Question Period Note: Online News Act - Bill C-18

• News outlets support a healthy democracy. The Government is committed to support access to news and information that Canadians need to fully participate in democratic society.
• Digital platforms are global businesses that hold significant reach and influence in Canadian society. This influence comes with responsibility to individuals, and to the societies in which they operate.
• The Online News Act ensures that the revenue of digital platforms is shared more fairly with Canadian news outlets. It provides a market solution by facilitating fair commercial agreements between online platforms, with minimal government intervention.
• This bill will contribute to the sustainability of the news sector, including the sustainability of independent local news businesses.

• News outlets play a vital role in maintaining a healthy democracy. News and journalism serve to inform communities, drive civic engagement, and counter the rise of disinformation. Our news industry fosters an informed citizenry by providing them with critical information that is in the public interest. Access to this important content helps Canadians fully benefit and participate in democratic society.
• 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 cannot be recouped with online revenues. The COVID-19 pandemic has further exacerbated this crisis. 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 several ways (e.g., the Local Journalism Initiative), but supports alone cannot redress the structural decline of the current business model.
• A small number of digital platforms derive significant financial benefits from their operations in Canada, including the selling of audiences to advertisers; thereby undermining the traditional cross-subsidization model that supports news media. In 2019, online advertising revenues in Canada were $8.8 billion, with Google and Facebook receiving 80 percent of these revenues.
• Recently, Facebook and Google have reached commercial agreements to fund certain Canadian news media organizations directly and are building partnerships with several news organizations. These contributions are made on a voluntary basis without regulatory oversight.
• 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 U.K.) have developed legislative approaches to this issue. In conjunction with these countries and others, the Department of Canadian Heritage (PCH) have made efforts to diversify content online through a multi-stakeholder working group with civil society and the private sector. They have developed guiding principles including one on the fair compensation for digital content creators.
• Beginning in April 2021, PCH engaged in multiple phases with a variety of stakeholders in the sector. In phase 1, PCH remarked a division on preference of the two proposed approaches among stakeholders. Phase 2 was the publication of the What We Heard Report which consisted of key policy considerations regarding fair revenue sharing between digital platforms and news media and other additional comments. Phase 3 consisted of roundtables with Indigenous publishers.
• The Minister of Canadian Heritage’s 2021 mandate letter requested that he introduce a bill as soon as possible.
• Digital platforms are global businesses that hold significant reach and influence in Canadian society. This influence comes with responsibility to the individuals and societies they serve. The proposed legislation is part of the government’s broader effort to address social and economic issues caused by digital platforms, including Bill C-11 and upcoming legislation addressing online safety.
• Tabled on April 5, 2022, Bill C-18 addresses the specific issue of market imbalance in negotiations between news media and digital platforms. This new legislation will promote a level playing field between news media and large digital platforms when negotiating fair commercial deals. The proposed approach is flexible, market-based, and will lead to increased bargaining power for Canadian news outlets vis-à-vis large digital platforms. The bill defines the role and tools of the Canadian Radio-television Telecommunications Commission (CRTC) as the regulator.
• The key objective of the bill is to encourage platforms and news businesses to reach voluntary agreements. Failing that, it provides for mandatory negotiation, backstopped by final offer arbitration. Large platforms that have a significant bargaining power imbalance with news businesses are subject to this legislation. A platform is considered to have a significant bargaining power imbalance if it is large and occupies a prominent position in a Canadian market (e.g., social media, search) that gives them a strategic advantage over news businesses.
• All news businesses that are designated as a Qualified Canadian Journalism Organization (QCJO) under the Income Tax Act are eligible. Other organizations, regardless of media (newspapers, news magazines, public and private broadcasters, digital-only outlets), that meet core QCJO criteria would be eligible. Eligibility of news businesses would be assessed by the CRTC.
• Once the bill receives Royal Assent, the Governor in Council would publish regulations specifying the application of the Act and the criteria for any exemption. The CRTC will set out the processes and procedures to implement the Act.
• Overall, the reactions to the bill are positive. The political parties see the need for the bill. The Fédération professionnelle des journalistes du Québec (FPJQ) and the Fédération nationale des communications et de la culture (FNCC - CSN), CBC/Radio-Canada as well as Québécor also positively welcomed the bill. Both Google and Meta have indicated that they will carefully review the bill to understand its implications.

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