THE STANDING SENATE COMMITTEE ON TRANSPORT AND COMMUNICATIONS
EVIDENCE
OTTAWA, Wednesday, June 9, 2021
The Standing Senate Committee on Transport and Communications met by videoconference this day at 6:30 p.m. [ET] to examine Bill S-225, An Act to amend the Copyright Act (remuneration for journalistic works).
Senator Michael L. MacDonald (Chair) in the chair.
[English]
The Chair: Honourable senators, my name is Michael MacDonald. I’m a senator from Cape Breton, Nova Scotia and I’m chair of the committee.
Today we are conducting this meeting of the Standing Senate Committee on Transport and Communications by video conference. Participants are asked to have their microphones muted at all times. Before speaking, please wait until you are recognized by name. I will ask senators to use the raised-hand feature in order to be recognized. Once you have been recognized, please pause for a few seconds and let the audio signal catch up to you. When speaking, please speak slowly, clearly and do not use the speakerphone.
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Today we are continuing our examination of Bill S-225, An Act to amend the Copyright Act (remuneration for journalistic works). We have with us for the first panel Erin Finlay, Partner, Stohn Hay Cafazzo Dembroski Richmond LLP; Francis Sonier, President of Réseau Presse; Jean-Hugues Roy, Journalist and Professor, School of Media, Université du Québec à Montréal; and Edward Greenspon, President and CEO, Public Policy Forum.
In the second panel we will hear from Jason Kee, Government Affairs and Public Policy Counsel from Google Canada.
I would like to thank all our witnesses for joining us this evening. I invite Ms. Finlay, Mr. Roy, Mr. Sonier and Mr. Greenspon to give their opening remarks, followed by questions from senators.
Ms. Finlay, we begin by opening the floor to you.
Erin Finlay, Partner, Stohn Hay Cafazzo Dembroski Richmond LLP, as an individual: Honourable senators, thank you very much for the invitation to appear before you this evening on Bill S-225.
My law firm and I specialize in copyright and entertainment law, and we represent clients in the film, television, music and publishing industries. While I do represent certain clients in the news media publishing industry, I am here this evening on my own behalf and not on behalf of any of my clients or my firm’s clients. I would ask that my comments this evening be treated as my own and not be attributed to anyone else.
First, I would like to commend and thank Senator Carignan for tabling this bill. I agree wholeheartedly that we are in need of additional support for journalism and news media in this country. Now, more than ever, it is imperative that we have a unique Canadian voice; that our opinions and voices are expressed, heard and read; and that those who create the content we all read and love are fairly compensated when their works are used.
I intend to focus my comments primarily on the technical aspects of the bill. Others have spoken — and I expect will speak — to the reasons why legislative change may be required. Essentially, the argument is this: Foreign tech giants, such as Google and Facebook, have diverted 80% of all online advertising revenue to their own platforms. These tech companies make money by distributing valuable content that is created and owned by others. In so doing, they are free-riding on the backs of creators, often cannibalizing the copyright owners’ markets and sharing little, if any, of those revenues back to the creators of the content.
The question, then — at least for me — is how do we best ensure that journalists and news media publishers are properly compensated when their works are used by online platforms?
As I understand it, the bill attempts to answer that question by creating a remuneration right for journalistic works under the Copyright Act and encourages a certain licensing regime to ensure that some monies flow back to the creators of the content.
Unfortunately, however, in my view, the bill does not accomplish what I think it was intended to accomplish. At best, it creates confusion in our copyright law; and at worst, it might actually diminish or take away the copyright protection that journalists and news media publishers already have.
In Canada, journalists and news media publishers already have full, exclusive copyrights for their articles and newspapers — and this is both in print and digital — under section 3 of the Copyright Act. If you will bear with me for a moment, I’m going to put my lawyer hat on — if it was ever off — and talk a bit about why this protection is already in our act.
The Copyright Act protects both articles and newspapers as a whole as literary works and gives journalists and news media publishers the sole right — and the right to authorize others — to produce or reproduce literary works and other works, or any substantial part of literary works, and to perform those works in public. The performance right includes the right to communicate the work to the public by telecommunications, which includes communicating the work over the internet.
Full exclusive copyrights give copyright owners the right to control how their works are used, subject to any exceptions that may apply. Copyright owners typically control these rights via voluntary licensing arrangements or agreements where rights are exchanged and negotiated for some level of compensation back to the creators and owners of copyright.
Notably, creators of journalistic works, as they’re defined under the bill, can form collective societies today and they can license their works under a collective licensing scheme, including to Google, Facebook and other platforms. To date, however, copyright owners have chosen not to license these uses to these platforms via collective licensing, and that is their prerogative as copyright owners.
The remuneration right as proposed in the bill is what we call a neighbouring right. A neighbouring right is something different — and frankly less — than a full section 3 copyright. As an example, the remuneration right as proposed in the bill lasts for only two years. Copyright in a literary work typically lasts for between 50 to 70 years from the date of the death of the author. So this is something significantly less than the existing rights.
It is highly unusual to see a remuneration right run parallel with a full copyright in Canada. My concern is that such a remuneration right, as well-intentioned as it might be, might be interpreted to take away from the full copyrights that journalists and news media publishers already have. There may be other fixes or corrections to the Copyright Act that are required, but journalists and publishers currently have the rights they need to license, via collective licensing or any other way, through section 3 of the act.
Today’s journalism crisis is not a copyright protection problem; rather, it’s a bargaining position problem. Global behemoth tech giants and platforms will not come to the table to negotiate reasonable compensation for the use of journalistic works on their platforms. We need to encourage them to come to the table, and that, in my view, is where the focus should be right now.
Finally, I would encourage this committee to consult widely on this. If you have not heard from the publishing industry and the journalists themselves that this is the solution they are looking for, please do not impose licensing regimes upon them unless there is a wide consensus from copyright owners who will be affected.
I would be happy to speak to the specific technicalities of the bill and answer any other questions you may have. Thank you again for your time this evening.
The Chair: Thank you, Ms. Finlay. Next, we’ll hear from Mr. Roy.
[Translation]
Jean-Hugues Roy, Journalist and Professor, School of Media, Université du Québec à Montréal, as an individual: My thanks to all of the members of the Transport and Communications Committee for this invitation. Greetings to Senator Carignon who was the mayor of Deux-Montagnes, the city next to where I am speaking from today. I want to thank him first for the bill he introduced earlier about protecting journalistic sources. People who work in journalism had been waiting for it for a very long time. I also want to thank him for Bill S-225.
A few weeks ago, Facebook announced a partnership with 14 Canadian media as part of a project they called the News Innovation Test. Google is currently negotiating agreements with various media to use their journalistic content.
We must not delude ourselves about initiatives like these. We would not have seen them if the Minister of Heritage, Steven Guilbeault, had not announced that he was preparing a bill to force the web giants to share their revenue with the news industry. However, Mr. Guilbeault’s bill no longer exists. This morning, again, the Canadian news media published a letter in virtually every newspaper in the country to remind Mr. Guilbeault of his promise, which is why it is important to keep up the pressure on the digital giants and why Bill S-225 is a good idea.
In 2020, I estimated that Facebook had earned revenue of $210 million Canadian from the Canadian journalistic content shared on its platforms. For the first quarter of 2021 alone, we can assume that its earnings reached $63.4 million. That figure represents a 40% increase over the first quarter of 2020. That $63 million profit in three months for Facebook can be compared to the $8 million over three years that Facebook has promised to invest in news in Canada. There is a major imbalance here.
Is Bill S-225 the right way to correct that imbalance? Unfortunately, I’m not sure. The main problem with the bill lies in the definitions of the terms “journalistic work” and “journalism organization” at the beginning of the draft legislation. In my opinion, they are too vague. If I put myself in a Rebel News journalist’s shoes, for example, or in Alexis Cossette-Trudel’s, everything there applies to me. I am afraid that even people who engage in disinformation will be able to benefit from this bill. This problem could be alleviated by taking the definition of “journalist” from the Evidence Act, but that would not completely solve the problem. The other way might be to model it on the Australian law, enacted in February, which establishes two tests. The Australian law says that in order to receive royalties from Google and Facebook, news corporations must be registered. That is something that we already have in Canada. The Canada Revenue Agency confers the status of registered journalism organization, and an independent committee decides in advance who may be given that status. At present, however, it is enjoyed by only two journalism organizations.
Australia has also instituted a professional standards test. News corporations must be members of press councils in Australia or the equivalent of the Canadian Association of Broadcasters. Bill S-225 could define journalism organizations as organizations that belong to a press council, or, perhaps better still, define press corporations as corporations whose work is certified by an international standard such as is proposed by the Journalism Trust Initiative, a platform headed by Reporters Without Borders, which could, in my opinion, become an ISO-9001 standard of journalistic quality.
In addition, I wonder whether the bill provides for the creation of a collective society, a sort of journalism SOCAN. I am not sure that this is a good mechanism for redistributing royalties to news organizations. That kind of mechanism may have advantages. For example, it would require that the platforms open their databases to see how information circulates on Facebook, Instagram, Messenger and WhatsApp. In that case, I say bravo! In my opinion, it would also be essential for researchers to have access to that data in order to prevent disinformation, always respecting the privacy of users of the platforms. However, there would be disadvantages to a journalism SOCAN. I can’t see how it could be determined that a piece of information resulted in entitlement to a royalty. I have no answer to that question. I submit to the committee, however, that the media themselves are the ones that put their content in the platforms.
A payment should not be associated with a hyperlink. You don’t want to do that. It would be contrary to the very foundation of the Internet. In addition, I think it is hard to say that a particular report shared on Facebook generated particular revenue. Nor can we say, today, that an editorial by Brian Myles published on May 31 earned Le Devoir $0.67, for example, or that the one it published on May 17 is worth $0.52. It is the entire body of work that counts. For Facebook, the body of work merits our attention because 98% of its revenue comes from advertising sales. That is because part of that attention is generated by journalistic content for which Facebook can be required to pay the content producers a portion. I am not sure that the copyright approach is the best.
In closing, we can ask whether the Australian approach is the best. I’m not sure about that either, because the more I think about it, the more I like the principle of a tax on digital services, like the one proposed in the last budget. All digital companies are charged 3% of their total sales, because they are believed to earn revenue and benefits from the various Canadian cultural and news content. That tax therefore represents their share of funding that content.
The budget estimates that $900 million could be generated over the next five years with that kind of tax. That money could be paid to the Canada Media Fund whose mandate could be expanded to include information. The money would be redistributed every year by peers: by journalists.
I am now ready to answer your questions. Thank you very much.
[English]
The Chair: Thank you, Mr. Roy. We will hear from Mr. Sonier next. Please go ahead.
[Translation]
Francis Sonier, president, Réseau.Presse: Members of the committee, Réseau.Presse has been the only network of French-language newspapers serving the French-Canadian minority population since 1976.
These francophone community newspapers provide a window into the lives of the francophone minority communities in Canada and are also the cornerstone on which the development and vitality of those communities are built.
As you know, the media have been facing major challenges for over ten years and the situation continues to deteriorate. The main reason for this is that advertisers have chosen to shift to the web giants. However, the Government of Canada has also chosen to give 70% of its advertising budget to Google and Facebook, American giants that pay no royalties, at the expense of the Canadian media. Francophone minority community newspapers are no exception and they are even doubly penalized, because they do not have the critical mass of readers to enable them to generate enough advertising revenue to carry on their activities in a satisfactory way.
Thank you for allowing us to share our observations from our analysis of Bill S-225. The bill is certainly of enormous importance to us, because its intention goes to the heart of our concerns. We recognize that this bill reflects an effort and desire to protect the media and we thank you for that.
At the outset, we want to inform you that Réseau.Presse is working closely with News Media Canada and the Coalition des éditeurs francophones to have the federal government enact legislation requiring that Google and Facebook negotiate collectively with the Canadian media. Mr. Roy said earlier that we had taken a position today all over Canada. In our opinion, this bill must follow the model adopted in Australia, because, in addition to requiring that Google and Facebook pay royalties to content publishers, the Australian law comes with stringent implementation measures. That is why we believe that Bill S-225 is premature. We understand the sound reasons for amending the Copyright Act. However, that can’t be done before enacting legislation to regulate Google and Facebook.
Transversality between the two acts is essential and Bill S-225 must take into account the provisions of the future law regulating Google and Facebook, which can’t happen before that law is in place. On the topic transversality between the acts, we wish to draw your attention to the limits of the designation “Canadian journalism organization” for the purposes of the Income Tax Act. We invite the distinguished members of this committee to examine the criteria that define a Canadian journalism organization in the implementation of this act. You will have realized right away that these criteria are rather restrictive. In fact, they are so restrictive that approximately 75% of the newspapers that belong to Réseau.Presse are not able to obtain that designation and enjoy the tax benefits that result from it. That is also the case for a majority of the various small community newspapers found in all parts of Canada.
We also wondered about the proposal concerning freelance journalists and granting a licence to a Canadian journalism organization that will then be deemed to own the copyright. In 2019, Réseau.Presse had to deal with a similar case and the freelance journalists at that time systematically refused to assign their copyright to the newspaper to which they had granted a licence. They said that requiring them to assign their copyright beyond the licence granted would cause direct harm to freelance journalists, since it would prevent them from earning a living from their protected journalistic works as per the Copyright Act.
We have strong reservations about what is proposed in the bill. It must not be forgotten that because of the challenges experienced by the newspapers I referred to before, small newspapers now have almost no staff journalists and generally rely on freelance journalists.
We invite the members of the committee to take the time to study this issue in depth in order to protect the interests of this critical mass of journalists who have no fixed salary and earn their living solely from their journalistic works.
We also have to admit that every time a bill that has an impact on minority official language media is introduced, we are always surprised at the fact that there is no automatic, systematic verification of whether there are obligations that must be met under the Official Languages Act. We then find ourselves in catch-up mode. We make representations to have our language rights respected, and sometimes we have to go to the Commissioner of Official Languages to be able to exercise them. That could be avoided if legislators were proactive instead of being reactive.
In conclusion, as the distinguished members of the committee examine Bill S-225, we hope that they will put the bill on hold in order to align it with the future law to regulate Google and Facebook, among others, that they will take into account the limits of the criteria governing a Canadian journalism organization in the Income Tax Act, and that they will ensure that the smaller newspapers that do not meet those criteria are also protected by Bill S-225.
We will also review the provisions in the bill concerning freelance journalists so as not to disadvantage them and so as to protect their copyright in their journalistic works, and we will look into what provisions of the Official Languages Act must be applied to Bill S-225.
Thank you for your attention and for the invitation.
The Chair: Thank you very much, Mr. Sonier.
[English]
Edward Greenspon, President and CEO, Public Policy Forum, as an individual: Good evening, senators. As someone who worked for decades in journalism and now is involved with ensuring journalists can continue to work for decades more, I am grateful for your recognition of the critical role and public good that journalism plays and its need to be financed in Canada.
I always think it best to begin by asking what problem we are seeking to solve, and the problem here is not really one, in my mind, about copyright; that is simply a modality for reallocating funds. Rather, the problem is that producers of journalism have a broken business model in which revenue has eroded for a dozen years. Normally, you as legislators should not care about that. When I was asked to investigate the journalism industry for what became The Shattered Mirror, I said governments had no business bailing out news organizations but that they did have a responsibility for the health of our democracy. If that led back to special measures for journalism, then — and only then — would government intervention be justified.
In his landmark 1970 Senate report The Uncertain Mirror, the late senator Keith Davey said:
What happens to the catsup or roofing-tile or widget industry affects us as consumers; what happens to the publishing business affects us as citizens.
Thus, we should be clear that the problem is a threat to an essential democratic service.
I should make it very clear that I don’t mean, when I’m speaking, written media alone or long-standing news media operators alone; I mean anyone who invests in gathering original news directed at Canadian audiences in their role as citizens, regardless of the platform, storytelling method or business model.
In his testimony, Senator Carignan said there are “a plethora of possibilities in addressing the relative impoverishment of the news industry in Canada.” His recommendation of using the Copyright Act is a legitimate approach, but I think not necessarily the most direct approach. Again, the core problem we are trying to solve is the financial gulf that has grown between the producers of original news, who employ professional journalists, and the major distributors of that information who instead serve as platforms for material generated mostly by users.
I don’t think we should begrudge these platforms their success. While I do believe they need to take responsibility for their role in disseminating online hate and disinformation, that’s a question for another day. I’m sure you will hear them say that a news producer can block their searches if so desired, or that links and headlines constitute fair use of copyrighted material and are often initiated by the publishers themselves. These are not unreasonable arguments. Still, your focus must be on social consequences and the public interest. Ultimately, a bankrupt press cannot fulfill its functions as a free press. So, what to do?
Let me give a historical comparison. When cable companies, distributors of content produced by others, began to reap a disproportionate share of the revenue pie, governments brought in a cable levy to redirect a share of those funds to the production companies. This was not because cable companies were bad actors. It was because the capacity to tell Canadian stories was deemed to be in the public interest, and since cable companies were reaping those dividends, it seemed sensible and fair to redistribute 5% of their windfall.
I want to speak in the context of the Australian model and I want to quickly mention three problems with it.
One, I am concerned large platform companies will favour deals with large news companies. This may exclude local news producers, start-ups and others.
Two, although the bedrock of the policy is meant to be binding arbitration, I worry that the asymmetrical power between even a collective of news publishers and global platforms will not allow this to happen. The combined market capitalization of the so-called FAANGs on December 31, when I last looked at it, was larger than the GDP of any country in the world, except for China and the United States. Therefore, balanced outcomes may prove difficult to achieve.
Third, inviting the platforms to negotiate deals with individual publishers can badly distort the information marketplace. People have expressed concerns for decades that advertisers influence news agendas. In fact, it was rare to find an advertiser that had enough of a market share, more than 1% or 2% of a publisher’s total revenues, to do so. In contrast, I can well imagine a platform accounting for 10% or more of a news organization’s revenue under this system. They have massive public policy agendas of their own, including tax policy, regulatory oversight, data, et cetera.
You are here to strengthen the independent press, not to create new dependencies.
Recently, as you’ve been told, Facebook announced it will be giving money to select Canadian publishers. It refused to disclose how much money. As with dependency, the absence of transparency is problematic.
There is nothing inherently wrong, in my mind, with the bill in front of you. There are some specifics that are problematic, but nothing is wrong with it. A collective approach to copyright has worked in other sectors. To me, the question is whether it complicates matters unnecessarily. What is fair usage and what is not? How much money is a given news story worth? Will binding arbitration really work? Are we addressing the core problem in the most efficient manner? Is everyone involved in the “production of journalistic works,”, as stated in the bill, contributing to democracy? I’m not sure if luxury magazines and crime tabloids, for example, should be available to all.
In its recent budget, the federal government proposed a digital services tax of 3% of revenues. This is similar to the cable levy and to the first recommendation in The Shattered Mirror report, which called for a tax or levy on digital ad sales for companies that provide no support for Canadian journalism.
Of course, that then raises separate questions about how to reallocate funds to news producers. The solution could lie in something like the Canada Media Fund, but I think the Canadian public would be suspicious of discretion being exercised in the allocation of money in such a way. Better yet, I think one could design a transparent and objective allocation formula, as with the 2019 Canadian journalism labour tax credit, which Public Policy Forum, I’m happy to say, helped design.
I’m happy to answer your questions. Thank you for the opportunity to add my voice to your deliberations.
The Chair: Thank you, Mr. Greenspon.
We will now proceed with questions.
Senator Simons: Thank you very much to all of our guests. I want to direct my first round of questions to Ms. Finlay. During last week’s session, we had some debate and discussion about whether or not hyperlinks should be part of the bill and whether or not reproducing a headline or the lead of a story constituted a substantive part.
Could you just explain to us the copyright law around the sharing of links and around fair use, as well as what constitutes fair use under Canadian law?
Ms. Finlay: Thank you, Senator Simons.
There has been some case law about hyperlinks and whether that triggers the reproduction right. So far, the couple of cases we’ve had have found that hyperlinks do not trigger a copyright. I’m not going to say it’s settled law, because these things have not moved through all levels of court, but that is the status of the law today on hyperlinks.
Headlines are also a bit of a question mark. The basis of copyright is that it protects the entirety of a work or substantial part of a work. A headline, depending on — let me back up a second.
What constitutes a substantial part of a work is assessed in two ways: quantitatively and qualitatively. It’s not just that I took five seconds of a song or I took three sentences of a 40-page article. It’s also about how important the part taken is to the work as a whole. If you take the very heart of the work, even if it’s only one sentence out of a 40-page article, that could still constitute a substantial part and would be protected by copyright.
Fair dealing is a constant discussion. In Canada, fair dealing is the exception, not fair use, and it’s also not just an exception. It’s the user’s right in Canada according to the Supreme Court of Canada. Therefore, we are constantly balancing out the copyright owners’ rights with the rights of users. Fair dealing is always contextual and always depends on the circumstance of the case.
I can’t tell you for certain whether a paragraph will or will not be fair dealing. There are a number of factors that a court would consider, but it’s always a question, and it’s always in play when we’re talking about reproduction of literary and other works.
Senator Simons: The concern I had is that if Bill S-225 doesn’t include hyperlinks, which it does not as currently written, it’s hard for me to imagine what works are being shared. If it does include hyperlinks, I think you get into an issue of fair dealing and the question of whether hyperlinks do constitute republication.
I couldn’t quite see where the revenues would accrue for anyone, because I couldn’t understand at what point royalty use would be engaged.
Ms. Finlay: With the use of a hyperlink, if we think that’s the only thing that happens, there are reproductions that happen on the servers of the platforms. There are certainly arguments that entire works are being reproduced. There are entire databases of content that are being created. They’re all very good questions, and they’re technical questions in terms of what would be triggered and what wouldn’t. I would be cautious of excluding hyperlinks in a bill like this.
As I mentioned already this evening, I’m not supportive of the bill overall, because I don’t think it actually adds anything. If anything, it takes away from the rights that journalists and news media publishers already have. However, if the bill were to move forward, I would be hesitant to exclude hyperlinks at this point because it is unsettled. There would be a lot of discussion about whether hyperlinks ought to be paid for and the reproductions that happen behind the scenes or upfront. Like I said, if we’re going to move forward with the bill, I wouldn’t prejudge the situation by excluding hyperlinks.
[Translation]
Senator Forest-Niesing: My first question is for Ms. Finlay and follows on the answer she has just given us.
You say that Bill S-225 as it now stands takes away certain rights that exist now. Can you explain what existing rights are negatively affected by the bill? Then I will have a second question to ask you, if that is okay with you.
[English]
Ms. Finlay: Thank you, senator.
On its face, the language doesn’t necessarily take away rights that exist already. My point is twofold.
First, these rights already exist, and they are actually stronger as currently written in the bill. When I walked through the section 3 rights, journalists and news media publishers already have these — we call them full or exclusive rights of copyright owners. They have the sole and exclusive right to authorize, make use of or reproduce the work. Those are the biggest copyrights that one can have. When we talk about remuneration rights, those are usually something different. Those usually sit with someone who doesn’t have a full copyright but is entitled to be paid because of some other use.
An example in section 81 of the act is a private copying levy. It’s a remuneration right that is paid back to owners of copyright who have neighbouring rights in sound recordings. This remuneration right is actually paid by the people who manufacture or import blank CDs. The money that flows back doesn’t go to the copyright owners per se; it’s going to those who own a neighbouring right.
When we have them working together or side by side, my concern is here’s what I think would happen: We have an exclusive right that lasts for 50 to 70 years from the date of the death of the author. It sits with the journalist or newspaper publisher. Then we have a remuneration right that only lasts for two years. What happens in two years plus one day? Is Google actually going to say, “We’ll pay you for the remaining 50 to 70 to 90 years of the copyright?” Of course not. Google — maybe — will pay a remuneration right for the first two years and then the rest is gone.
So I’m having trouble seeing how the two work together. I don’t think they do. My concern is that the remuneration right will actually take away from those full copyrights that the publishers and journalists already have.
[Translation]
Senator Cormier: My first question is for Mr. Roy and the second is for Mr. Sonier.
Mr. Roy, in your article entitled “Facebook s’enrichit grâce aux médias canadiens” in the magazine The Conversation, you said that almost one in six publications in francophone Canada was distributed on a news outlet, and the francophone media alone enabled Facebook to rake in $173 million over two and a half years.
In addition, you said just now that ultimately, in your opinion, the solution for correcting this imbalance may not be a change to copyright, but rather a tax.
My question, which is very simple, is this: what is there in Bill S-225 that would make it possible to correct this imbalance between Google and Facebook and the traditional media?
Is there something in this bill that would help to do this, or should we simply go with a tax?
Mr. Roy: It’s true, there is not much in the bill that could solve this problem. That is why I said, at the end of my presentation, that the solution, in my opinion, lies elsewhere, perhaps even in the Australian model that Mr. Guilbeault seems to prefer.
Otherwise, as Mr. Greenspon said, the tax on digital services might be a solution.
To answer the first part of your question, I have noticed that, in fact, by getting content, we are talking about several million publications and posts on Facebook distributed in Canada between 2018 and 2020. I have also noticed that the francophone media make greater use of Facebook than the anglophone media. This explains the imbalance between anglophones and francophones.
Senator Cormier: My second question is for Mr. Sonier.
I would like to know how your members’ articles are most often shared on the digital platforms, what proportion those articles account for, and how this is or isn’t a revenue source for freelances.
Mr. Sonier: On the proportion of articles shared, it is certainly not all articles. We might say approximately 25% of the articles are shared via Facebook.
Several years ago, Facebook was a way of easily reaching a lot of people. On a digital platform, approximately 60% to 65% of visitors came from Facebook. Today, that number has really fallen, and now we are looking more at 40%. So Facebook is being used a little less.
With the algorithms, it is a fact that some media did simply decide to use Facebook, but they also decided not to rely solely on it. They found other ways of staying in touch with their communities.
Can you repeat your second question, please?
Senator Cormier: In fact, what concerns me is how Bill S-225 helps or doesn’t help freelances.
You yourselves say that media organizations, in particular in francophone communities, increasingly hire freelances.
I would like to understand this situation better.
Mr. Sonier: At one time, newspapers had employees, full-time journalists, and this was how they would have been recognized as Canadian journalism organizations.
With the problems in the last 10 to 15 years, newspapers have turned to freelance journalists. When they do that, they no longer meet the criteria that allowed them to qualify as Canadian journalism organizations.
That’s one problem.
In addition, for the last two years, at the initiative of local newspapers — where content is shared on platforms — contracts have had to be signed with freelances, and that was an issue. Copyright could not be granted and taken back, as it were. Because freelances are not always well paid, they wanted to have the ability to sell their rights to a media outlet, but they wanted to be able to resell them after that, maybe a week or two later, to another outlet.
That is the reality we live in, and we can’t really tamper with this idea of copyright belonging to freelances.
As Ms. Finlay said earlier, we, as the media, have full copyright; that’s fine. However, it is more complicated for freelances, who want to keep the ability to sell usage rights to an outlet, but sometimes want to be able to sell them also to other outlets, because that is their source of income. It is a little more tricky.
Senator Cormier: Thank you very much.
[English]
Senator Dasko: Thank you to all the guests here today. I want to say hello to Ed Greenspon. It’s nice to see you. I have a question for you and then I have a question for everybody.
Mr. Greenspon, I would say that framing the issue as the media contributing to democracy doesn’t exactly solve the problem as to how we’re going to deal with the issue at hand, which is the economic problems and the business problems of the community. I most definitely agree that our free media does contribute to democracy but, as I say, I’m not sure how that helps us distribute the money. We have many voices in a democracy, and large and small media organizations with many different points of view. Could you elaborate on how that helps us come to a decision about public policy?
I’m now going to throw my second question out to everybody or anyone who would like to answer it.
Senator Carignan has invited us, as a committee, to propose amendments to his bill. He has urged us to propose amendments to the bill if we don’t think it’s adequate.
I want to ask all of our panellists today whether there are amendments to this bill that you think would work to, let’s say, fix it or to make it better suit the purposes.
Mr. Greenspon: Thank you. It’s lovely to see you as well, Senator Dasko.
The needs of democracy only create the necessity and justification for action, whereas it would not exist, I don’t think, in other industries. But the nature of democracy is such that it makes action very tricky. I think this is one of the toughest policy areas that one can imagine, because nobody wants government running, or overly influencing, the media of a country.
How do you inject money into the system? Because that’s the bottom line. Revenues have been falling for newspapers. Dailies and community newspapers in this country have fallen from about $4 billion 12 years ago to about $1 billion this year. That’s quite a hit. The news function is not that expensive. The news function is only about 20% or 25% of the cost of newspapers, and less so in certain other media.
To the tricky question, there are answers that people are finding in the world. Some of the answers are not great answers. There are benevolent billionaires. I used to work for a benevolent billionaire who owned The Globe and Mail and, truly, the family was not looking for a normal return on investment. There was a benevolent billionaire who owned La Presse who decided that it was worth giving it, and $50 million, away because he didn’t want that cost on him anymore.
I don’t think we have benevolent billionaires and, I’m sorry to say, of course, not all billionaires are benevolent either.
Second, there’s philanthropy. There’s been some measures to improve the access of philanthropy, but those measures have not been adequate so far, and there’s not enough philanthropic money in Canada that is interested in this problem. So you keep going down the different solutions. Frankly, you’re just coming back to the public purse. I don’t think there’s another way to find an answer — coming back to the public purse.
The point is: How can government have the lightest touch possible for the shortest duration of time in fixing this, which is, as Senator Carignan is looking for, making some fixes to systems and laws so that money can move from one pot into another pot? I think — and my colleague from Yukon obviously thinks so as well — that finding a system where you transfer through taxes or levy, like the cable system, is a cleaner way to do it.
If you’re looking to improve the bill, which you can do, I think the QCJO gives you a basis for who should get money in some ways and who should not. We’ve always been concerned that this money not go to the coverage of the Kardashians or it not go to sailing magazines and things like that. There is a way to create criteria of whether you invest in public good, civic-minded forms of journalism. That’s being done. That’s a judgment call that should not be made by government.
Mr. Roy: May I quickly answer Senator Dasko’s question?
Senator Dasko: Please.
[Translation]
Mr. Roy: We are asked how the bill can be improved. In my presentation, I talked about the definition of a journalism organization. Mr. Greenspon mentioned one way of improving it. I proposed another: to base it on a platform called the Journalism Trust Initiative (JTI) proposed by Reporters Without Borders. The quarterback for this project in Canada is Michel Cormier, who was formerly the Radio-Canada News bureau chief. It could become a standard, like an ISO standard, for certifying high quality journalism organizations.
[English]
Senator Dasko: Ms. Finlay, would you make any amendments to the bill?
Ms. Finlay: I would. Very quickly, there are lots of amendments that could be made to the Copyright Act, but if we’re talking about a remuneration right via collective licensing, there are some specific amendments that would certainly help to bolster collective licensing. We just finished appearances before the Supreme Court of Canada because there’s a live issue right now as to whether tariffs approved by the Copyright Board are actually enforceable — whether the users that are targeted by those tariffs have to pay them, essentially, or whether they’re just a starting point for negotiation.
I think if we’re moving down the remuneration right road, we would have to tighten that up in the act and make it clear that tariffs are enforceable.
I think the other thing that would be important to look at are some of the safe harbour provisions. Right now they’re intended to protect platforms and online intermediaries from claims of copyright infringement in certain cases, but they’re being used often by platforms for different purposes, namely to devalue the use of copyright-protected content when it’s used online.
I think those two things would certainly go a long way to making this type of bill more effective and useful.
Senator Dasko: Would those be amendments to this bill?
Ms. Finlay: They would be, yes.
Senator Dasko: Thank you.
[Translation]
Senator Carignan: Thank you for your testimony. I am perhaps a little surprised at certain elements of it. I am not sure that everyone has understood that the bill compelled negotiation between the digital platforms and the media associations to arrive at a tariff, and that if there is no agreement, a third party will establish a binding tariff. That tariff will be negotiated and people will be free to follow it or not.
So I am a bit uncomfortable asking questions, because I have a lot of them. However, I would like to get an explanation from Ms. Finlay. I don’t understand how the fact that a remuneration right might be established could jeopardize copyright. That is how France went about it and that forced Google, Facebook and the big players to sit down with the media and to pay. They paid a billion dollars because they were forced to do it and that is the model that is used here.
I don’t understand why creating a remuneration right would jeopardize copyright. You say that this right already exists; yes, it exists as copyright. However, there is no remuneration right because they will tell you they are engaged in fair dealing, so they make an exception to receive royalties. But this is creating a remuneration right. I am having trouble understanding your point of view.
[English]
Ms. Finlay: First, thank you, senator. As I understand the French regime, in France the newspaper publishers or journalists actually don’t have a full copyright. That’s why their legislation is not easily transposed to Canada. They are two very different legislative regimes and jurisdictions.
I certainly appreciate that this was the solution that France came up with. I can understand why it looks appealing to import it here. But there is a significant difference, that being that they don’t have the same exclusive copyrights that we have here.
Exceptions still apply to remuneration rights, so you’re still going to hear an argument from Google and Facebook and others that with hyperlinks — we’ve talked about that already — they’re only using an insubstantial part and that fair dealing applies. All of these things are going to be part of the discussion, either together in a voluntary negotiation or in front of a copyright board or some other independent arbiter about the value of what’s being licensed here.
So a remuneration right, yes, it’s an entitlement to be paid, but the question is always how much. I don’t see a scenario where each of the exceptions that apply under a full copyright would not equally apply or at least be argued to remuneration right. You still have to prove that the right is worth something. What is the value of that right?
That’s my view of how the two don’t necessarily jibe or work together very well. I would love it if it was a remuneration right that said you must be paid a fair and equitable rate and don’t take into account any of the exceptions and the Copyright Act; I think this would be a very different discussion, but that’s not typically how remuneration rights —
[Translation]
Senator Carignan: That is the objective of my bill. That is exactly what my bill says.
[English]
Ms. Finlay: I appreciate that. I thank you for that because I do recognize that’s the intent. Unfortunately, I don’t think that’s how it would work in practice.
So I discussed earlier about the 2 years versus the 50 to 70 years from the date of the death of the author; that is one situation precisely where I think that this could be used to actually diminish the rights of copyright owners.
I’m just having trouble reconciling the two together. There may be other ways to do this in the Copyright Act. Unfortunately, I just don’t think this is the right way to accomplish what I absolutely recognize you’re trying to accomplish. I support wholeheartedly that we do need to figure out a way to bring the platforms to the table to negotiate and to pay a fair and equitable rate for uses that are being made.
[Translation]
Senator Carignan: Yes, there are a number of members. Otherwise, I am going to end up arguing and that is not my objective.
[English]
Senator Woo: Thanks to all the witnesses. My question really tees off from a common theme that I’ve heard from all four of you, which is that this is not a copyright problem, it’s a bargaining problem. I’m trying to understand the relative bargaining power of the parties here.
On the side of the traditional media producers, it’s quite clear that as content providers they are no longer getting the advertising revenue that they used to get for the content that they produce. They are bleeding massive losses of the sort that Mr. Greenspon has related to us.
But I’m not as clear on the other side of the equation what the opportunity cost is for the platform companies if they were to not have access to content. If they did not post information from media providers, how big a hit would it be for them? Could they be penalized any significant way by, in some magical fashion, not permitting them to get access to this so-called free content?
Of course, we saw a brief example of this in Australia when there was a boycott. It was quickly reversed.
But can somebody help me understand the relative bargaining strength of the two sides, particularly the platforms and their use of free content? That’s for Mr. Roy and Mr. Greenspon, please.
[Translation]
Mr. Roy: There are two things; first, historically, there is an entire body of scientific literature that describes the relationship between Facebook and the news media and outlines that history. At the end of the first decade of the 21th century, that is, from 2005 to 2010 — and this has been documented — Facebook extended a hand to the news media and proposed that its users be able to share interesting content. They told the news media to create their pages and put information on the platform, and, in exchange, that would increase traffic. Initially, it was a win-win formula. However, as the second decade unfolded, Facebook’s advertising revenue rose, and even though traffic to news media sites rose, the advertising revenue they were able to derive from it fell. So the relationship was no longer equitable.
There is a second point that your other question made me think of, and that is when you refer to what Facebook did for a brief time in Australia. I asked myself: what if Facebook did the same thing in Canada? That is a research project I am working on right now. I have examined only news content in French in Canada, and, for comparison, I collected Facebook news content in France, Belgium and Switzerland. I collected only Facebook pages in French, and I eliminated all news content from those pages. There were millions of news pieces; I have not completed my analysis, but to sum it up, if we remove news from Facebook, it is really boring.
[English]
Mr. Greenspon: I’ll weigh in as well, Senator Woo. The relative bargaining power is like that between a giant and a dwarf. The giants are companies that are worth $500 billion or $800 billion, and collectively in Canada, their revenues are $6 billion, $7 billion or $8 billion. This stands against the entire newspaper industry, which is about $1 billion and the television industry is about $2.5 billion or $3 billion now. So they are much larger.
The question about need is a very interesting question. You’ll hear from Jason Kee of Google later, and he is in a much better position to describe Google’s needs than I am. Facebook doesn’t need news. News is an added value. User-generated content drives Facebook. I’d say that’s true of Google’s YouTube as well. Google News is very important, I would estimate, to Google Search.
But that would take us back to Australia in a sense. The question that remains unclear to me is this: Who blinked in Australia? I think it’s assumed that the platforms blinked, and I don’t think that’s necessarily a safe assumption. I think they got certain compromises from the government, and those compromises allowed them to have more of a negotiated settlement and less of a hammer. That’s the way it looks to me.
Those negotiated settlements then create the bargaining inequities I worry about. You bargain with Rupert Murdoch; you don’t bargain with the small startup. Professor Roy has raised a question of Facebook and the 14 news organizations that it has dealt with. I watched a webinar that one of these put on last night about free speech. It was sponsored by Facebook, and I would say it lacked editorial robustness in the conversation. This is a news organization I like, and I was distressed by that.
I think there’s an automatic corrupting type of element that occurs when too much news money comes from interested parties that are powerful. That’s what you have to deal with, and that’s why I think Professor Roy and I are suggesting that a better way to go would be to just address the problem head-on.
The Chair: Thank you.
I see that Senator Miville-Dechêne is here from her other committee. She may have a question. Go ahead, senator.
[Translation]
Senator Miville-Dechêne: I also want to come back to the question of the inequality between the parties. First, I want to say hello to Jean-Hugues Roy, my former colleague at Radio-Canada. We worked side by side, and now he is a learned professor.
My question relates precisely to this imbalance of power. We know that in Australia, Murdoch is the one that has negotiated and signed; I don’t know whether the small players have signed yet. However, when I read Senator Carignan’s bill, I immediately thought about that difference between the big players, which would always manage to come out ahead, because they are less powerful than they were, and the small regional newspapers like Le Droit, or freelance journalists. I don’t know how that kind of system of negotiations would be possible in that, if I understand correctly, each one negotiates on its own or for its small group and does not disclose anything about what it negotiated. Then the other small players try as best they can to find out what was negotiated and to get the same, but they don’t have the necessary clout to succeed.
How do you see that, Mr. Roy and Ms. Finlay, both of whom work in the field of copyright?
Mr. Roy: Thank you, senator. Yes, I think that is a problem with the Australian law. It favours the bigger ones at the expense of the smaller ones. In Canada, we would not want a bill to make it possible to go after money from the Web giants, only to have part of that money then go into the pockets of Québecor or Postmedia executives. Once again, my thinking on this point is not set in stone, but the more I think about it, the more a tax on digital services seems to me to be a process by which we would go after the money where it is. There would then be a redistribution mechanism that would be neutral and could benefit the largest number. It could even include freelance journalists’ projects and they could receive money through that kind of mechanism.
[English]
Senator Miville-Dechêne: I would like to hear from Ms. Finlay regarding how you negotiate. You have very small newspapers and very big ones and they’re all trying to get the maximum. When I read Senator Carignan’s bill, that’s when I wondered how it would work for the smaller players.
Ms. Finlay: It actually works very well in terms of copyright collective licensing, or licensing via collective societies. One of the other panellists mentioned the Society of Composers, Authors and Music Publishers of Canada, or SOCAN, earlier — wouldn’t it be great if we had a SOCAN for these journalists and news media publishers? We do have a SOCAN. They can collectively license today.
I do think that collective licensing helps to balance out the negotiating power of big and small rights holders. Generally, they go in, they negotiate as a collective and then, depending on usage, there are many different ways to structure it, but big and small get payments based on how often their works are used. That is essentially the basis of it.
I believe there is a balancing that happens through collective licensing under this bill, or under the existing act as it is already.
The Chair: Thank you.
Senator Forest-Niesing: After having heard all of the other questions and answers, and with all the concerns that have been raised in this industry, while the objective is laudable, what I’m hearing from you is that the bill will not achieve that laudable objective. Plain and simple: Are we better off without it or can it be fixed?
Ms. Finlay: There are better solutions and if we listen to the industry writ large, we’ve heard directly from Mr. Sonier and Professor Roy tonight that there are other solutions. The Australian model is one that many have been pushing for in terms of bringing the platforms to the table. I do think this bill might be premature. I thought that was an interesting way of looking at it. Do I think the bill can be fixed? It would take quite a few amendments to get this to the place it needs to be, in my view.
[Translation]
Mr. Roy: I would introduce another bill to keep up the pressure on the giants and I would drop this one.
[English]
Mr. Greenspon: Having known newspaper publishers particularly for a long time, their ability to act collectively is not that well developed, and you see this in a bunch of jurisdictions. Even in the last two weeks, we saw two very prominent members of the newspaper association decide to go into the — with Facebook. I think a solution probably needs to be a solution of something in the public interest here. And, by the way, the legacy news publishers are not the entire journalism business, but a solution needs to come from a more powerful force and a force with a greater public purpose, which would be government.
Senator Simons: This is a question for Mr. Greenspon. You spoke, I thought, quite importantly about the danger of being so much more dependent on big platforms as business partners, to come to them cap in hand, and make Canadian publishers that much more vulnerable to their pressures. But is there not an equal danger simply in a system that was a more transparent tax system that you have just made news organizations that much more dependent on those platforms whose algorithms curate what we see and decide what is news and what is not news? I worry that any kind of vassal-serf-lord relationship with the big platforms leaves us uniquely vulnerable.
Mr. Greenspon: Senator Simons, I want to clarify. I thought you were going to ask whether it is even more dangerous to be dependent on government. I thought that’s where you were going, but that’s not where you went.
Senator Simons: That too. As you know, because you and I have talked about this, it makes journalists itchy to get money from government and for the government to define who is a journalist and who is not, and who is worthy and who is not. That’s a separate argument.
The argument I’m really concerned about is the parasitic argument. If the only future for Canadian journalism is to come cap in hand to the big platforms to ask for handouts in one way or another, then haven’t we lost a unique kind of independent voice? It’s one thing to be owned by an American hedge fund; it’s another thing to be wholly dependent on Google or Apple or Facebook for your very existence.
Mr. Greenspon: I couldn’t agree more. The world in which we grew up in journalism was a world in which you had hundreds of sources of revenue, and so if people ask, when I was editor-in-chief of The Globe and Mail or when I was a local reporter in Lloydminster on the Saskatchewan-Alberta border: Did I come under pressure from an advertiser? Yes, I did. It was a very rare and infrequent occurrence, but did it ever happen? Yes. And because that advertiser was worth half of 1% of your revenues or something, it was pretty easy to say, “No,” and for your publisher to back you in saying that.
If it’s 10% of your revenue, or if it’s actually obscure how much of the revenue is coming from a single source that is a powerful player in society, that’s problematic. That is poor governance. We don’t even know then who owns the press. Who pays the piper? The thing that makes government a little bit better, but bad, is that in government you can impose mechanisms to keep it arm’s-length, to stay away, to have formulas, to have them be transparent, to have the press hounding the government constantly about this, and that keeps people a bit more honest. These are both bad solutions. I want to be clear about that. It’s which is less bad.
The Chair: I want to thank the witnesses for taking the time to meet with us and for your insights that you shared with us as we examine Bill S-225. Thank you very much.
We will now proceed to our second panel. In the next hour we will hear from Jason Kee, Government Affairs and Public Policy Counsel, Google Canada; and Mr. Mathew Ingram, Chief Digital Writer, Columbia Journalism Review.
Thank you to both of these gentlemen for speaking to us tonight. Mr. Kee, you may begin with your opening remarks.
Jason J. Kee, Government Affairs and Public Policy Counsel, Google Canada: Thank you, Mr. Chair and honourable senators, for the opportunity to appear before you today. Bill S-225 and this committee’s study of the bill is part of a significant debate on the future of news, and we appreciate the opportunity to contribute our views for your consideration of the bill as well as to the broader thinking around the challenges facing Canada’s news industry.
Unfortunately, much of the political discourse around online platforms and news is premised on the false assumption that, one, the financial challenges that some legacy news publishers are currently facing is the fault of a small group of global digital platforms; two, that these platforms benefit from news without contributing back to the news ecosystem; and three, that publishers receive no benefit from online platforms.
Simply put, none of these assumptions are accurate. Without a clear understanding of the news ecosystem and the value exchange that occurs between online platforms and news publishers, it will be impossible to develop a coherent policy response that properly addresses the underlying challenges.
Not long ago, news publishers were one of the few publicly available sources of information of not just news but also classifieds, lifestyle content, entertainment content and much more. In fact, it was this non-news content that was the primary revenue generator for publishers. In 2000, classifieds alone accounted for over a quarter of Canadian newspaper revenues. The emergence of the internet completely disrupted this and it lead to the development of competing sites and services that offered cheaper alternatives pulling audiences and revenue away from news publishers. For instance, over half of the decline in Canadian newspaper revenues between 2000 and 2018 came from the loss of classified business to emerging services like Craigslist and Kijiji.
The same period also saw the emergence of highly efficient and effective forms of online advertising, which offered advertisers a variety of targeting capabilities simply not available in print, allowed advertisers to reach much larger audiences domestically and internationally and significantly reduced advertising costs by employing highly efficient automated auction systems. Well, this development has allowed small businesses to access advertising services that were historically far too expensive for them and has been vastly beneficial to Canadian business and the economy as a whole. It has also made life much more difficult for news publishers trying to monetize using existing models.
So with the emergence of the internet generally, that challenged the underlying business model of the legacy news industry, but not any one company. While some assert that Google takes news content and profits from it, it’s simply not true. Our products are built to provide relevant and useful information for everyone, including quality news, but we don’t actually provide news content. We don’t provide articles. We simply display a headline, a short snippet to provide a preview and a link to the source.
Now, free linking to content is the foundation on which the World Wide Web was built and is generally actively encouraged by publishers as it drives extremely valuable traffic to their websites so they can then monetize. In 2019 alone, Google sent over 5 billion clicks to Canadian news sites for free, which Deloitte has estimated as being worth about half a billion dollars in value to Canadian publishers. Further, any publisher can always opt out of our search in news products if they choose to do so, but most don’t because that referral traffic is extremely valuable to them.
Further, Google itself does not earn any meaningful revenue from news. News represents a very tiny proportion of overall searches. In 2019, news-related queries accounted for just 1.5% of total queries in Canada. Further, the vast majority of these queries don’t display any advertising, as advertisers don’t typically like to bid on news-related queries and Google News doesn’t display ads at all. So the assertion that a company like Google earns a majority of its ad revenue from news content is simply false.
We agree that journalism is critically important and there is a need to support the Canadian news industry as it adapts to the new digital reality. Through the Google News Initiative, we collaborate directly with the news industry to reach new audiences and develop sustainable business models. For instance, during the COVID-19 pandemic, our Journalism Emergency Relief Fund directly supported some 150 newsrooms across Canada. Building on these commitments, we recently announced the Google News Showcase, a $1 billion global news partnership program. Showcase is designed to bring value to both publishers and readers by licensing and displaying news content beyond the headlines and snippets we currently show. Participating news publishers will increase revenue through direct payments from Google and will directly manage how and which stories appear in the service.
This program is focused on supporting public interest journalism. Of the more than 700 publications currently participating in Showcase, over 90% are local, regional or community papers. We are in active conversations with Canadian publishers of all sizes and look forward to announcing more partnerships soon.
We remain optimistic about the future of news in Canada. This country is a global leader when it comes to developing new and diverse business models for news. New digital-first publishers like Village Media, Canadaland, Narcity, The Logic, The Discourse, The Peak and The Narwhal, just to name a few, are leading the way in experimenting with new models and are demonstrating success. That is where we must focus on supporting innovative and sustainable solutions for publishers of all sizes, not simply the legacy industry.
Thank you again for the opportunity to contribute to your deliberations, and I look forward to your questions and continuing this conversation.
The Chair: Thank you, Mr. Kee. I now turn the floor over to Mr. Ingram.
Mathew Ingram, Chief Digital Writer, Columbia Journalism Review, as an individual: Good evening, honourable senators, and thank you for having me here to talk about Bill S-225. I don’t want to take up too much of your time, and I apologize if some of what I’m going to say has been mentioned already. I want to give you a brief overview of why I think this bill, although directed at a very real and pressing problem, is fundamentally misguided in the way that it proposes to solve that problem.
The preamble to this bill states several things that are true. Journalism is important in a free and democratic society, there are a number of excellent Canadian journalism organizations and digital platforms have disrupted the advertising industry. The preamble also says something that is not quite true, which is that these platforms supply their sites with the journalistic work generated by traditional media. I think it would be more accurate to say that media outlets themselves supply their potential readers with their journalistic work through these platforms. They post their content willingly and even enthusiastically.
Facebook and Twitter and other social networks don’t take content from journalistic organizations; they accept it when it is freely given. In return for this content, these platforms send readers to those journalistic entities and help them reach new ones, a service which arguably has significant value.
I think it’s also worth noting, as has been mentioned by others, that journalistic works rarely appear on any of these networks in their entirety. Instead, they appear as clickable links with a small excerpt, a kind of usage that seems to be exactly what fair use or fair dealing was designed to cover.
Another aspect of this bill that I think is problematic is that it would require the government or its agents to pick and choose which journalistic organizations would qualify for this kind of remuneration. This kind of effort typically favours existing journalistic entities, at least some of which have caused harm to their own businesses in ways that have very little to do with Google or Facebook.
I’d also like to point out that even if this bill were to be passed in its current form, it would not come close to helping stem the flow of red ink and audiences at most of the journalistic entities in Canada. I think it’s safe to say that even if we were spectacularly successful in producing remuneration for journalistic works, it would be a very small drop in a large ocean.
To sum up, I don’t think this legislation will do much, if anything, to solve the problem it proposes to solve. Along the way, it could cause a significant number of negative spin-off effects that might make things worse for the industry rather than better.
If the Senate wants to help media companies financially, the proper avenue for doing so is probably taxation on digital ad revenue, not a re-interpretation of copyright. Thank you for your time. I’d be happy to take any questions.
The Chair: Thank you, Mr. Ingram.
Senator Dawson: Mr. Kee, I liked your presentation, but as far as the bill is concerned, just targeting the bill, does it damage the relationship between the media and Google? Does it damage the relationship between your customers and journalist customers?
You talked about a lot of issues, but on the bill itself, I think part of the bill is there to put pressure on people to go to the table. That’s what happened in other models, such as Australia. I think we need that bill, and I think we should continue debating it. I certainly heard tonight, at least, that it has a lot of flaws, and even the presenter himself is asking us for amendments. At this stage in June, which we call the “silly season” in parliamentary terms, I think we have to be careful of how we deal with it.
In your presentation, you did not deal with the bill. I apologize for inviting you very late; I’m apologizing because we didn’t give you much time to prepare. Just as the bill itself is concerned, how would you address it?
And Mr. Ingram, I guess it’s a question of fair use. I would like you to come back on how you would define fair use, as far as this bill is concerned.
Mr. Kee: Certainly, I think my comments would be consistent with Senator Simons’ very eloquent critique of the bill, and that was effectively reinforced by Ms. Finlay and others, which is to say, while I understand the intent — it was definitely intended to try and replicate the model that had been followed in Europe — Canadian copyright is a fundamentally different beast than the European copyright system. I don’t think it necessarily achieves the objective it is intended to.
Again, as I articulated in my opening statement, we provide links and headlines and snippets. They are not covered by copyright; they are not a replication of a substantial part, or they are covered by fair dealing. That doesn’t change with this bill, so I don’t actually think it achieves that particular objective. I think it adds complications.
In fact, two other points I would add over and above critiques is, one, I think that establishing a new collective society that is empowered to administer a new remuneration right is a very complicated endeavour that takes many years to sort through. On average, it takes 6.5 years for copyright tariffs to work their way through the system, so I don’t think it will result in meaningful revenue for news organizations.
Second, if you’re looking to expand the ambit of copyright to include, for example, hyperlinks, I do also think you’ll run into some Charter challenges and issues because you’re actually running into expressive problems.
Senator Dawson: Thank you. Mr. Ingram, on fair use?
Mr. Ingram: Yes. I just want to say I’m not a lawyer. My only understanding of fair use and fair dealing comes from writing stories about it. It’s my understanding that a link and a couple of sentences would fit the classification of fair use or fair dealing. I could be wrong, but I think you could argue that Google News, in particular, provides a public service. It doesn’t detract from the commercial value of the entire news article, in my view.
Senator Dawson: Again, I want to thank you for your participation, and I apologize for inviting you at the last minute. It’s an ongoing debate that obviously will not be solved tonight. Thank you.
[Translation]
Senator Carignan: My question is for the representative of Google Canada. You said a few words about Google News and Google News Showcase. Can you tell us about the money you have distributed in the form of revenue to media companies that have registered with your Publisher Center?
I note that a media outlet can sign up to use the advertising you generate or to distribute its own advertising. I am curious to know the amounts you have distributed to date through the Google News application in Canada.
[English]
Mr. Kee: If you’re speaking about Google News Showcase, which is a new licensing program I referred to in my opening remarks, we haven’t actually launched that product in Canada yet. We’ve signed a number of initial deals with several publishers. Our launch partners are Village Media and Narcity, and we’re in the process of negotiating with other basic publishers.
If you’re talking about other aspects of the business, which is less about Google News — which is not monetized at all — we do provide a number of services in partnership with news publishers to help them monetize their content. I don’t have the numbers available to me with respect to the amount we attributed, but in short, if any news publisher utilizes Google’s ad technology to help monetize their content, they get the vast majority of the revenue — anywhere between 70% to 95%, if not more — off that content, but I don’t have the figures at my fingertips.
[Translation]
Senator Carignan: Google News operates in Canada. I have the application and I see the names of the Journal de Montréal, the Journal de Québec, and La Presse. Can you undertake to tell us the amounts that have been distributed to the various media via the Google News application?
[English]
Mr. Kee: To the Google News application, I think you’re referring to the one that’s available in Canada right now, and essentially all that does — it’s not monetized at all. It just provides links to existing news publications. There isn’t a revenue exchange that occurs there. Long story short, publishers have the power to be included or not included in that application as they see fit. It provides a link and a snippet, and then it drives traffic to that site. So there isn’t an exchange of revenue that occurs because we’re driving traffic to them that they can then, in turn, monetize. We don’t have details about how they monetize that traffic.
[Translation]
Senator Carignan: So your application is free. What is the value of your application to Google?
[English]
Mr. Kee: It’s several. Number one, it’s a specific news-oriented application that is intended to drive traffic to our news publisher partners, whom we actually do engage with and we want to see succeed. We want to drive them valuable referral traffic that they can monetize to be basically sustainable in the long run.
It’s also of use to our users because of what we learned. The Google News application came out because post-9/11, Google search was not optimized to actually handle news-related queries. So we created an application through Google News that specifically focused on news stories. It’s organized around news stories where you can actually select a story and get different publishers that are actually publishing stories related to that particular topic in a way that’s more useful if you’re looking for news-related items than if you’re going through Google Search generally.
It’s really intended as a benefit to our news publisher partners as well as a benefit to our users. As I said, it’s not specifically monetized; we earn no advertising revenue off of it at all.
Senator Simons: Mr. Kee, I note that it wasn’t that long ago that Google made a deal with a group of French publishers, a syndicate of French news organizations for a kind of — I don’t want to call it profit sharing — financial arrangement. I also noted with interest that those news publishers belonged to a consortium where they were validated and approved by an organization as legitimate news organizations.
This was a subject that came up in our previous questions, where some of our witnesses talked about the need to establish what an official Canadian journalist is. As somebody who spent 30 years as a Canadian journalist, that makes me twitch.
I wanted to ask this of each of you. For Mr. Kee, first of all, if you could explain the French deal and the model. Then, for Mr. Ingram, what concerns might you have about the idea of a government body deciding who is or isn’t a legitimate journalist and worthy of financial support.
Mr. Kee: Certainly. This actually goes to the copyright approach. In Europe, they introduced, through the European Copyright Directive, this new article 13, that was basically going to require Google to engage in the negotiation and provision of royalties for the use of certain types of news content. It’s very important to note that, even in the European model, it excluded hyperlinks and what we would call short extracts — snippets — but there is an ongoing debate as to what exactly a short snippet is, because it was not defined in the legislation.
France was the first country to transpose that directive into national law, and that then generated an ongoing conversation that we’ve had with a number of collective societies within France around what the scope of that would look like. We have come to settlements primarily with the APIG, which is the primary press publisher in France, mostly so they would recognize that the Google News Showcase — which we are currently negotiating in Canada — would also be acceptable as an equivalent resolution to this issue in France. There are a few questions that have arisen around that of late with respect to other societies, so we’re currently working through those processes. It’s basically working through collectives, because French law requires it in a way that Canadian law does not. That’s the main difference.
As I highlighted, and as others have also highlighted, the Canadian copyright system is not as amenable to this approach as a matter of royalties as the European civilian system is. Generally speaking, we tend to favour alternative approaches. It’s why we’ve come to the table with showcase negotiations without any legislative hammer being held over our head; we actually want to secure these arrangements and deals without necessarily having to pursue a regulatory solution. I’ll leave it to Mr. Ingram, who can speak to how journalists might respond to this.
Mr. Ingram: Thank you, Senator Simons. I share your concerns about any system that purports to define a quality journalistic organization, a quality journalist or to choose, effectively, what qualifies as journalism and what doesn’t. I don’t think that’s a great road to go down. In one case you would wind up choosing all the things that we have all heard of — all the entities that we know of — the large ones, the established ones and, to be honest, I’m not convinced that’s where the future of journalism lies. I might pick a completely different list of organizations, but if I wasn’t the one choosing, then they would be left out. Whenever you draw that circle too tightly and leave organizations out, you run the risk of missing something important.
The Chair: Thank you, Mr. Ingram.
Senator Dasko: My question is for Mr. Kee. Thank you both for being here. It’s very important for us to crack this.
Do I take from your comments, Mr. Kee, that there is no problem here? Is there no problem with the state of journalism? Or, if there is a problem, do I take it that you see yourself as part of the solution? Do you see a problem here? And how would you describe your role in it now?
Mr. Kee: I think there’s clearly an issue. I agree entirely with Mr. Ingram’s opening comments. There’s clearly a significant issue and a challenge that journalism globally, and certainly in Canada, is facing, in part because of disruptions that have occurred with legacy news media.
The question is: How do we address the issue? What is the policy prescription that we are actually engaged in to examine this? I think it is not controversial for anyone to assert that journalism is critical to democracy. It’s extremely important that we actually have sustainable, high-quality journalism and authoritative news information available to Canadian citizens for the functioning of our democratic society. I don’t think that is a controversial statement at all. We would be entirely in agreement with that.
The question is: How do we address this? I think Bill S-225 is one approach, which I view as well intended but not necessarily the best approach. Not surprisingly, we tend to focus more on our market-based solutions, which are focused on innovation, in part because the challenge that a lot of news publishers are facing is that their business models have been deeply disrupted by the internet generally. The question is then: How do we find solutions that allow news organizations to be sustainable in the long run?
You have legacy news organizations that have legacy cost structures that are based on a print model that are going to be very challenged. You also have the emergence of digital-first publications, like The Logic and Village Media, which I cited, who are very much at the forefront of developing sustainable business models where they will self-sustain.
The other critical piece — and this goes to the end conversation you had with Mr. Greenspon and others — is: What is the model that we’re looking at to ensure that news organizations are not developing dependencies on any individual actor, be it a platform or government or others? I think that is critically important, even if just for the optics and even if it’s just for the sake of the perception of independence that news organizations must have in order to be credible. I worry about approaches that are designed to either engage in some form of wealth transfer or direct funding of news, because I do think you are going to run into these problems. Whether it is platforms or government, I think it runs into the same issue.
We need to be focused on developing solutions that are focused on innovative business models that are self-sustaining in the long run, where you could look at this as a seed-money investment, but you can then step back and the organization is capable of sustaining itself versus the necessity of having constant subsidies injected in, whether it’s from platforms or whether it’s from government.
Senator Dasko: What do you think about the taxation solutions that Mr. Ingram has suggested? Is that part of the mix of the solution — the taxation models and ideas that he expressed and that Mr. Greenspon and others mentioned earlier? Is that part of the mix of solutions or not?
Mr. Kee: I think it’s something that definitely needs to be robustly discussed. As has been observed through the course of this discussion, there is the digital services tax, which the government has announced it will be moving forward with, and then also transferring to the OECD, which is engaging in a robust conversation about changing the international rules around taxation, which I will not bore you all with. But I think that’s part of the solution: How are we getting general revenues that are going to the government, and then how is the government applying those revenues? Whether or not there’s a new taxation system that applies to digital platforms or not is a secondary concern. The question is really how we’re going to apply the government revenues.
Currently, we have two main programs that were introduced a few years ago, which are the Local Journalism Initiative and the journalism labour tax credit. Again, I think those are well intended. They were not uncontroversial, but I do think they were focused on funding journalism versus funding innovative business models that helped news organizations become self-sustaining in the long run. I do think those are two very different considerations.
Senator Dasko: Thank you.
Senator Miville-Dechêne: I would like to hear from both of you. You presented yourself, Mr. Kee, as part of the solution and as knowing what to offer journalists so that they can be happy. At the same time, we have Facebook, which is doing this deal with a few newspapers in Quebec; generally the medium- and small-sized ones. Is that the future — individual agreements? Maybe we can hear from Mr. Ingram on that. Is that the future, having Google say, “Hey, we’ll do a fund. We’ll do this?” Do you see that? Obviously, I’m a legislator, so I’m wondering if this will be the way it will go — individual agreements and secrets between platforms and groups of media and newspapers.
Mr. Kee: It depends. Speaking for ourselves — I can’t speak for Facebook, of course — right now, we have the negotiations that we’re doing for Google News Showcase, the programs that we are funding through the Google News Initiative and we have a number of innovation challenges and innovation funds. Two are ongoing right now in Canada. They are really designed to clarify how we work with partners to help them be sustainable in the long run. This is, in many respects, us coming to the table without government pressure, in part because we believe in the mission. We’re actually aligned—
Senator Miville-Dechêne: Isn’t it because you don’t want a bill?
Mr. Kee: Not really. The fact of the matter is we’re coming to the table with this anyway because it is in our interest to ensure there is a sustainable news ecosystem in the long run. We are looking to help organizations be sustainable.
I do think that there is a robust conversation that does need to be had, which is — if I were going to be put on the spot — to ask what government can do? Well, the first thing they could do is actually start convening all the parties to come together to work on solutions. Because, right now, we have various campaigns that are basically being run by different parties around what this might look like, and they are actually not being productive.
I do think we’re going to have to come together and figure out what this actually looks like and if legislation or regulation is necessary in order to effect that. One thing I will say — and I don’t want to take from Mr. Ingram’s opportunity — Google News Showcase is a program that is designed to work with publishers where they provide content to us which we display in our services. It is more than just links and snippets, but we do require publishers to have a certain capability of providing that class of content on a certain frequency. Some small local publishers may not have that capacity.
Showcase is not built for everybody. It’s built for larger players. So then the question is: How do we deal with smaller players? We are already having robust conversations.
Press Forward is a newly formed, digital-first association of very small publishers. We are having conversations with them about what this actually looks like. Does this look like a fund? If it’s a fund, is it voluntary, or is it overseen by government? What are the pros and cons of those approaches?
I note that Mr. Greenspon articulated a CMF-style approach. I can understand the appeal of that, but I will also say that the revenues that Google earns from news are not that significant. It will not net the contributions that I think the industry expects.
In that case, are we better off seeking a collective negotiation around these? Let me step back. I’m sure Mr. Ingram has some thoughts.
Mr. Ingram: Senator, I certainly wouldn’t say no, if I were a media company, to payments from anyone if they wanted to give me money. I don’t think money from Google and Facebook is going to make the difference for many media entities. I don’t think it’s going to save them. I don’t think it’s going to produce a sort of sustainable future. To be honest, I don’t think it’s good to rely too much on those types of payments.
I’m much more interested in changes that have allowed foundations or wealthy individuals to donate money or provide sustaining funding, something that’s quite common in the U.S. for some pretty significant journalism outlets. I’m more interested in the power of subscriptions in communities to fund their own news entities, as opposed to relying on a cheque here or there from a large company that may never even have heard of the town where you are trying to produce journalism.
Senator Miville-Dechêne: Thank you both.
Senator Woo: I have a technical question for Mr. Kee. You mentioned, I think it was, 1.5% of all the searches are done through the news feature on Google Search. Is that what you meant?
Mr. Kee: No. That was actually for Google Search generally. So 1.5% of all searches in 2019 on Google Search in Canada were ones that we were able to identify as being news-related. It’s a fairly small percentage of overall queries.
Just to step back, when you think about your own use case for Google searches, the vast majority of Google searches are fact-based queries, like, “What is this dollar amount when changed from U.S. dollars to Canadian?” It is, “How do I actually measure this,” versus looking for news-related information. It’s a fairly small percentage that are news-related queries. Certainly, most news-related queries, as I said, are not actually monetized; they don’t earn revenue.
Senator Woo: Yes, I understood that. It’s not about using the news button on the Google Search page, even though I would quibble about whether you can actually distinguish between my search being a news query or a more generic, fact-based query. If I want to find a news item, I would just put some keywords. That might come across as a kind of fact-based question. We’ll set that aside.
I’m interested in Showcase. You say it may be coming to Canada, but it’s not here yet. You’re working with a number of specially chosen companies to produce, if I can use the term, value-added services, beyond the links and beyond the short snippets. Are you becoming an aggregator?
Mr. Kee: I wouldn’t say any more than we may or may not already be. Some would qualify Google News as an aggregation service already. Again, we just provide links and headlines and snippets and drive traffic, but it is organized around stories. So it functions as an aggregator in that sense.
Senator Woo: So aggregator, plus, plus?
Mr. Kee: This is the difference between what we currently do through Google News versus what Showcase is. Showcase is about expanding to Google News to actually include not just snippets but also fulsome content that is provided to us by the publisher in a bespoke kind of way.
Senator Woo: I totally get that. Should companies that are not part of Google Showcase be worried that they will be a second or third tier of providers who don’t get the traffic that you will naturally want to favour?
Mr. Kee: It won’t affect traffic. It only affects the availability of content that’s within the Google News and Google Discover services. That’s certainly an ongoing conversation that we’re facing in a number of jurisdictions where we have actually launched the product.
Certainly, there are concerns that have been raised around this. As I said, we are very much focused on public interest journalism. We are focused on a wide range of diverse publications that are available to participate in the program, which includes, again, French and English, local, regional and national, across the board. It’s really about their capacity to actually participate in the program, to provide us the level of content at the frequency that we would need it, versus anything else, which is why we’ve been having those ongoing conversations.
I don’t expect it would actually have a significant impact necessarily on the traffic they receive, but again we’ll see how that plays out.
Senator Woo: I may have sounded sceptical. Maybe I am a little bit, but there is a potential upside here in the sense that if you were to have different kinds of showcases that were very expansive and would broaden their coverage of different types of news — essentially, if you add more value to what the providers give you in raw form, maybe it could be helpful to the industry as a whole. But if it’s only limited to a top tier of providers that you’ve anointed, that’s going to be limiting in competition. Anyway, that’s a comment rather than a question. Maybe you want to respond and then back to the chair.
Mr. Kee: Number one, I would say that’s a perfectly fair concern, which is why we’re very focused on small, local publishers. The overwhelming majority are small, local and community publishers, not the large national guys.
Senator Woo: Thank you.
[Translation]
Senator Cormier: I am going to try to summarize what I have understood from what we have heard this evening — and perhaps stray from Bill S-225. When we talk about the media, about the issues, we are talking about access to revenue, the sustainability of the media, the independence of the journalism industry. When we talk about revenue, we are thinking about the big companies, the government, subscriptions, advertising. We don’t want the media to depend on governments or the big platforms. But media organizations are not all starting off from the same point. There are big companies and small media organizations. The solutions are complex. In these circumstances, what is the role of a bill like Bill S-225? Is the solution actually a tax? Who can answer that question? I am asking Mr. Kee and Mr. Ingram. What role can each of you play in this rather complex system where the solution is not limited to one element?
[English]
Mr. Kee: Number one, in terms of not being one solution, you’re exactly right. This is not an easily solvable problem. There is no silver bullet or one solution that will resolve this. Even with the emergence of some of the new business models we’ve seen with the digital-first publishers, there isn’t a consistent approach. There is a vast diversity.
One the key things that government should do — again, initiatives like this are worthwhile in terms of actually driving it forward — is actually bring the parties to the table, not to negotiate deals but to listen. We need to start having robust conversations about how we move forward collectively, because that’s how we build a sustainable news ecosystem that works for everyone in the long run. It isn’t anyone’s fault that we got to where we are. It just is. However, everyone agrees that journalism is a public good, so how do we actually resolve that problem? I don’t have an easy solution, because there isn’t one.
I do think we have to have a flexible approach that adapts to the realities each individual news publisher will face. I think Bill S-225 is well intentioned, but I just think that’s a particular approach that isn’t necessarily going to work in the way it is intended. However, I do think it is good as a triggering event for bringing parties together, where we can actually have collective discussions about what the way forward is and how to actually build a sustainable ecosystem together.
The Chair: Mr. Ingram, last word to you, sir.
Mr. Ingram: I feel a lot of pressure.
Senator Cormier: Don’t.
Mr. Ingram: I would definitely agree that we have to try everything — almost everything. We need all the tools we can find. We need tools that haven’t even been invented yet. I’m not convinced that Bill S-225 is going to be one of those tools. It may be a broken hammer, if you will. I’m trying to think of a good analogy. However, we definitely need as many different kinds of solutions as we can find.
The Chair: Thank you.
Senator Cormier: Thank you.
The Chair: Thank you to everybody. This brings us to the end of the meeting. I’d like to thank Mr. Kee and Mr. Ingram for their testimony and to all the witnesses today for taking the time to meet with us. Your contributions are extremely helpful in our consideration of this bill.
The next meeting of this committee will take place Wednesday, June 16, at our usual time of 6:30 p.m. EST. With that, I wish everybody a good evening. Thank you for participating.
(The committee adjourned.)