passed or is considering?
Bill C-11
Bill C-11 is a new law that updates Canada’s broadcast laws, giving the CRTC the power to regulate streaming platforms such as Netflix, YouTube, Amazon Prime and Spotify. The bill requires streaming platforms to promote Canadian content – including films, TV shows, music and music videos – and contribute financially to their production. The bill received royal assent in April.
Bill C-21
Introduced last June, Bill C-27 is a privacy law that would give Canadians more control over their personal data, impose fines for non-compliant digital platforms and introduce new rules for the use of artificial intelligence. It is currently being considered in the House of Commons.
With reports from Michelle Carbert, Marie Woolf and The Canadian Press
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Samantha Edwards