Digital giants will have six months to negotiate private deals to compensate Canadian media outlets for reusing their news content or be forced to reach an agreement, if a new federal bill becomes law.
"Right now, the health and future of the news industry — especially local news — are at risk," Heritage Minister Pablo Rodriguez said at a news conference Tuesday in Ottawa after introducing the bill.
“With this bill we are seeking to address this market imbalance," he said.
"We want to make sure that the news media and journalists are fairly compensated for their work. Now more than ever, Canadians need reliable and credible information, especially in a time of greater mistrust and disinformation.”
The bill, designed to support Canada's independent media, is modelled on an Australian law making tech companies such as Google and Meta, which owns Facebook and Instagram, pay for news content on their platforms.
While news media companies lauded the bill, tech companies said they wanted to review it before commenting.
In Australia, Facebook introduced a temporary ban on Australians viewing and sharing news in protest at its draft law. It lifted the ban last February after striking a deal with the Australian government over its legislation.
Google has previously criticized the Australian law, saying its arbitration model was unbalanced and unpredictable.
“We are currently reviewing the proposed legislation in detail and look forward to engaging with stakeholders once we more fully understand what the bill entails,” said Rachel Curran, public policy manager at Meta.
Google said it was "carefully reviewing the legislation to understand its implications."
New bill will force tech giants to negotiate deals to pay media to use their content. #CDNPoli
"We fully support ensuring Canadians have access to authoritative news and we look forward to working with the government to strengthen the news industry in Canada," said Lauren Skelly, a spokeswoman for Google Canada.
Canada's law will set up a process for digital platforms to privately negotiate deals with newspapers, magazines and digital news groups, as well as broadcasters that publish news online.
It will permit news organizations big and small to team up to bargain collectively with digital giants for compensation.
If they cannot reach a deal within six months, the tech platforms will be forced into mediation with news outlets and if that doesn't work then binding arbitration. Rodriguez said arbitration would be "a last resort."
Digital platforms that fail to comply with the new law could face penalties of up to $15 million per day for repeated non compliance, according to a briefing by senior federal government officials provided to media on the condition they not be named.
The bill was welcomed by News Media Canada, which represents more than 500 print and digital titles across Canada, saying it "levels the playing field and gives Canada’s news publishers a fair shot and doesn’t require additional taxpayer funds."
“This approach has been a shining success in Australia, where publishers large and small are inking meaningful content licensing agreements,” said Jamie Irving, chair of News Media Canada. “Trusted information is needed more today than ever before, and real news reported by real journalists costs real money."
Marla Boltman, executive director of FRIENDS, an advocacy group that promotes public broadcasting, said the organization is still looking at the bill to make sure the necessary transparency is there, as well as ways to level the playing field.
“With this legislation, Canada is clearly picking up where Australia left off and there is real potential for us to emerge as a leader when it comes to protecting news and journalism, and ultimately, our democracy," she said.
Rodriguez said "the reality is grim" in Canada's news industry, with 451 news outlets closing their doors since 2008.
At least one third of Canadian journalism jobs have disappeared since 2010, he added.
Meanwhile, billions of advertising dollars have migrated from traditional news sources to tech platforms.
Online advertising revenue reached $9.7 billion in 2020 with Google and Facebook taking 80 per cent, the Heritage Department said.
“That’s an incredible chunk of power in the market," Rodriguez said.
He said a deal to support journalism in Canada was important not just to support robust, independent reporting, but to counter the rise of fake news and disinformation on the internet.
While the Canadian bill was modelled on the Australian system, Rodriguez said his bill was tailored to Canada's media landscape. He said he had been consulting with digital platforms and wanted to introduce a "transparent" process.
The government will take an "arm's length" role, he said, giving tech giants space to negotiate private deals with news outlets.
At a virtual conference on the future of news in Canada in February, Richard Gingras, Google's vice-president of news, signalled the search engine is not opposed to regulation and is willing to "step up and do our part."
But he said it is important to "protect the open internet" and the principle of free linking between sites.
Meta said Tuesday links to news articles and previews make up only four per cent of what people see on their Facebook feed, and that the company has committed $18 million in the last seven years to programs and partnerships with media in Canada.
It has also signed commercial deals with 18 news publishers that pays them to link additional news stories not already posted on Facebook.
The Canadian bill will ensure that a portion of compensation will be used to support the production of local, regional and national news, as well as Indigenous and racialized content.
The proposed Online News Act, known as Bill C-18 in Parliament, will appoint the Canadian Radio-television and Telecommunications Commission (CRTC) as a regulator.
The CRTC will monitor for non-compliance by digital platforms and ensure that the independence of news outlets is not undermined by the deals.
Newspapers, magazines, digital news organizations and broadcasters which produce original news on websites, will be able to take part in the process.
But to do so they must qualify as a Canadian journalism organization under the Income Tax Act or operate in Canada employing two or more journalists.
This report by The Canadian Press was first published April 5, 2022.
Meta funds a fellowship that supports journalism positions at The Canadian Press.