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A 3D printed Facebook's new rebrand logo Meta is seen in front of displayed Google logo in this illustration taken on November 2, 2021.DADO RUVIC/Reuters

The federal government introduced legislation Tuesday requiring major tech giants, such as Facebook and Google, to compensate Canadian media outlets for the news content that appears on the global platforms.

Bill C-18 would create a framework for news outlets to collectively negotiate deals with tech companies to share online advertising revenues when the parties cannot reach a privately negotiated agreement.

The bill, known as the Online News Act, aims to compel tech giants, which dominate the online advertising market, to contribute to the sustainability of Canada’s struggling news sector.

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 giants.

“The news sector in Canada is in crisis and this contributes to the heightened public mistrust and the rise of harmful disinformation in our society,” Mr. Rodriguez said during a news conference on Parliament Hill. “We want to make sure that news outlets and journalists receive fair compensation for their work.”

News outlets argue the dominance of tech companies has left few advertising dollars for everyone else. Online advertising revenues reached $9.7-billion in 2020, with Google and Facebook earning more than 80 per cent of that amount.

Several Canadian news organizations and industry lobby group News Media Canada, of which The Globe and Mail is a member, have urged the federal government to follow Australia’s example and introduce industrywide measures that force tech companies to pay for content.

The legislation in Canada would allow collectives of news outlets to reach private deals with tech giants. If an agreement cannot be reached, the bill would permit news outlets to go to the Canadian Radio-television and Telecommunications Commission for mediation.

If mediation fails, the CRTC would initiate arbitration through a three-member panel, which would issue a binding contract for the news outlet (or outlets) and the digital platform. The CRTC would also have the power to impose penalties of up to $15-million a day on platforms that don’t comply with the rules.

Facebook, Google and Apple have already signed partnerships with some news organizations, including The Globe, to pay for the rights to use their news articles.

The agreements could exempt the digital platforms from mandatory CRTC-led bargaining if they meet six requirements, such as providing fair compensation to the news outlets for their content that is posted on digital platforms and ensuring an appropriate portion of the digital ad revenues be used to support the production of news content.

It is unclear if the existing agreements meet the requirements for an exemption, as the details of the partnerships are not public.

News Media Canada chair Jamie Irving welcomed the bill Tuesday.

“Trusted information is needed more today than ever before, and real news reported by real journalists costs real money. This legislation levels the playing field and gives Canada’s news publishers a fair shot and doesn’t require additional taxpayer funds,” Mr. Irving said in a statement.

The Globe’s publisher and chief executive officer, Phillip Crawley, said the growing trend of platforms compensating publishers for their content is positive. He said the newspaper is “supportive of initiatives to support the media industry at large,” adding that its greatest concern with any legislation is ensuring press independence is maintained.

Kevin Desjardins, president of the Canadian Association of Broadcasters, said compensation for broadcasters for the use of their news content is essential to ensure they can continue to sustainably fund newsgathering.

In a statement, Meta (Facebook’s parent company) said news-article links and previews only make up about 4 per cent of what people see on their Facebook feeds. Rachel Curran, Meta Canada’s public-policy manager, said the company is reviewing the legislation.

Google Canada spokesperson Lauren Skelly said the platform is also reviewing the bill.

Since the Liberals hold a minority of seats in the House of Commons, they will require the help of another party to pass the bill. The NDP said it will put pressure on the Liberals to ensure deals are transparent and accessible to Canadian news outlets, and that money paid by tech giants supports journalists and not media executive bonuses, heritage critic Peter Julian said.

Conservative heritage critic John Nater said his party is reviewing the bill but believes news outlets should be fairly compensated for the use of their content by digital platforms.

The Bloc Québécois said the bill should be amended to incorporate a special fund to help smaller news outlets so they can compete with larger media organizations.

In a blog post Tuesday, Michael Geist, law professor and Canada Research Chair in internet and e-commerce law at the University of Ottawa, said the bill represents a “government-backed shakedown that runs the risk of undermining press independence, increasing reliance on big tech and hurting competition and investment in Canadian media.”

Bills C-18 is part of a larger legislative push by the Liberal government to regulate the internet. Earlier this year, it tabled the Online Streaming Act, which aims to level the playing field so streaming services would fall under some of the rules that apply to traditional broadcasters.

Ottawa is also in the process of developing a third bill that would address harmful online material, such as child exploitation and terrorist content. Last week, Mr. Rodriguez announced the creation of an advisory group of Canadian experts who will provide advice on a legislative and regulatory framework for this prospective bill.

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