Question Period Note: News Media Remuneration

A healthy news sector is central to democracy. The health of the Canadian news and information ecosystem is at risk, as many news media businesses have experienced substantial economic decline over the last decade. Digital platforms derive significant profits by playing a gatekeeper role in what information Canadians access online. In the last Speech from the Throne (September 2020), the Government committed to ensuring that revenues of online platforms are shared more fairly with Canadian creators and media.

• A healthy news sector is central to our democracy, and dominant online platforms should play a part in supporting journalism in Canada.

• We encourage market solutions that support Canadian journalism, including platforms negotiating agreements with news outlets. However, negotiated agreements may not fully address the needs of the sector.

• The Government is currently looking at a made-in-Canada approach to ensure the revenue of web giants is shared more fairly with Canadian media.

• In its last Speech from the Throne, delivered in September 2020, the Government committed to ensuring that revenues of online platforms are shared more fairly with Canadian creators and media. This commitment was reaffirmed in the former Minister of Canadian Heritage’s supplementary mandate letter from January 15, 2021.
• The health of the Canadian news and information ecosystem is at risk, as many news media businesses have experienced substantial economic decline over the last decade. Collectively, television, radio, newspapers and magazines (all advertising-dependent media) have lost $4.9 billion over the past 12 years. This is not being made up for by online revenues. The COVID-19 pandemic has amplified the crisis and exacerbated the decline in advertising revenues. At least one third of Canadian journalism jobs have disappeared since 2010. From 2008 to August 2021, 449 news outlets have closed, while only 172 new outlets have opened. The Government supports journalism in a number of ways (e.g., the Local Journalism Initiative), but those supports do not address the structural decline of the business model.
• A small number of digital platforms have come to derive significant financial benefits from their operations in Canada, by dominating how Canadians navigate the internet. Digital platforms are unparalleled at selling audiences to advertisers, thereby undermining the traditional cross-subsidization model that has historically supported news media. In achieving this dominance, they have been able to extract significant returns. In 2019, online advertising revenues in Canada were $8.8 billion, with Google and Facebook having a combined share of 80% of these revenues.
• The statutory review (2019) of the Copyright Act and the Broadcasting and Telecommunications Review Panel Report (2020) both highlighted the need for action related to the remuneration of news media.
• Several countries (Australia, France, the UK) have developed legislative approaches to this issue. The Department of Canadian Heritage (PCH) led international efforts on diversity of content online through a multi-stakeholder working group with like-minded countries (Australia, Finland, Canada, France and Germany), civil society and the private sector, and has developed guiding principles, one of which speaks to fair compensation for digital content creators.
• Beginning in April 2021, PCH initiated a phased engagement strategy with a variety of stakeholders in the sector. In phase one, PCH sought input on two proposed approaches. Stakeholder opinion on the way forward was polarized. News Media Canada typically supported the arbitration option while some unions, smaller digital first news organizations, and organizations representing equity seeking communities typically showed more support for mandatory contributions. In phase two, PCH published a What We Heard Report on key policy considerations regarding fair revenue sharing between digital platforms and news media and sought additional comments from the public and interested stakeholders. Phase 3 consists of roundtables with Indigenous publishers and is currently underway.
• Recently, Google and Facebook have reached commercial agreements to fund certain Canadian news media organizations directly and are building partnerships with a number of news organizations. However, contributions are made on a voluntary basis, and in the absence of regulatory oversight.
Facebook’s News Innovation Test
• Over the past several months, Facebook has struck commercial deals with 17 Canadian media organizations including Torstar, Le Devoir, the Globe and Mail, and Village Media. The trial initiative, called the News Innovation Test, will see the social media company pay publishers to link to selected articles on their websites. Per the press release, the test is “a new initiative to help promote a healthy news ecosystem, elevate authoritative journalism, and deliver a valuable experience for people on Facebook who are interested in news.’’ Facebook has said that the program is still in testing and thus is not yet available to Facebook users in Canada. In addition to this initiative, Facebook has committed to spend $1 billion globally on supporting news and journalism over the next three years.
Google News Showcase
• Google News Showcase, launched in Canada on October 27, 2021, is a service designed to give news from trusted publishers a higher profile and help drive traffic to the publishers’ websites. News Showcase is part of Google’s commitment to investing $1 billion in journalism globally.
• To date, Google has announced partnerships with 11 Canadian media organizations, including Torstar, Le Devoir, the Globe and Mail, and Village Media. Together, these partnerships include over 100 publications across the country.
• As of February 2021, Google has signed deals with over 500 publications globally including in Germany, Brazil, Australia, Argentina and the U.K., with the number of publications continuing to grow. Notably, reporting from the British publication the Press Gazette suggests that deals struck by Google in Australia are significantly more generous than those struck in other countries, including Canada.
• Google has not shared details around the structure and value of the licensing agreements, and media reporting suggests these deals include strict confidentiality clauses. Brad Bender, Google's vice-president of product management for news, said the arrangements are meant to compensate media companies for their “editorial curation.”
• As of October 2021, News Media Canada, a group that represents over 830 publishers, affirmed that commercial arrangements reinforce the need for small and large news organizations to seek a method of fair compensation that works for all, as deals with Google will only apply to a relatively small number of news organizations.

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