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TRCM - Standing Committee

Transport and Communications




OTTAWA, Tuesday, May 30, 2023

The Standing Senate Committee on Transport and Communications met with videoconference this day at 9 a.m. [ET] to examine Bill C-18, An Act respecting online communications platforms that make news content available to persons in Canada.

Senator Leo Housakos (Chair) in the chair.


The Chair: I am Leo Housakos, a senator from Quebec and the chair of the Standing Senate Committee on Transport and Communications.


I would like to invite my colleagues to introduce themselves.

Senator Simons: Senator Paula Simons, Alberta, from Treaty 6 territory.


Senator Miville-Dechêne: Julie Miville-Dechêne from Quebec.

Senator Cormier: René Cormier from New Brunswick.


Senator Manning: Fabian Manning, Newfoundland and Labrador.


Senator Clement: Bernadette Clement from Ontario.


Senator Harder: Peter Harder, Ontario.

Senator Quinn: Jim Quinn, New Brunswick.

Senator Cardozo: Andrew Cardozo, Ontario.

Senator Dasko: Donna Dasko, senator from Ontario.

Senator Wallin: Pamela Wallin, province of Saskatchewan.

The Chair: We are meeting to continue our examination of Bill C-18, An Act respecting online communications platforms that make news content available to persons in Canada. For our first panel, from News Media Canada, we have Paul Deegan, President and Chief Executive Officer; and Pierre-Elliott Levasseur, President of LaPresse and Director of News Media Canada. With us by video conference is Brian Myles, Director, Le Devoir. From The Globe and Mail, we have Phillip Crawley, Chief Executive Officer and Publisher. Thank you for being with us this morning.

Mr. Deegan will have the floor first, followed by Mr. Myles and Mr. Crawley. Mr. Deegan, you have the floor.


Paul Deegan, President and Chief Executive Officer, News Media Canada: It’s a pleasure to be here with you. I’d like to share some thoughts before listening to your comments.


At its core, Bill C-18 permits publishers that produce original news content of public interest to come together to negotiate with big tech platforms. If negotiations do not lead to a successful settlement, it goes to baseball-style final-offer arbitration.

It builds upon the Australian News Media and Digital Platforms Mandatory Bargaining Code, which has seen more than $200 million Australian flow to publications and outlets in that country, both large and small. The hiring environment for journalists in Australia has improved since the bargaining code came into effect.

We applaud the members of the House of Commons Standing Committee on Canadian Heritage, who worked together on a nonpartisan basis to amend the bill and make it better. Specifically, they permitted small publications — mom-and-pop independent publication, where the family members run the newspaper — to count toward the two-employee minimum. On that, I salute Kevin Waugh from Saskatchewan who pushed hard for that amendment and worked with us.

Currently, we have a David-and-Goliath relationship with the big tech platforms. We have a power imbalance with them, but we also have one among publishers. With the prospect of legislation or regulation, dominant platforms started offering content licensing agreements to many of our larger members. Effectively, the platforms are picking winners and losers, and have dictated the terms. From our perspective, that’s not right and that’s not fair.

Now, don’t get me wrong: We’re happy for our members that have been able to secure licensing agreements. But our aim is to make sure that smaller publishers like Sarah Holmes of the Gabriola Sounder, Sophie Gaulin of La Liberté, Dave Adsett of the Wellington Advertiser, Benoit Chartier of Le Courrier de Saint-Hyacinthe, and Paul MacNeill from Island Press get a fair deal. Pierre-Elliott Levasseur from La Presse, sitting next to me, doesn’t have one either. All of these publishers should get the same type of deal that the Toronto Star has been able to secure.

So, too, should ethnic news publishers and digital publishers that are doing some incredible journalism and expanding audience.

Bill C-18 isn’t a silver bullet, and anyone who suggests that is kidding themselves. We need to ensure we have a news ecosystem where independent, fact-based public-service journalism in this country can thrive.

No piece of legislation is ever perfect. We want to offer some further amendments that we believe will make a good bill better.

The role of the CRTC should be further clarified to preserve newsroom independence. Phillip Crawley from The Globe and Mail will speak to that. To avoid ragging of the puck, the timeline for negotiation and mediation should be tightened to 45 days each, and the bill should come into force quickly.

After your study of Bill C-18, I hope you will invite us back to discuss other issues affecting the news business. Let me outline three of them.

The first is federal advertising. Last year, the feds spent $140 million on advertising. Of that, just $6 million went to printed newspapers. About double that amount went to Facebook and Instagram alone. It’s time to support Canadians; it’s time to support the home teams.

Second, the CBC should be free of commercial advertising. Right now, we’re competing with them for scarce ad dollars on news and current affairs properties, and that isn’t right.

Finally, regarding antitrust, the U.S. Department of Justice has filed an antitrust suit against Google related to ad tech. It’s time for parliamentarians to amend the Competition Act to give the Competition Bureau Canada the tools they need to do their job. We need a Competition Bureau that has more bite than bark.

To get back to Bill C-18, the unfair, inequitable and arbitrary imbalance we have currently, where platforms favour some publishers and not others, demands the swift passage of this bill before Parliament breaks for the summer.


Real journalism costs real money. Bill C-18 will help, but more can be done, and I hope that we can talk about that. On that note, I’m eager to have a meaningful discussion.

Brian Myles, Director, Le Devoir: Good day, distinguished members of the committee. Thank you for having me today. Le Devoir is a daily newspaper that’s part of a group of media that rely on subscriptions, including digital and home delivery. Subscriptions represent nearly two-thirds of our revenue; that’s extremely important.

Thanks to prudent management, an optimal use of Quebec and Canadian tax credits and a strategy to ensure revenue diversification, we have been profitable for seven of the past nine years. Within six years, Le Devoir went from about 100 employees to 184 employees.

In spite of all that, the challenges associated with the digital transformation are never-ending. We operate in a challenging environment, marked by the presence of players focusing on free content. We have to go up against digital commerce giants when it comes to advertising. Le Devoir doesn’t have the means to cover the losses and has no patrons to support it.

That’s why we fully support Bill C-18. However, we’re aware that, although the government is expressing its intent to provide a framework for the platforms, we signed agreements as early as 2014, with MSN in 2014, with Apple News+ in 2020, and with Meta and Google in 2021.

It goes without saying, however, that we’ll comply with the new legislative regime.

In our opinion, these agreements are important. They’ve allowed us to rebuild a relationship with the platforms based on trust, a renewed trust and mutual dependency.

With regard to Bill C-18, it’s very important to us that publishers have the choice to negotiate individually or collectively with the platforms. With all due respect to our partners and our associations, we at Le Devoir believe that our interests are best served through direct negotiation, since we have already created a relationship of trust.

The media industry is still struggling to understand the impact of digital platforms. Sometimes publishers or academics tells us that Google or Meta stole our advertising revenue or content.

It’s important to note that the media willingly allow their content to be shared on Google, Meta, Instagram, Twitter and other platforms. We need the strength of those platforms to spread our content and reach users wherever they may be. The committee members may not know this, but these days, it’s rare for users to use just one application or internet site and read all the sections. The roads leading to our content are facilitated by keyword searches, usually on Google, and by sharing on social media.

In that context, Google and Meta’s barely veiled threats to “turn off the taps” of news content should Bill C-18 pass, would have a dramatic impact on the visibility of our content.

We find ourselves in a complex relationship, a complementary and interdependent relationship that also needs to be considered during the debate on Bill C-18.

Nevertheless — and News Media Canada emphasized this point — there’s an imbalance between news media and the platforms. The David and Goliath analogy is no exaggeration. We need Bill C-18 because of the imbalance that I mentioned previously, on the one hand, and the concentration of online advertising revenue in the hands of a duopoly on the other. However, the bill could be enhanced. As a news publisher, that’s one of things I find frustrating, because the imbalance isn’t limited to advertising.

There’s also an imbalance when it comes to subscriptions. The software platforms decided unilaterally what percentage of revenue they would retain for subscription transactions completed within their perimeter. We have no choice but to give 15% or 30% to the platform completing the subscription through an intermediary partner. Those subscription platforms should also be included in Bill C-18.

Le Devoir is a daily with a historical association to the French fact. It’s concerned about linguistic duality. The francophone media, both inside and outside Quebec, are in a unique situation, meaning in a North American English-speaking environment. Cultural and linguistic barriers shift the balance of power between us and the digital platforms, making it even more difficult and fragile. Bill C-18 should include a mechanism for oversight and accountability to the CRTC, so that linguistic duality requirements are respected during future negotiations. It is a matter of diversity within our news ecosystem.

To achieve that, the CRTC should develop expertise and very detailed knowledge of francophone markets and culture. That will be instrumental.

We’re also concerned about equity during future negotiations. It’s essential to ensure that large publishing companies don’t get an exorbitant share of future royalties, as was the case in the first part of the Australian model. The inclusion of Radio-Canada in Bill C-18 raises questions, but that seems to be the choice made by the legislator. Radio-Canada could potentially be the biggest beneficiary of Bill C-18,

If there are no limitations or concerns, there might be an imbalance in terms of human and financial resources available within the news media.

The Chair: Mr. Myles, you have already exceeded your five minutes. Could you wrap up?

Mr. Myles: In conclusion, I suggest capping maximum allowable salaries. The best way that Bill C-18 can help us is to base bargaining on newsroom payroll costs. That’s what many companies throughout the world are doing.

The time to act is now. We can’t wait two years between the passage of the bill and the CRTC regulations, because the delay will benefit opponents, giving them time to organize and undermine the spirit and the letter of the law. We hope, then, that regulations associated with the bill will be rapidly implemented. Thank you.

The Chair: Thank you very much.


The Chair: Now, from The Globe and Mail, we have Phillip Crawley, Chief Executive Officer and Publisher.

Phillip Crawley, Chief Executive Officer and Publisher, The Globe and Mail: Thank you. I want to follow on from what Paul Deegan said in terms of support for the amendments that Mr. Deegan has tabled through News Media Canada. They represent the views that The Globe and Mail has been articulating to Canadian Heritage since last year, specifically our concerns about the language in the bill on the powers of the CRTC.

The Globe and Mail is a member of News Media Canada, but it has a different business model to many of the other companies. Digital delivery has transformed the revenue mix and expanded our national audience. When I started at The Globe and Mail in 1998, print advertising was the principal source of revenue, about 70% of the total in those days, with the rest coming from circulation, subscriptions and single-copy sales. Now two thirds of our revenue comes from readers and users paying for content, and advertising is only 30%. The business model is flipped on its head. We have about 330,000 subscribers, most of them digital, which is the largest of any Canadian publication. We have also invested in our own homegrown software to create technology that helps to convert casual users to subscribers. We have a subsidiary business called Sophi which has smart paywall technology that we now sell to other media companies around the world.

All of that depends on the most important investment of all, and that is the quality of the content. People won’t pay if the content is weak or generic. We create exclusive content that only subscribers can read, and that costs a lot of money each year to make sure we have the talent and the resources to deliver that growth.

Some of our investigations can take more than a year to complete, but they are often game changers in terms of driving change. That’s why we win more awards for our journalism than anyone else in Canada each year. For example, we are nominated for two different investigations at next month’s Michener Awards here in Ottawa, which are for journalism that produces positive change for society in Canada.

That’s why our owners still have The Globe and Mail among their collection of business holdings. They sold all their other newspapers around the world more than 20 years ago. So why hang on to The Globe and Mail? Our chairman, David Thomson, and our board members believe that The Globe and Mail brand can be used to make a difference in Canada through independent journalism — and I’ll come back to the word independent. They also support us by maintaining a network of foreign bureaus around the world so that The Globe and Mail can provide a perspective through Canadian eyes on what’s going on around the world rather than relying on foreign agencies.

The quality of our journalism attracts other companies to access our content and pay for it through licensing agreements. That’s been happening for a long time, but it has helped to boost our revenue, even during the COVID years, through the arrival on the scene of global giants like Apple and Google. Our business and finance content are a particular reason why they have multi-year agreements with us. It works for our subscribers and theirs too; it’s a good relationship.

Let me return to the importance of independent journalism and the trust that builds with readers and partners. It’s a core principle of The Globe and Mail, and continues a tradition of respecting editorial freedom going back to Roy Thomson, dating back to the 1930s. It’s why I’m asking the Senate today to take a close look at the amendments to the language of Bill C-18 as discussed with Heritage and as presented today by Mr. Deegan’s submissions from NMC.

Allowing the CRTC to go fishing for confidential information from news organizations, particularly information related to editorial departments, would be an overreach that is best avoided. Minister Rodriguez and his staff have assured us that there is no intention to use the provisions of C-18 that way, and we welcome that, but to remove all doubt, I urge you to adopt the specific language that is being proposed. The Globe and Mail has tabled specific language to tighten up the language of the bill.

There are three amendments in particular that I’d like to highlight. One, remove the right of CRTC to unilaterally designate a news organization as subject to the act in clause 27(2). The intention of the legislation was not to regulate news organizations, so participation by news organizations should be voluntary.

I’d also ask you to amend clause 53, which allows the CRTC to compel any information it deems necessary from a news organization. The information gathering powers of the CRTC should be limited to information necessary to confirm the eligibility of news organizations, or to investigate a complaint. We feel strongly that open-ended powers to compel information are problematic in the context of news organizations. CRTC should not have powers to compel information from news organizations beyond what is strictly necessary to administer the act. Unlike broadcasters, newspaper organizations are not structured for detailed, ongoing regulatory reporting. We do not want newspapers spending precious resources responding to regulatory requests.

The Chair: Mr. Crawley, we are over the five minutes. Please wrap up.

Mr. Crawley: All right. I have one more recommendation. Amend clause 86, which sets out the mandatory reporting requirements. We are particularly troubled by the potential for government to compel information about our editorial.

We feel these amendments are reasonable, and we ask you to support them. Thank you.

The Chair: Thank you to our guests.

Colleagues, we have a long list of senators who want to ask questions. If I could ask my colleagues to stay within a four-minute parameter, including answers. I know it’s difficult to have parliamentarians and journalists be short and concise, but if we can — I do not like, as you know, cutting off anyone, but it comes with the job, unfortunately.


Senator Miville-Dechêne: My questions are for the two major Quebec newspapers here, and first of all for Mr. Levasseur. We haven’t heard from you, but I’d like to hear from you about La Presse, which has been very discreet in this whole saga. Where do you stand? Do you agree with what Le Devoir says about the idea that subscription is a good solution and that we shouldn’t demonize what’s happening on the value exchange side between platforms and media?

In short, where do you stand? You don’t have any agreements with the platforms yet?

Pierre-Elliott Levasseur, President of La Presse and Director of News Media Canada: First of all, each group has its own business model. I’m not here to comment on Le Devoir‘s business model or ours, because each model works. Mr. Crawley talked about their way of doing things; we have our own advertising-based model and that works very well for us too. I don’t want to comment on business models.

With regard to the value of the technology platforms created for us or that we create for them, yes, there is an exchange of value. However, we don’t perceive value from the platforms to be commensurate with our contribution. In Australia, they have signed agreements that reflect the true value of the content they receive for free. As we’ve seen, without the threat of the bill, there was no agreement in Canada. What we want is to find a way to get Bill C-18 passed, so that we are in a position to obtain a fair and equitable agreement for all media in Canada. We’ve been trying for years to reach agreements with the platforms.

The majority of media outlets in Canada have tried to get deals with Facebook and Google, only to have the door slammed in their faces. With the threat of the bill in this country, and now that a bill has been passed in Australia, suddenly, some media were able to make deals, but not all. It was the platforms that decided who had a deal and who didn’t. They decided the terms of the deals. They decided the terms of the agreements; whether it was the exit provisions or the amounts granted, it was Google that decided. I can assure you that Mr. Myles doesn’t have the same deal as CN2i, or Mr. Crawley, or the Toronto Star. The platforms dictate the terms and conditions. They dictate who gets a deal, who wins and who loses.

In our case, for example, we were negotiating an agreement pending Bill C-18. We’ve always been very supportive of the bill, but we were negotiating in good faith. One day out of the blue they called us, saying the negotiations were over. Why did they do that? It came from San Francisco.

Senator Miville-Dechêne: Faced with the situation, you want to regroup. We’re talking about 500 media outlets that could be eligible. The Google people say they’ll pull out if it doesn’t suit them. What do you think of this statement?

Mr. Levasseur: I think it’s very irresponsible for French-speaking and English-speaking Canadians. We’ve been building brands based on quality and rigour for years. I think we’ve proven, over the past 130 years, our ability to produce value-added content for the entire population.

Senator Miville-Dechêne: Doesn’t that worry you a little? If that happens, it will be terrible for the media to no longer have Google.


Senator Simons: I have two questions that I’m going to ask quickly so I get two answers.

In Australia, which is the much vaunted model, in the wake of the Australian bargaining system, Rupert Murdoch slashed staff at his papers, laying off 1,250 journalists, one in 20 of all of them. What assurances do we have that if this kind of arbitration works out for you, we’re not going to see similar cuts?

The second question, to follow up on Senator Miville-Dechêne, I like the word in French menace. It sounds much more threatening than the word “threat.” So if Google and Facebook are honest in their menace, what is that going to mean if you cannot share your content on Google and Facebook?

Mr. Levasseur: Is the question for me?

Senator Simons: I guess the first question is for Mr. Crawley or Mr. Deegan, and the second question is for anyone. Mr. Myles raised the issue.

If we assume that Facebook and Google are not bluffing, then you guys get nothing out of this deal; plus you lose access to the eyeballs of Canadians.

Mr. Crawley: Google is an important part of the media ecosystem; Thirty per cent of our traffic comes from Google search. That business could be disrupted in the next 6 to 12 months quite significantly by the difference that ChatGPT and generative AI is already making in only 6 months. The whole search business could be in a state of flux. We are sitting here today talking about the current situation, but that situation won’t be the same in 12 months’ times.

The fact is, at the moment, we pay quite a lot of money to Facebook and Google to deliver eyeballs. We depend on audience. During COVID, our audience went up 25% digitally.

Senator Simons: You pay them?

Mr. Crawley: Yes, we pay them.

Senator Simons: How do you pay them?

Mr. Crawley: We pay them a monthly fee for service because Facebook enables us to reach an audience that we would not otherwise reach.

Senator Simons: But if Facebook and Google refuse to carry any news, how will that work? The Australian example is not a positive one. More than 1,000 journalists lost their jobs in the wake of it.

Mr. Crawley: I think if you look at what has happened to journalism in Canada in the last 20 years, a lot of jobs have already disappeared. That factor has continued to bedevil the industry, and newsrooms are often very much smaller than they used to be. That’s pre-Bill C-18.

Mr. Myles: There is no silver bullet. There is no one measure that will make a difference for everybody, so we need to get all the programs in place. We need Bill C-18, the tax deductions and the labour costs of the newsroom. We need IGL because there are various business models, and I agree with Pierre-Elliott Levasseur in this department — no business model is better than the next.

The search will be troubled by AI, for sure. The impact, just to give you an average, Le Devoir has 40% of its traffic coming from Google search and close to 30% comes from social media. So yes, if Google and Facebook decided to shut down news content on their own platforms, we will suffer a lot. Direct traffic is less than 20%.

The days when a reader would open a newspaper from page 1 to the last page are gone. People discover content through the means of social platforms and search, and this threat is real. This is why I advocate for a quick answer between the adoption of Bill C-18 and the publication of the rules and regulations. It should be swift and efficient.


Senator Cormier: My questions will be for Mr. Crawley and Mr. Myles. Mr. Levasseur was saying that business models differ depending on the media, and therefore that agreements are different with Google and Facebook. I imagine you’re not in a position to divulge the content of the agreements, but can you tell us about the negotiation process? What concerns do you have that your agreements won’t be renewed if Bill C-18 isn’t passed? I’d like to better understand how these agreements work.

Mr. Myles: Thank you. You’ve put your finger on an issue: These are confidential agreements negotiated by private companies. On the other hand, there’s enough business intelligence and information circulating around the world for me to be able to say that the agreement was the subject of real negotiations. It wasn’t accepted out of hand; we had the choice of making offers and counter-offers. Remember, we started in 2014 with MSN. From 2020, with Apple News+, we projected ourselves as a media willing to maintain conversations.

Both ways have to do with reach. The bigger you are, the greater your reach, the more traffic you get and the better deal you can negotiate. Otherwise, you do what the Australians do on labour costs. There’s a rule that says we charge Google 20% of labour costs and Facebook 10% of labour costs. Of the two models, the labour model is much more attractive for sustaining the industry and ensuring fairness.

There are caps on tax credits in Quebec and Canada. In Canada, there’s a ceiling for a salary of $55,000, and it’s a little higher in Quebec. So we take a maximum salary to establish a tax credit; we can use this model too. These are structuring agreements when based on the workforce. In terms of scope, it’s structuring for large groups. In terms of workforce, it ensures a greater diversity of voices.

What could happen? I don’t know. I’m not in the shoes of Google or Meta, but if the threat of Bill C-18 disappears, will the deals disappear? All I can tell you is what I’ve read so far in the world literature and what I’ve seen in other countries. The platforms have already begun to hint that they won’t be renewing the first agreements.

Senator Cormier: Is the duration of your agreements public?

Mr. Myles: This may have been part of the confidentiality agreements. These are not permanent agreements; they are agreements with deadlines and, like all contracts between parties, nothing lasts forever.


Mr. Crawley: [Technical difficulties] agreements, some of which go back long before Apple and Google. We have had licensing content agreements with entities like Dow Jones for years. People value the business and finance content.

It’s a more complicated relationship than just simply them paying for use of our content. Google, for instance, also provides financing for technological improvement to some of our products; they give support in terms of their knowledge of rebuilding an app — putting money behind a better Android app. That’s one example of the kinds of parts of the agreements. It isn’t just about the content.

But they have specific requests in terms of the kinds of content they want. Apple, particularly, likes personal finance and business. They want it for their own subscription product.


Senator Cardozo: I’ll ask my two questions right away. Mr. Myles and Mr. Levasseur, I’d like to know if the current situation of French-language media is more difficult and more urgent than that of English-language media in Canada. Is this bill more necessary for you? My second question is a realpolitik question for Mr. Crawley.


Mr. Crawley and Mr. Deegan, you’ve asked for some changes to the bill. You know that in this political system that if we make changes and send the bill back, the bill might not come back in time. Are you willing to take that risk? Is it that important to you?

Mr. Levasseur: As far as I’m concerned, the intent of the bill is not to find balance, exactly; it’s more about giving us the ability to sign a fair commercial arrangements for value that we believe we create for the tech platforms. They’ve been using our content and benefiting from it, and generating money from our content. The proof that there’s value is that; under the threat of legislation, they’ve signed deals in Canada and Australia.

We’re not asking for a handout; we’re asking for the opportunity to negotiate a fair deal. We should have had this type of thing, had we been able to negotiate a fair deal, because they want a duopoly, and if we had not been 500 different media in Canada —. It is David versus Goliath, and they could afford to just slam the door in our face. If that all hadn’t been the case, we would have had a fair deal in place.

For me, that is the purpose of Bill C-18.

I just want to remind people of this: We create value for them — the proof is out there — and we don’t extract any of it. That’s number one.


As far as Quebec is concerned, we each have our own business models. As Brian said, he has a profitable operation. We share our numbers publicly and we have a profitable operation and a business model that works for us. As you know, we went through a digital transformation about ten years ago. We moved on to a second transformation of our business model in 2018, and both have worked very well. We invest heavily in innovation every year; we’re talking tens of millions of dollars in innovation in our advertising products, because in our model, advertising is important for business intelligence and for our tools for the newsroom. We intend to invest heavily in the newsroom over the next few years.

Contrary to many media, our newsroom is the same size today as it was in 2008-09. We have not disinvested in our newsroom. However, it’s clear that the needs of users and readers in society are changing, and changing fast. If we want to remain relevant — for credible, quality media that want to remain relevant in the future — that means we’ll have to make significant investments in newsrooms. Over the past few years, this has been done in terms of business intelligence, advertising, business models and cost structures. The future is in the newsroom. We need the bill.

Senator Cardozo: I’d like to ask Mr. Myles if the situation is different for French-language media.

Mr. Myles: It’s different depending on several variables: media that rely exclusively on free content or haven’t leveraged readers or donors, media that are still too entrenched in print to the detriment of digital, and those that operate in devitalized markets with declining demographics or smaller markets. These are three risk factors that will make it difficult, with or without Bill C-18. Free content, print-dependent and devitalized markets: To me, these are risk factors everywhere, and there are risk factors in English-speaking markets too.

The Chair: Thank you, Mr. Myles. I must keep my eye on the clock.


He can answer, if he wants to, later on, but I have to move on.

Senator Manning: My question is for Mr. Deegan. I want to ask two questions because of time.

The government has a rough estimate that this bill will create approximately $215 million for Canadian news entities here in the country. The Parliamentary Budget Officer says he estimates around $300 million from the major corporations, such as Meta, Google and others.

Whatever the figure, what happens if the giant companies like Google and Meta decide not to participate?

The Parliamentary Budget Officer also said that, in his estimation, three quarters of the funding that will be brought forward will be going to the CBC and other large broadcasters, such as Rogers and Bell. What does that do to the smaller players in the game?

Mr. Deegan: Thank you very much for the question.

In terms of estimates, we don’t really know what the precise number is. We know it’s north of $200 million in Australia. That’s what Rod Sims, the former chair of the Australian Competition and Consumer Commission, or ACCC said. Based on our population and the difference in size between Canada and Australia, we think it’s more than that.

Frankly, we couldn’t understand the PBO’s methodology in terms of the inputs they put into it. We’re not sure that makes sense, but it’s probably somewhere in the ballpark.

In terms of the broadcasters being included in the bill, they are included in Australia. Our sole focus is on our own members and making sure they get a fair agreement. A Toronto Star-type agreement for our smaller members is what we’re looking for.

In terms of entering negotiation, what seems to be a proxy is based on newsroom salary and wages for some of the agreements that we’ve heard about, anecdotally. In our view, we would look to share as we form a collective. Pierre-Elliott Levasseur from La Presse is going to be a key leader in our collective. What we aim to do is share the settlement on basically a per capita basis, so that small players benefit the same as larger players. That’s our philosophy on it.

Senator Manning: In regard to the hit it would take to the smaller players, do you see this as detrimental to their operations going forward?

Mr. Deegan: Not at all. The truth is, right now, most of the larger players have deals. La Presse doesn’t have a deal, Postmedia doesn’t have a Meta deal, but most of the other large players have deals. This is really about the smaller independents getting a deal. Google and Meta have done deals. They’ll tell you they’re in 120 communities, they’ve actually done deals with 12 companies, I believe. These are chains that they’ve made deals with. In this bill right now, what we’re trying to solve for — and again I salute Kevin Waugh on the House side, who pushed hard for the family members to be included in that two-employee minimum. What this bill is really about is ensuring the small independent mom and pops, like Sarah Holmes and her husband on Gabriola Island, folks like that get the fair deal that the Toronto Star got.

Senator Dasko: Pursuing the topic of what happens if these platforms leave, in particular Facebook, not Google. Google has been a little — when they came here, I asked them what they would do, and they said they hadn’t decided yet. But Facebook has been quite categorical in speaking with us, and they said they were going to leave. They had said the news links in Canada are not of great value to them, they’ve said their subscribers are not interested in news. In fact, some of them even despise the news. This is what they’ve said to us.

I’d like to ask Mr. Levasseur about La Presse and Mr. Crawley about The Globe and Mail. What would the impact be if Facebook leaves?

Mr. Crawley: If Facebook pulls outline, millions of dollars go away, from The Globe and Mail’s point of view. They have a deal with us, and it’s worth a significant amount of money. It’s why we have been able to keep growing our revenue and we’ve had additional licensing money over the last several years as a result of these deals.

We have a long-term deal with Apple, which continues to build their subscription model, so there will be other players that we can still work with. I haven’t heard anyone except Facebook, or Google talk about the consequences. I don’t think Apple has said anything on this point.

I’m more concerned about the threat to the independence of media rather than the loss of a few million dollars. I think it is a much more long-term threat to our industry if we don’t get the language of this bill right. The CRTC has not had a previous history of dealing with newspapers. They have a vast experience dealing with broadcasting, but not with newspapers. It’s a different industry.

Senator Dasko: Mr. Levasseur, what would be the impact on La Presse if Facebook pulled out?

Mr. Levasseur: It would be less than a million dollars for us in terms of a financial hit. But this, to me, is mostly about the United States. They’re worried about legislation in the United States, they don’t want this to spill over to the United States, and Canada is closer than Australia. I think this is more of a response not to the value that we create for them or they create for us, I don’t think it’s about a fair commercial arrangement, I think they’re worried about whether this legislation creeps into the United States. That is a much more important financial impact for them.

I don’t think that they’re saying that there’s no value in what we’re creating for them or what they can create for us and what we can come to as an agreement, this is a lot of smoke and mirrors to try to send a message to American legislators and media. If you do this in the United States, this is potentially what we’re going to do.

Senator Dasko: Wouldn’t you still be able to enter into agreements with Facebook? They would want your money, right?

Mr. Crawley: Remember what happened in Australia. Before the legislation passed, the three major Australian groups all struck their own deals. The deals that were mentioned earlier with the smaller papers followed the passing of the legislation, but the Murdoch papers, the Fairfax papers, they all struck their own deals beforehand. Obviously, we have our deals going back several years with many of these companies.

Mr. Levasseur: The specific point is, before the threat of legislation, there were no deals, and now with legislation, they have to have a deal. If this legislation doesn’t pass, there’s nothing that prevents Google or Facebook from pulling away from their existing deals, or the deals have had a timeline to them and they will not be renewed.

Senator Wallin: I’ll begin with Mr. Deegan and then a question for Mr. Crawley. You have said, Mr. Deegan, that the dominant platforms have been able to pick winners and losers, but with Bill C-18 you seem to be willing to give that same power to the CRTC as a very inexperienced regulator. Why do you think that’s a better circumstance?

The second question is, you’ve talked fundamentally about the importance of advertising and the government’s role in advertising. We’ve all seen many local papers fail because the government cut off advertising. The CBC is one of the biggest, and will be one of the biggest beneficiaries of this bill. Do you believe they should be cut off their source of outside ad revenue?

Mr. Deegan: To answer your second question first, yes. The CBC should not be accepting advertising for news and current affairs.

Senator, on our website, if you type in “Pamela Wallin” on our News Media Canada website, you’ll find a story about when you gave the Wadena News, back in 2017, the Senate 150 Medal. Now they’re out of business. In that letter Alison Squires wrote in her publisher’s letter, which you referred to in the Senate, she talks about advertising and the local community wasn’t advertising, local government wasn’t advertising and the feds weren’t advertising. You’ve hit the nail on the head. It’s a huge issue, we need the feds to step up, and federal ad dollars shouldn’t be going to the CBC. Frankly, private sector ad dollars shouldn’t be going to their news and current affairs properties. We’re competing head to head with them.

Senator Wallin: Why is having the government as your regulator, the CRTC — which clearly does not understand the print media — better than having the platforms pick winners and losers?

Mr. Deegan: Because right now with picking winners and losers, the problem is we have losers. We have folks like the Wadena News. That’s the problem. We have a market failure here. It isn’t working, so we need a solution, and that’s why we’ve come to the government, even though, frankly, we would like to stay as far away from government and the CRTC as we can, but we do need them.

To Mr. Crawley’s point, though, we want to limit the role of the CRTC. We don’t want them snooping around in our news rooms, so the amendments that we proposed — to Senator Cardozo’s question earlier — we’ve talked to the minister’s office, we’ve talked to the officials at Canadian Heritage, we believe these amendments are doable, and we believe you can get them done. We want both. We want this legislation passed by the end of June, and we want those amendments.

Senator Wallin: Mr. Crawley, you have found mechanisms to survive with your deals, with maintaining your subscription rates and with selling pay wall technology to others. Is it worth the risk of having the government now interfere or snoop in your news rooms in order for the exchange of cash, which you’re already getting through the deals you’ve signed?

Mr. Crawley: At a time when there are questions of trust in media, we want to make sure that trust in media is something the people believe in. I don’t think that’s helped, in Paul Deegan’s words, to have the CRTC to snoop into what is going on in our news rooms and have some say in what would otherwise be a commercial agreement that is struck between the parties. Value will be found in those agreements.

Senator Wallin: We’ve already had suggestions from ministers that they do actually consider that one of their rights is to make judgments on content. I’m assuming that concerns you.

Mr. Crawley: It does.

Senator Wallin: Thank you.

The Chair: My question has to do with the fact that Bill C-18 is a piece of legislation that will be followed by regulations. As we know, government and regulators come up with regulations. We also have a long history in this country of government and regulators providing tremendous privileges to the big three, our traditional broadcasters. In my mind, these broadcasters — Bell, Rogers and CBC — have benefited immensely from these new digital platforms and have probably created the most competition with print media in this country.

Now we’re creating a bill wherein, of course, we’re calling on Google and Meta, the creators of these platforms, to come up with a figure. We can debate if it will be $300 million or $400 million, but one thing there’s no debate on, if Meta and Google pull the plug — I believe Meta will pull the plug — that figure will go down even further. In the meantime, the CBC will continue to receive its $1.2 billion subsidy, which to this day, as parliamentarians, we don’t know what percentage they’re investing in their digital platforms, which again, are competing directly with print media.

I’m very much in favour of the objective of this bill, but I go back to what Senator Manning and Senator Wallin have said: I don’t see how it will help the smaller players compared to those three giants in this context.

In all due respect, Mr. Deegan, I appreciate that some of the print media have made deals directly with these platforms, but I’m still very skeptical that the big three will get a disproportionate piece of the pie at your expense.

Mr. Deegan: Senator, I hear you. In terms of our own members, we’re trying to look out for the smaller independent players right now. We represent all. We have everyone from The Globe and Mail, the Toronto Star, La Presse and Le Devoir, right down to the independents. Our goal is to make sure that those smaller players, which many of them are really on life support, frankly, in terms of their finances — advertising has dried up — we’re just trying to get them a fair deal.

I understand the concerns, particularly with the CBC. I think one of the ways to start to level that playing field, to Senator Wallin’s point, is the commercial advertising with respect to CBC News and current affairs. They should not be in that game. We’re trying to make sure —

The Chair: Sorry, should the big three be excluded from this piece of legislation? Bell, Rogers and CBC?

Mr. Deegan: Our concern is really for our own print and digital members. It’s not for us to really comment on them, but I think we have to ensure that the small independent media in this country survive, because you can’t just rely on the public broadcaster to serve those small communities. That’s essentially what is happening. I think Mr. Levasseur has something to add.

Mr. Levasseur: This isn’t a pool of money that they’re going to decide the size of and then distribute. These are deals that we’re going to negotiate with them. As long as we get a fair and reasonable deal for those that negotiate with Google and Facebook, we could get $200 million and the CBC could get $100 million. It’s not a pool of money that gets subdivided; it’s an individual negotiation.

What we’re looking to do, and I think there’s an assumption right now that those who have deals are not going to negotiate collectively. I don’t think that’s the case. I think there are many people who have deals today that feel they don’t have the size of deal they deserve. I think what they’re looking to do is to say, okay, what’s the right mechanism for the deal? What’s the right deal? Then we’re going to split it equitably among us.

So, for instance, if one group has a much better deal today, then why not that deal for everybody? Why don’t we have as many people in Canada participating together and getting that same deal? That’s what we’re going to do, and then the broadcasters will negotiate their deals.

Senator Harder: Thank you. My quick question is to Mr. Deegan, and then I have another one for Mr. Levasseur.

Mr. Deegan, earlier in your testimony you said you wanted this bill implemented by the summer. You’ve also indicated amendments that you and some of your members would like to see. I’m asking Senator Cardozo’s question directly. Ours is the obligation to do what is possible, but if you had one choice, what would it be?

Mr. Deegan: To get it done by the end of June, but I believe and I have faith that you can do both.

Senator Harder: I will certainly try, but I just want to have the order. I think that’s important for us all to hear.

Mr. Levasseur, we’ve heard testimony from witnesses who have said print media is a bunch of dinosaurs and it’s going to die, that we’re just slowing an inevitable death. They are incapable of innovation. Could you respond? I know your organization in particular has been very innovative. What would you do further with a deal in place?

Mr. Levasseur: I would continue to do what we’re doing now, which is on an advertising front, we’re competing against Google, Facebook, the big three and many others. We have to continue to innovate in our ad products and in our user experience.

I think most importantly, user needs have evolved. Reader needs have evolved. We, as traditional media, need to evolve with the reader. We need to put the reader at the centre, and we need to adapt many things in our newsroom and the way we cover news over the coming years to ensure that we remain relevant to readers, so that credible media with tremendous rigour continue to be at the forefront of news creation and news distribution.

Our expectation in the coming years — it’s an expectation, but we intend to invest important sums of money in the newsroom in the coming years. That’s our intent. We’ve done a very important job in terms of our technology, our ad infrastructure and our distribution products, be it on the tablet, mobile or the web. We think there’s a big investment to be made in the newsroom over the next couple of years.

Senator Harder: Thank you.

The Chair: Colleagues, I want to remind everyone that the proposed amendment from News Media Canada in French and English has been distributed to all of you, so you should have a copy. You should have received it during this meeting.

We have three minutes left. I would like to give the opportunity to our witnesses, if you would like to address any issues that you think you haven’t had an opportunity to address because of the constraints of time, please do so in the last two or three minutes.

Mr. Deegan: I’ll conclude just by referencing a conversation I had with Senator Manning a few months ago. He told me, growing up in the town that he did, his dad subscribed to Time and Newsweek, and that was kind of his window on the world. I think that’s really what this is about, making sure that people have access to quality news content.

Right now, when you think of, let’s say, perhaps, Meta blocking news, what will be left on their platform? They’re the plumbing of social media, and in there you’ve got the clean drinking water, I would describe, which is news, but then there are all sorts of sewage, such as the misinformation and disinformation. Really what this bill is about is ensuring that local news survives. The larger players have deals in place, and we need to make sure this legislation get across the finish line by the end of June so that the smaller players, the independents and the mid-sized players get the same type of deal as the larger players. From our perspective, that’s what this is all about.

The Chair: Mr. Myles? Mr. Crawley?

Mr. Crawley: I’d love to see the legislation approved and passed, but I do not want to see it passed in its current form. The language, as it stands, would be, in my view, dangerous to the freedom of media. That’s my sort of plea to you, to look at those amendments and incorporate them into the language of the bill to protect us against that.

The Chair: Mr. Myles?


Mr. Myles: I feel it is very important that programs be preserved, and perhaps we should consider reforming the local journalism initiative to support small publications. Bill C-18 will be good for small media, but it won’t miraculously save them. If assistance is predicated on reach or newsroom size, small players will inherently receive smaller amounts. What’s more, legislators must have a concern for balance.

Another way to achieve this would be to ensure that there is a maximization of amounts, to avoid the large groups appropriating the biggest slice of the pie.


The Chair: News Media Canada, Le Devoir and The Globe and Mail, we thank you very much for coming before our committee. Let it not be said that parliamentarians and journalists cannot work within a constrained period of time. Thank you very much.

I would now like to introduce our second panel. Jesse Brown, Publisher of Canadaland, is with us by video conference; Jen Gerson, an independent journalist, also with us by video conference; and in the room is Jeff Elgie, Chief Executive Officer of Village Media. Each of you will have five minutes for opening statements, and then I will turn the floor over to my colleagues for questions. We will start with Canadaland. Mr. Brown, you have the floor.

Jesse Brown, Publisher, Canadaland: Good morning. Thank you very much for inviting me to speak this morning.

I know you’ve heard a lot about the financial crisis faced by traditional news publishers. I’m the publisher of an independent digital news organization, Canadaland. We are not in a state of financial crisis. We employ 20 people full time. We publish in both official languages. We publish Indigenous-led news, as well. We do not have deals with Meta or Google.

Like other small digital news publishers, we have found a way to thrive online.

But there is a crisis in the news industry that does impact us; I think it afflicts every news organization in Canada. It’s one we haven’t been talking about enough. I’m talking about the crisis in trust.

There’s a growing body of evidence and research: research from the Reuters Institute for the Study of Journalism at Oxford University, the Proof Strategies CanTrust Index and public opinion research from Maru Public Opinion. All of those are attempts to look into the levels of trust Canadians have in traditional news. They have all found that it has never been lower. In fact, for the first time ever, a majority of Canadians say they do not trust the news. Over 70% of Canadians now say they actively avoid consuming the news. This problem is particularly bad with young Canadians; they are the most distrustful group toward news.

That research confirms what I think journalists see and experience every day: Something terrible has happened to our relationship with the public, whom we try to inform and serve. They just don’t trust us. In fact, they are increasingly critical and angry toward us. They can even become abusive and hostile.

Our general response has been to try to correct them and tell them they are wrong to distrust us. We scold them and tell them they are misinformed. Perhaps they are paranoid or have fallen prey to disinformation or conspiracy theories.

If we actually ask them why they distrust the news, which journalists should do — we should be curious and ask questions — they will answer. Researchers at Oxford University asked them, and 73% of Canadians said that they do not believe the news is free from corporate influence. It was the top answer given as to why they do not trust the news.

That is highly relevant for your process here on Bill C-18, because in anticipation of and under the threat of Bill C-18, as you know, two huge corporations, which are themselves highly problematic corporations when it comes to public trust, started funding certain news organizations because this bill was coming. When Canadians asked how much money has been given to the news, I read every day and how do they determine which ones get money and which ones don’t? Those Canadians are told that’s a secret; those answers are a secret. Once Bill C-18 becomes law, every qualifying news organization will be in a position to enter into their own secret deal with Facebook and Google. That secrecy is poisonous to trust.

Canadaland has joined with over 100 other news publishers as a coalition of independent digital publishers. We have proposed to you a solution to this crisis in trust. What good is it to sustain news information if no one trusts it? We have sent you a few proposed amendments to Bill C-18. One of which is a transparency mechanism that would give Canadians this missing, secret information. If the news is to be funded by tech platforms in part, then at a bare minimum, Canadians must be given information about who is getting that money, how much each news organization is getting and why.

Our proposed amendment would standardize the funding for all qualifying news organizations. Everyone would get the same amount relative to the size of their editorial expenditures, not payroll. That means that we could simply tell the public how much each organization is getting, and we could assure them that we don’t have to care about whether Facebook and Google like our coverage of them. If we’re entering into secret deals with Facebook and Google, it’s a reasonable question for the public to ask, does that affect your coverage of them, and will you stop criticizing them if you need their money and are trying to get the best deal possible? This amendment would relieve us of having to care what they think because everyone would get the same based on a universal, fair formula. I think that would do a tremendous amount of good in terms of restoring trust and preserving the independence of Canada’s media. It would also mean that Google and Facebook would no longer be able to pick winners and losers by giving some news organizations far better deals than others.

I have been told by a member of this committee, Senator Simons, and she suggested to me that that our amendment is a nonstarter because the position that the government has taken is that this lack of transparency is a feature of this bill and not a bug. The minister of Canadian Heritage has praised these secret deals. He calls them market-based solutions that the government, he is proud to say, has no role in. I suggest to you that this is a disingenuous position. It is an attempt to shrug off the responsibility for the harm that this bill is already causing using spin and sophistry.

These deals are only happening because of Bill C-18. That makes the government responsible for the impact it’s having on public trust in news. Pretending otherwise is beneath everyone’s standards and it is far less than Canadians deserve. Bill C-18, as written, bakes in secrecy about how Canadian news is funded. It makes permanent the secret formulas by which private companies determine how much each news publisher is worth. It forces backroom deals, which disincentive news companies from criticizing, investigating and exposing Google and Facebook. It forces us to keep our own readers and listeners in the dark about who is paying us to report the news to them. Bill C-18 might financially sustain some news publishers, but at what cost?

If our proposed solution to this lack of transparency is to be deemed a nonstarter, then I urge you to find a different solution that will give Canadians basic transparency, and I suggest that you have a responsibility to do so.

The Chair: Jen Gerson, independent journalist, thank you.

Jen Gerson, Independent Journalist, as an individual: Hello, senators. Thank you for having me and I would also like to thank you for the quality of debate that has been visible during this committee today. My name is Jen Gerson, and I am the co-founder of The Line and one of the known enfants terribles of the Canadian media. I run a Substack-based commentary website with my co-founder Matt Gurney. We are totally independent. We have not made any deals with Facebook or Meta. We are totally subscriber-funded and are happy with the level of growth we have seen to date, and we are even looking at beginning to expand our operation. Like Jesse Brown, we don’t require any additional government funding to help us sustain our growth or reach Canadians.

I will just begin my issues with this bill by pointing out that I agree with everything that Mr. Brown just said, except I am even more curmudgeonly than he is. I think this bill is fundamentally, conceptually flawed, and I hate to bring this to the Senate at this late juncture, but I’m not sure that transparency measures, which I agree with, or amendments can fix it. Fundamentally, there is nothing grassroots or collaborative about this bill. This bill clearly came about as a result of a set of collaborations and discussions between lobbies, who were more or less dominated by the existing legacy players and government.

If this had truly been a collaborative grassroots effort, Bill C-18 would not look anything like this. It would have built-in transparency measures. The CRTC would have nothing to do with it, and it would probably look something more like a straightforward taxation of digital media that would then be reapportioned out to both independent and legacy media according to a very transparent, easily published formula of some kind.

The fact is that we don’t see that. Instead what we’re seeing is a kind of shoddy rehash of the Australian model, which tells you who is actually pushing for this. For example, we know that many legacy media have, for the last decade, been complaining about the fact that Google and Facebook steal their content and their value. Respectfully, if this content had any value to these big legacy players, they wouldn’t require legislation in order to milk the value out of it.

If this content had in value to organizations like Facebook and Google, they would be willing to engage in truly market-based solutions by engaging in deals with these corporations directly. No legislation would be required at all. The fact that it has taken legislation to force these deals out of these companies tells you that the real value they see is in avoiding legislation, not in the actual content itself.

That presents me with a best-case scenario with this deal as presented. The best-case scenario you could get out of this deal is a system by which — bluntly, I believe that the legacy organizations would disproportionately benefit from largely secret deals with corporations. They would become increasingly dependent on the success of these corporations, and as we have seen, some of these corporations will pull out of the media ecosystem altogether.

You have had previous witnesses that have said that even if Meta followed through on its threat to expunge all news content from its platform, they might lose only $1 million, which would be no big deal for them. Well, of course, it wouldn’t. It would be no big deal for the incumbent players to potentially lose Facebook as a distribution model. Let me tell you who it would be a big deal for: Independent media, start-up media and media that are trying to build their brands in the marketplace. The reason is smaller and independent media are disproportionately reliant on social media to build a brand, develop an audience and get a network across. In order to preserve, once again, the legacy outlet’s access to distribution and audience, you are potentially willing to cut off the most powerful tools that the smaller media have as a potential tool for developing alternative systems.

The last thing I would point out here is that I think that the status quo isn’t adequate. The type of funding that you are hoping to provide to legacy media is overwhelmingly going to go to companies that have already demonstrated that they are willing to cut costs, engage in mass layoffs and have already undercut the amount of quality reporting that they do. The idea that the big legacy media are producing the high-quality content and that this is mixed in with the bilge of non-quality content, I would dispute that firmly. Go look at most Postmedia publications today and tell me which one of them is devoting significant resources to the type of high-quality content they need to be producing and compare that to what it was 10 years ago. Continuing to give failing companies money to do things that they will continue to do, which involves reducing capital to the types of quality investment in journalism that they have already demonstrated that they are willing to do, is not a winning solution.

If the government needs to step in on this file at all, there are so many better mechanisms and so many more transparent mechanisms that it could use to do so. I don’t see how creating this particular incentive structure is sustainable in the long term, desirable for trust issues, nor do I think, bluntly, it will work.

The Chair: Thank you very much. Next up, we have Jeff Elgie, Chief Executive Officer, Village Media.

Jeff Elgie, Chief Executive Officer, Village Media: Honourable members of this committee, good morning and thank you for having me today. As brief introduction, I am CEO of Village Media. Headquartered in Sault Ste. Marie, Ontario, we began with one local news publication and two journalists just 10 years ago. Today, we own and operate 25 news publications in Ontario and employ 145 Canadians, of whom approximately 90 are in our news rooms. Our newest site, called The Trillium, is one of the largest press bureaus that covers Ontario’s legislature.

On our sites, you’ll find a rich and varied collection of local news coverage that helps people navigate their day-to-day lives from schools to city council, from hospitals to hockey rinks, from courtrooms to community parades. Beyond the news of the hour, our sites also dig deeper to serious issues that impact our home towns, including mental health, addictions, climate change and poverty. Access is completely free. We are not paywalled, primarily due to strong support from local advertisers.

Our mission is to strengthen the communities that we serve. Beyond operating local news sites, Village Media has developed technology in-house, a platform that now runs our own publications along with those of Glacier Media, Dougall Media, Great West Media and soon-to-be Black Press Media. By this time next year, our built-in-Canada publishing platform will power 150 Canadian news publications and another 50 international publications.

I sit here before you today as a news publisher and entrepreneur who looks at this industry from a different perspective than many of our peers. We are a company that was born digital and has been brought up with Google and Facebook.

The point I hope to make today is very direct. We strongly believe that there are fundamental issues with Bill C-18, which, instead of helping our industry, could hurt it substantially. The original premise of the bill was that large tech platforms take our content without our consent. This is not an accurate depiction of our relationship. Each of us has had the ability to prevent Google from crawling our sites at any time, just as we have the ability to simply stop publishing our content to Facebook. We don’t do this, however, because we benefit greatly from the traffic back to our sites that we, in turn, are able to monetize and form new audiences, subscribers and followers that we would otherwise be challenged to reach. These platforms are the best on-ramp to news that we have found, and we have tested many. Today, Google and Facebook combined generate almost 50% of our traffic on an ongoing basis. This is not unique to us. You will find similar numbers across our entire industry, legacy or new.

Having said all of that, we do recognize that this government wants to pass this bill. While starting over may be most appealing to us, we understand that the most realistic solution might be to amend the bill appropriately. I am in agreement with a number of my colleagues, including those on this panel, and the position that we have collectively put forward as an independent group of online news publishers.

To clarify, I agree that Google and Facebook pull a significant share of advertising revenue from the Canadian marketplace. That advertising revenue historically made its way to media companies, which used it, in part, to fund journalism. In order to ensure there remains a relationship between Canadian ad dollars and Canadian journalism, we do feel it is reasonable that these companies help support the industry going forward. I don’t think they disagree.

So it is our view that a universal, transparent funding formula correlated to journalism expenditure represents the most effective solution. As it stands, there is the potential for Bill C-18 to favour large players, regardless of journalism expenditure, and to create hostility in the industry due to the potential for secret deals to be negotiated. It represents the opposite of what the messaging has been on this file all along — to create a level playing field. The issue, in fact, has already been created.

We, Village Media, have been one of the fortunate companies to have signed content licensing deals with both Google and Facebook, so I sit in front of you here today, advantaged by a revenue source that many of my peers do not have. Why would we leave Bill C-18 open to allow this scenario to persist?

There is also now a much worse outcome that we need to consider. If Facebook pulls out of news in Canada, as they have indicated, it will have a devastating impact on Canada’s digital news ecosystem. As mentioned earlier, Google and Facebook have been the best on-ramps to our local news sites. In the absence of either of them, sustainably launching new sites or even sustaining recently launched sites may no longer be possible. Even worse, Canadians will no longer be exposed to news in that environment. At a time when voter turnout is at record lows and we can expect to be flooded with infamous information through technologies like generative AI, the missing voices of Canadian journalists in these environments could be damaging to society.

In our 10 years of operation, Village Media has gone into each year with an expectation of growth and continued sustainability. We are profitable, and we reinvest our profits by expanding into new communities and growing our newsrooms. However, recently and for the first time ever, our company has paused almost all new hiring and suspended all new community launch plans. The potential outcome of Bill C-18 has put our progress at risk. I ask you respectfully to very carefully consider this bill. Thank you.


Senator Miville-Dechêne: This is a question for Ms. Gerson. I listened to you carefully. Like everyone else, I understand your anxiety about the unknown ahead and the fact that you’re worried. On the other hand, it seems to me that your analysis is a little dichotomous. If there is value in traditional media, why wouldn’t platforms see it and negotiate? That’s what you’re saying. That gives Google a lot of credit. In general, companies don’t necessarily want to share revenues. You also seem to be saying that all the traditional media are dinosaurs and don’t come out with news. It can certainly be said that, among the small and large traditional media, some are better than others in terms of journalism. It seems to me that your analysis is flawed, insofar as there are traditional media that contribute to the public interest.


Ms. Gerson: Thank you very much for that question. Mostly I agree with you. I have no particular problem or objection with a private company negotiating with a private company in a mutually beneficial agreement. If Google or Facebook or any of these tech companies feel that they should be engaged in an unmediated negotiation with one another in order to share content or whatever else, as we’ve seen, that’s not the purview of government to deal with. In that kind of situation, where value is seen by both parties, there is no need for legislation. That’s the problem here.

If these companies are negotiating with private companies in order to secure content licensing deals, great, super, awesome; the government doesn’t need to step in here. But if these companies are only negotiating with private companies because they fear Bill C-18, then they’re not negotiating out of any kind of mutually agreed-upon value; they are negotiating because they want to avoid legislation. The value is only inherent in the power that the government can use to create leverage on behalf of the media companies. Now, whether or not you think that’s a good thing or a bad thing depends on your point of view. Personally, I don’t think that’s ideal. I don’t think that creating a captured environment where media is dependent upon the government to force companies to create value for them is going to create a healthy, trust-rich environment for either the companies, the audiences, the media organizations or the government. I think that philosophically, it is a lose-lose situation all around.

As for the other point that you made and I thought was a very good point, just because there are losers in media doesn’t mean there is a market failure. There are going to be winners and losers; it is a competitive environment. There are going to be small companies that can’t hack it. There are going to be large companies that do. I think that we’ve overwhelmingly seen that companies that invest in quality, that have good relationships with their audiences and that scale appropriately to what they are hoping to achieve tend to be very successful in media.

There is a model for success. Let’s remember that a lot of the failures or collapses that we’re seeing are coming as a result of poor business decisions and poor vision as a result of many years of, frankly, terrible business practices. I think that stepping in to save a lot of those companies with forced legislation of this kind is a moral hazard problem. It’s only going to continue to reward them for poor business practices that continue to put journalism last.

Senator Wallin: Thank you. I have a quick question for Jesse Brown.

When you were talking at the beginning about creating more distrust in media because of the issue of corporate influence, was your concern the same about what we’ve seen in terms of direct government funding over the last few years? Has that fuelled or contributed to that issue, as well?

I’m assuming your position is “let’s keep it all out if we possibly can,” because whether the funding is corporate or government, it undermines reputation.

Mr. Brown: Yes, I do feel that government funding has contributed to the erosion of trust, and the research supports that. The levels were declining, but they started declining much more sharply once government funding became available.

Canadaland does not accept government media subsidies.

As a publisher, I’m surveying the landscape. My original position was that all of these things are a threat to independence and a threat to trust levels, but as Ms. Gerson pointed out, the inequity in the playing field was done already. This isn’t a hypothetical. Google and Facebook have already chosen who wins and who succeeds already. It has been not only the biggest media companies that have received most of the money but also the ones that were using their editorial pages to bash big tech. Some of that criticism has stopped now that the deals are in place. That’s a very dangerous precedent.

All of those things contribute to the public having very legitimate questions, and I think it is a legitimate erosion of trust.

I have to act as a realist and pragmatist as a business owner. These media subsidies are available. They are arming our competitors to compete with us. In fact, our competitors have used those subsidies to hire away our employees and launch rival products that directly compete with Canadaland in the podcast news market, which we pioneered in Canada.

We’re already suffering from the inequities in the playing field that these measures have created. What I’m trying to do now, and why I’ve joined a coalition of other independent digital news publishers is in the spirit of compromise: If this is going to happen whether I or we like it or not, then it should be as fair and as transparent as possible.

Senator Wallin: Ms. Gerson, whether it’s forced government funding or existing government funding, or forced corporate funding, as this bill would do — I think I’m paraphrasing Jesse Brown accurately by saying this — it potentially leads to self-censorship. We’re already seeing that.

Ms. Gerson: Yes, everything about this bill is a disaster. Any kind of government funding to media where you have the entire media market, to some degree, dependent upon legislation or government funding will inherently damage not only trust in media but media itself. It is a corrosive, poisonous thing. I’m sure there’s a business-school word for it.

But as Jesse Brown noted, when your competitors are all picking up the subsidies, you have to in order to compete. Even companies that would be philosophically dead opposed to any kind of help in this regard feel as if they have to start taking the money coming out of these programs and systems just to compete with their competitors. Again, that is an absolutely stifling thing to do. It makes start-ups almost impossible and innovation very difficult.

This is a bad system.

If you were to have me personally craft a system that deals with the trust-in-media issues and the lack-of-coverage-in-communities issues, I wouldn’t go about that through any kind of funding mechanism; I would go about that through a wholesale mandate review of the CBC. I would take a totally different approach to this, and it wouldn’t involve government funding or legislation at all.

Senator Simons: I want to thank all of our witnesses, especially Ms. Gerson, who, like me, was up late watching the Alberta election results last night.

As much as I am a fan of Canadaland and The Line — and I really am a regular consumer of both your products — it is Mr. Elgie’s model that fascinates me. There’s such a dearth of local news coverage reporting on the news. A commentary site like The Line can’t do that in the same way. So I’m enthused to hear about your successes.

I want to ask all of you this: Can you quantify for me what the impact would be on your businesses if Google and Facebook simply stopped sharing your content and blocked people from sharing your content?

I’m still reeling from Mr. Crawley from The Globe and Mail coming in here and telling us that his company pays Google and Meta to share his content while simultaneously arguing that Google and Meta are stealing his content. What percentage of your traffic is coming from Google, Facebook and Instagram, and what would it mean if those companies simply cut off Canadians’ access to your products?

Mr. Elgie: Maybe I’ll take that first. Thank you for the question.

As I mentioned in my speech, Google and Facebook represent upward of 50% of our total traffic. Google is around 30% to 35%, and Facebook is roughly 17% as of yesterday, depending upon the market we’re talking about. If that traffic were to be lost, the business would be over. You cannot take 50% of our entire inventory away in a business that is not a high-margin business. We’re a profitable business, but the margin would not support a 50% loss in traffic.

I’m not convinced that Google would fully abandon the industry, but I do believe that Facebook is prepared to follow suit on their threat. If that is the case, we’re looking at about a 17% traffic loss, as I mentioned. It will not devastate our business — we will survive it; however, I think it will devastate other businesses, especially new digital start-ups.

Also, as I mentioned before, it will prevent the successful launch of new community sites. Facebook has always been one of the best channels for us to use to launch into a new market by promoting our content and by building a following. And yes, we pay them too; we pay them to be on their platform because of the value it brings back to us thank you.

Ms. Gerson: I will go second. Bless you, Paula Simons; I appreciate that question.

From our perspective at The Line, we’re a Substack and subscription-based model. We have consciously tried to minimize our dependence on external social media for exactly this reason. We stopped putting stuff on Facebook, because we know Facebook can take it away, so it’s not a reliable form of growth.

Anybody who has been in media for any length of time, particularly on the digital side, will know that you live or die by the algorithm, and media organizations spend significant amounts of money and entire staffers devote themselves to maximizing SEO, or search engine optimization, and spend a lot of time trying to maximize how to generate traffic from various sources. We all know that, somewhere in California, if someone switches a flip on the algorithm, all that work goes away and we have to start again. That is a consistent problem that media organizations have.

It would not devastate us. But I will make two points. When I was working on the digital side of the National Post, a shocking amount of traffic was coming, not from Facebook, Reddit or any of those places but directly to the landing page. Off the top of my head — I wouldn’t even want to guess at this point — but almost all of its major traffic was coming from the main landing page, and then someone would go somewhere else, which means that most people are choosing their media products by habit. In an environment where social media is not spreading links or news links, that gives the incumbent players an extraordinary advantage, because people will go to The Globe and Mail, National Post, Calgary Herald — all those places they already know about —

The Chair: I hate interrupting, but unfortunately, I have to. We’re well over four minutes. We have to move on.

Senator Cormier: My questions will be for Mr. Brown from Canadaland.


In a press release you issued on May 31, 2022, you identified the problematic situation that many small media start-ups would not be eligible under the bill. An amendment was adopted in the other place to ensure the eligibility of media companies that employ two journalists, one of whom may be the media owner or a partner. In your opinion, does this amendment ensure the eligibility of small media start-ups?

I’ll continue right away with my second question, which follows on from the first. The Consortium of Official Language Minority Community Media mentioned to the committee that many small media rely almost entirely on freelance journalists, which would prevent them from qualifying as eligible media under the bill’s current provisions. In your opinion, should we consider an amendment that would do a better job of taking into account the reality of small media that rely on freelance journalists?


Mr. Brown: Thank you very much for the question. It’s an excellent one. I was glad to see the amendment carry in a compromised fashion making it possible for newsrooms with two employees and eliminating the need for it to be at arm’s length. A lot of what we’re seeing in terms of innovators, entrepreneurs, risking their own money — some of them are laid-off journalists from traditional media. Some of them are husband-and-wife teams or people who are related to each other. To exclude them on that basis is ridiculous.

I’m glad to see that additional small news organizations are going to have access to this, but it’s still not good enough. If you actually look at the reality of what’s working and succeeding, there are, at this point, hundreds of success stories that get written out of the narrative of crisis and failure. The model that is working is the micro news room. Often that is one journalist who is not even necessarily full time, often employing himself or herself and freelancers.

By definition, this bill and all of the funding mechanisms exclude start-ups. Because a start-up is something you’re starting up, and all of these funding measures require you to be in operation for a number of years before you reach the point at which you have any access.

I understand there are concerns about letting the wrong players in, and we get back to the question of what real news is and what fake news is, which is a thorny question, but basing that criteria on the size of the news organization has nothing to do with the quality of the news information being published. Yes, it is a detriment to one of the great signs of hope that journalists will find ways to bring their services to the public but just not necessarily ways that fit these very specific criteria which are included in Bill C-18. Further amendments would be very welcome and would have a huge impact.

Senator Cormier: Thank you, sir.

Senator Cardozo: I’d like to just take a step back for all of us. This conversation is really very interesting and thought-provoking. Could you share with us your thoughts as you represent folks who are on the front line of online media? Where would you see Canadian media, say, 10 to 20 years from now, whether or not we pass Bill C-18? Is your type of organization the future? Will the legacy media be gone? Is there something different about your media? Could you end up with parties as big and as strong as you who really deal in misinformation and disinformation? Is that part of the battle that you’re going to be dealing with in the years ahead? Can you paint me your thoughts about the next 20 years? Maybe I’ll start with Jen Gerson and then Jesse Brown and Jeff Elgie.

Ms. Gerson: Twenty years ahead in media? No pressure. I don’t think Bill C-18 preserves the media as is, nor will it allow for an innovative and sustainable media future. Regardless of Bill C-18, you’re going to have a Canadian media market that is much more dependent on the CBC to fill in the gaps left by a collapsing private market. I think that Mr. Brown was correct in saying there’s going to be a significant future in micro news rooms, so news rooms run by one or two people. I do think that AI is going to be a player in media. For example, if this is harnessed appropriately and correctly, one or two people could run a very substantive amount of content with the help of AI generation.

Say you’re in a small town like Medicine Hat, Alberta. Your media market can’t sustain a newspaper anymore, but you’re one person or two people with journalism experience using AI to generate content based on the latest council meeting, the high school’s basketball scores, the weather. With the help of AI generative media, I think we’re very close to the area of being able to produce significant amounts of content for small communities and the reading public with relatively small numbers of people. That may be an optimistic take on all of this.

But I think pinning our hopes that there’s going to be some kind of revival — oh, and then, of course, you’re going to have large national media outlets. I don’t think The Globe and Mail is going to go anywhere, but pinning our hopes to the idea that Postmedia is the future? I don’t see that.

Senator Cardozo: Thank you.

Mr. Brown: I agree with most of what’s been said. There’s no credible path with Postmedia to seeing how they survive. There’s nothing that they’ve offered. I report on the media. They seem to be in a controlled immolation. I expect bankruptcy in the years ahead. I don’t know how Torstar comes out of this.

I do think that a model like The Globe and Mail, where billionaires are backing it and it is providing an incredible amount of high-quality journalism, is a model that could survive. But, in general, it’s a return to first principles. It’s subscription models. To return to Senator Simon’s question, it is those of us who are not reliant on big tech and who are not building a house on a shaky foundation, on an algorithm that we don’t control. Newsletters and podcasts where audiences are directly supporting the news business and where there isn’t an intermediary is going to be a big part of it, and I think it will be about a predominance of subscriptions over advertising, which is very vulnerable to economic terms.

I think the CBC will have a fundamental role in it, but it’s crucial that we take them out of competition where they’re actively trying to destroy other news organizations. Instead, I know that Jeff Elgie has proposed something which has been proposed for many years, which is that the CBC’s content should be available to other publishers under Creative Commons licensing, so others can use this publicly funded media to help us build our news products. And they should be taken out of the competitive advertising landscape entirely.

Senator Cardozo: Before I’m cut off, Jeff Elgie, your quick comment?

Mr. Elgie: Thank you. From where I sit right now, we see what the future of news looks like. In some of our communities, you see where upward of 40% of all adults in the community visit us daily or multiple times a day. You see a rebirth or a rebuild of what used to be a daily newspaper model where people come not only for news, but they come for classifieds, weather, events, obituaries and more.

But it’s a difficult business. With all respect to my counterparts and my colleagues in a print business, we have the advantage of being born digital, as I always say. That’s all we think about. That’s all we do. We think about that with respect to the audience. We think about that with respect to our product, how we develop our commercial products and train our sales teams, et cetera.

It’s tough work. It’s been 10 years of very tough work, but it is a profitable model. In most of our communities, we employ more journalists than our daily or weekly newspaper counterparts, and it gets better and better as we get better at what we do. I think there is a strong future in a digital model, but it’s going to take time for some print publishers to transform and for other new publishers to come in and take their places, in some cases.

Senator Cardozo: Thank you for that.

Senator Harder: My question is for Jeff Elgie. Some of your co-panelists have raised questions about self-censorship in the event that Google funding has that influence. You, yourself, take Google funding. Are you experiencing or practising self-censorship?

Mr. Elgie: Thank you, senator. For us, it’s not really at all relevant. That’s simply because we don’t cover on a day-to-day basis what Google or Facebook is doing. Our news is highly focused on local communities, so it would have zero influence over our editors or our reporters.

Senator Harder: I have an unrelated follow-up question, Mr. Elgie. Your business model often goes into communities where local media has collapsed or gone bankrupt or out of business. That clearly has given you the opportunity, in Guelph, for a recent example, to expand your business. Given your lack of enthusiasm for this bill, is it safe to say that your business model depends on further small-town media collapsing, which would be guaranteed by delaying this legislation?

Mr. Elgie: I apologize, senator. Could you repeat the question, please?

Senator Harder: [Technical difficulties] basically works especially in communities where small-town newspapers have gone down. I’m thinking of the Guelph Mercury, for example. Your expansion ambitions depend upon, in some respects, small-town newspapers continuing to go out of business.

Bill C-18 could slow that process down. Is that why you are opposed to Bill C-18 — because, in fact, your business model depends on the continued collapse of small-town newspapers?

Mr. Elgie: Thank you for the question.

I want to be clear that we don’t celebrate the collapse of daily newspapers and the loss of journalism jobs, but the fact is that it is a reality. When a daily newspaper closes, those tend to become our best markets. Guelph is an example, as are Orillia and Barrie. That is because there’s a void there and a habit is left in its place.

The problem with Bill C-18, outside of the transparency concerns I have, is that if Facebook were to pull from the environment, that is one of the strongest tactics we have used in the past to inform a community that we are there. It’s highly efficient and related to the habits of a local news consumer. So in terms of us pausing new market launches, that is a substantial kind of part of our playbook in terms of how we operate. Until we see what happens and until we think that through, it does give us pause.

Senator Dasko: My first question is for Mr. Brown.

Regarding your analysis of declining trust, as a pollster for over 30 years, I’ve seen that trust in many institutions has gone down, not just the media. I would partly attribute that to the fact that deference to all authority has declined, so I think there’s another analysis there. But that’s a topic for another day.

However, corporate influence can be a problem, whether or not it is related to declining trust, so I pick up your comments at that point. I want to ask you what you think the impact would be if Meta and Google, especially, were to exit this marketplace. Meta sounds serious about leaving. I want to ask you what your opinion is. Would that impact you? How would that impact your organization? What are your thoughts about whether that’s a good thing?

Mr. Brown: We have to recognize the reality that Meta has already all but exited news distribution. Google got a lot of bad headlines because they turned off the news for some percentage of Canadians and didn’t tell anybody until a journalist discovered it; it was a journalist who discovered that. But Meta has been tightening the spigot so that, of the thousands of people who have asked for Canadaland content — it used to be that we published content, and the people who asked for it, got it. That number of our own audience we were able to reach through Facebook has gotten smaller and smaller, and if we want to reach them all, we have to pay to reach our own audience, which is what Mr. Crawley was referring to earlier.

We’re at a point where if they were to completely get out of the news business, it would have almost no impact on Canadaland. I would submit that the reliance that news publishers have with big tech — and I appreciate that many do have a great reliance on Facebook — it has been a disastrous relationship. There are things that could improve — I think antitrust measures could have an impact that’s positive. But I also think that anybody who is building a news organization from the ground up would be foolish to base their business plan on a single platform, such as TikTok or Facebook, because you have no control. You have to go directly to your audience if you want to actually reach them.

Google is another question. It’s almost unthinkable that Canada would be one of the only countries in the world where a search for an answer to a question or for information on a subject and the results that come up do not include news information. I’m not aware of any other Western country where that’s the case. We’ll find out if they mean it.

Again, whereas Jen Gerson was deliberate in building up her audience via newsletter, we kind of stumbled into it through podcasts. It’s an open platform, and anybody with any form of podcast app can directly access Canadaland, so our traffic is not dependent on either.

I do think we have to take seriously what the tech companies are telling us, but the very fact that we’re in this position of being threatened — rather than the kind of sabre-rattling and chest puffing that we won’t be threatened, I think we have to ask ourselves this: How is it that we’re in a position where the threats of these private foreign companies are so impactful, and why are we so beholden to and dependent upon them? Is that really a dependency that we want to enshrine in amber forever, especially given that this is a vastly shifting landscape with new technologies all the time?

Senator Dasko: Thank you. What about the viability of other search platforms to take the place of Google? Is that viable, or is that —

The Chair: You have 30 seconds.

Mr. Brown: I never like to take a position that it must be and can only be Google, but Bing isn’t really a thing. We’ve had DuckDuckGo and search engines that don’t track us. We have other options that are pretty good. I think antitrust is the answer, because they have locked down that market and built a big moat around it, and now we are beholden to them for information. I think we have to look at antitrust solutions to that problem.

Senator Dasko: I guess I’m out of time.

Senator Clement: Good morning, and thank you all for being here.

I want to continue with Mr. Brown. Your points about antitrust are well taken, but I want to ask about this threat made by the bigger platforms and the risk to you.

Can they really go through with those threats and not lose big time? They benefit from traffic and clicking to different news media, because by clicking, they’re giving those big platforms information that they can then use to monetize. So I sometimes wonder about their threats.

My second question to you is around amendments. What would be the most urgent of the amendments you’ve outlined? You’ve talked about the percentage of editorial expenditure being the same for everyone. You’ve talked about a code of ethics. What is the most compelling amendment you’re suggesting?

Mr. Brown: It would be the fair universal funding formula, which also doubles as a transparency mechanism. It’s the one you just cited and the one I used my time to speak of.

It would eliminate the secret backroom deals that would be beneficial regarding declining trust. Simply put, if a news organization qualifies for funding from these platforms, they get a prescribed amount of funding based on their editorial expenditures, and that’s it. That frees us to cover them as we will and not be afraid of whether they like us or not for doing so.

When it comes to whether these threats are serious, I can share my opinion. I take them seriously, because I think that whatever losses Google and Facebook might suffer financially from turning off the news in Canada, they’re facing similar legislative efforts all around the world. I take the possibility that they might make an example out of Canada to show other countries what happens when they are interfered with seriously. I don’t claim to know, ultimately, whether they would go through with it, but I don’t consider it a ludicrous idea.

Senator Clement: Thank you.

The Chair: Thank you, colleagues. There are exactly two minutes left, so if there’s anything outstanding that you would like to express to the committee, now is the time to do it before we adjourn. Very briefly, I will give all three of you this last opportunity. Mr. Brown, go ahead; then Ms. Gerson and Mr. Elgie.

Mr. Brown: I’ll try to keep it very short.

Of all the threats, the one that impacted us the most so far has been government intervention. We’ve been doing just fine, and now we’re trying to navigate a shifting playing field that has put us at a disadvantage that is coming to us because of policies, not because of market realities. My plea to you is “first, do no harm” or lessen the harm to make the fairest bill possible. We’ve put forth tangible and practical amendments that would have a tremendous beneficial impact, and I urge you to take a serious look at them. Please, transparency first.

Ms. Gerson: My plea would be to first take care of your own house. The federal government already has an extraordinary disproportionate role in the media market through the CBC. If you have concerns about people being informed, having trust — all of these issues — communities being well served by journalism — the CBC is the correct mechanism by which to address that before we create an entirely new system. So I think creating Bill C-18 and the absence of being willing to actually do a serious mandate review for the CBC is absolute folly.

The Chair: Thank you.

Mr. Elgie: Thank you. Today, on this panel, you heard from me and Mr. Brown, and on the previous panel, you heard from Mr. Myles and Mr. Deegan, representing News Media Canada. I don’t believe that any of us disagree that journalism expenditure and a formula based on that is the right answer. It solves for concern across the industry. It solves for trust, as Jesse pointed out. We are not asking for secret information about companies. We are just asking to apply a universal funding formula when this is calculated. I think that is the best solution for an amendment to this bill.

Thank you for having me today.

The Chair: I would like to thank all of our guests for your testimony and answers today. It is always special when parliamentarians can ask questions of journalists rather than the other way around. Thank you for your contributions.

(The committee adjourned.)

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