Online News Bill
Second Reading--Debate Continued
March 9, 2023
Honourable senators, I rise today to speak to Bill C-18, the online news act, at second reading. I take a great interest in this bill. I have loved newspapers from an early age. I grew up with the Winnipeg Free Press, which has just turned 150 years old, and I added a whole set of papers to my must-read list in later years. During my career in the public opinion business, I had the pleasure of working with The Globe and Mail to lead their first-ever public opinion polling program. As well, later, I led many years of polling assignments for the CBC. So I learned a few things about journalism and the media business along the way.
Now, as we turn to Bill C-18, we learn that the news media business is in trouble and that the government has come to fix it. The rationale behind Bill C-18 is that news organizations are not getting fair compensation for the news they produce from the digital platforms that distribute this news to the public. Thus, Bill C-18 would require that major digital platforms make deals with news businesses to pay them for information that is shared on their platforms. The news businesses involved include online news outlets, newspapers and news magazines, public and private broadcasters and local businesses that publish original online news content.
Although no platforms are mentioned specifically, it appears that Google and Facebook would be the eligible platforms according to the criteria laid out. If voluntary deals are made between platforms and news media within certain timelines that meet certain criteria, digital platforms would be exempted from the required portion of the act, which is to enter into a formal negotiation process that could lead to final offer arbitration. The CRTC will take the role in developing a code of conduct to guide the bargaining process and determine if the agreements that are reached meet the conditions for exemption, among other roles that it will have.
This is a complex bill. After sifting through government documents, reading media clippings and talking to stakeholders, I can best analyze it by dividing it into two parts: the parts that make sense to me and the parts that leave me with a whole lot of questions. Much of the stated context and background makes sense. Two assumptions are especially relevant. First, news media are an essential component in a democracy and, second, technological change has changed the way that news is consumed and distributed in this country, which has left Canadian news media in a vulnerable state.
Democracy depends on free and fair elections, an independent judiciary, the rule of law and a free and independent media. With democracies around the world under threat, I think we have to be more vigilant than ever about our democratic institutions. A free and independent media is vital to inform, investigate, analyze and engage Canadians in the public space. The second assumption is a familiar one: that digital technology has changed the media in this country forever.
Let’s start with advertising. A 2021 Statistics Canada report surveying newspaper publishers in Canada revealed that the operating revenue of Canadian newspaper publishers declined to $2.1 billion in 2020 — down a full 22% just from 2018. Declines in revenues have inevitably led to closures and job losses. Over 469 news outlets have closed from 2008 to 2022 — including over 300 community newspapers — and one third of journalism jobs have disappeared since 2010.
The other side of this picture is that the internet has increased its share of advertising revenue as that of newspapers and other media has declined. In 2005, the internet held only about 8% of the market share of all advertising revenue in Canada. By 2015, the internet share was 37% while all other categories had dropped, especially daily newspapers, which fell from 26% to a 12% share in 2015.
Government background documents estimate that Google and Facebook revenue from digital advertising was $9.7 billion in Canada in 2021, which was 80% of the total digital ad revenue of about $12 billion.
It’s no mystery as to why advertising has shifted to internet platforms. That’s where the consumers have gone to find, read and share news. The online environment today includes a vast array of choices, including new media, traditional media and social media.
When it comes to consumers, it’s important to understand that Canadians are still very interested in news and have not abandoned traditional news sources even as they have gone online to get this information. According to a Maru survey conducted last year, 86% of Canadians access news every day. According to a Reuters survey of 46 countries, 77% of Canadians used the internet in the last week as a source of news. In this study, the top sources for news are essentially the same whether consumers are online or offline. For English media in Canada, the top sources are CTV, CBC and Global News. For French media, they are TVA and Radio-Canada. Still, the study shows that while 56% of Canadians watch actual television news during the week, only 16% read an actual print newspaper.
With regard to consumer behaviour, a 2022 Abacus survey of Canadians commissioned by Google shows that 64% of Canadians say they use Google to find and access news at least a few times a week, and 41% use Google daily for news. This finding strengthens the case for the importance of platforms as a source of news for Canadians.
Now, as an aside, I wish that the government had included more in-depth analysis of consumer behaviour in its development of the bill, but I will leave that topic for another day.
I think a strong case can be made that Canadian media need assistance to carry out important democratic functions that have been weakened by years of revenue losses. I feel that a public policy response is justified for this reason. However, this is where my questions about Bill C-18 begin.
Let’s start with the choice of this policy framework. I want to know more about why the government has chosen this particular response rather than modifying or developing existing policy tools which are more familiar to this industry. Creating a fund to assist organizations, for example, like the Canada Media Fund, would have been more straightforward. Instead, the profitable platforms will be required to compensate the news sources directly through a very unfamiliar process.
Other questions are raised with respect to the eligibility of news businesses. Our colleagues in the other place, through amendment, have greatly expanded the number of media organizations that will be eligible to participate in this policy from about 200 to more than 650. It’s a positive development to include smaller and more diverse organizations, but this also raises questions. Will all of these organizations practise real journalism with true news content and journalistic practices? What body will investigate this, if at all?
It also appears that organizations will not need online content to be eligible. If this is the case, how can digital platforms benefit from their content for purposes of payment? That’s the purpose of the bill in the first place. Also, if we’re tripling the number of organizations, will this mean less support for everyone in the end or will the platforms have to pony up more dollars?
Another question relates to the basis of negotiation between the parties, that is, between the platforms and media organizations. What are the considerations? The government has relied strongly on the concept of fair remuneration. It wants to ensure that major digital platforms fairly compensate news publishers for their content and enhance fairness in the Canadian digital news marketplace, backstopped by the Canadian Radio‑television and Telecommunications Commission, or CRTC, and arbitration.
The term “fairness” is used repeatedly in its communications, but what does this mean? We know that news organizations themselves receive significant value from the distribution of their content, so how, if at all, does this figure into it? In the end, is remuneration based only on measures of the media organization and, if so, which ones? The volume of its online content? The size of its online audience? A percentage of its expenditure on news content? It has been suggested 20%. Another suggestion is 30% to 35%. Is remuneration based on platform measures such as the volume of online activity of the organization on the platform or on the revenues of the platform? I think we need a greater understanding of this process since it directly affects outcomes and the achievement of policy goals.
I have further questions about the feasibility of negotiations. How will small regional newspapers hold their own in the high stakes bargaining that will take place under Bill C-18? In the end, will the big legacy companies come out the winners at the expense of others?
Colleagues, there is more. The platforms are supposed to:
. . . ensure that an appropriate portion of the compensation will be used by the news businesses to support the production of . . . news content.
I want to understand how this is supposed to be implemented.
Many other questions are relevant, but, in the end, I would ask whether this policy initiative will be the saviour of this industry. I hope that we can find some answers to these and other questions at committee.
There are many good elements of Bill C-18. It enjoys the support of stakeholders across the media industries, including many large and small newspapers, broadcasters and more. I also see support from the Canadian public for some of the principles of this bill.
For example, a poll conducted last year by Pollara for News Media Canada shows that 79% of Canadians agree that Google and Facebook should have to share some of the revenue they generate from Canadian news content with the Canadian media outlets that produce the stories.
On the topic of polls, that Abacus Data poll conducted for Google, which I mentioned earlier, shows that two thirds of Canadians don’t want Google Search to change the way it operates when Bill C-18 comes into effect. Yet, we have just seen Google two weeks ago blocking news content in a test run related to this bill. This company is doing exactly the opposite of what Canadians want, according to the company’s own polling.
Colleagues, there is never a dull moment working on these files, and never a dull moment on our Senate Transport and Communications Committee. Clearly, there are many important issues and questions which need examination with respect to Bill C-18. I look forward to the several weeks of study and debate at committee and here in our chamber where Bill C-18 will receive the sober second thought it so clearly needs.
Thank you, merci.
Honourable senators, the debate around Bill C-18, the online news act, pivoted on February 22. That day, Google confirmed that they were conducting tests to “limit the visibility of Canadian and international news to varying degrees.”
In response to questions about its actions, Google assured us that less than 4% of Canadian users will be impacted by this random testing. Given that an estimated 92% of Canadians use Google and the average user conducts three to four searches a day, Google’s assurance — or threat — implies that over 1 million Canadians have or will have reduced access to Canadian news several times per day for the duration of this test. Which million Canadians, I wonder.
I can’t figure out why Google did this. Second reading debate had just begun. Concern about the effectiveness of this legislation was raised in the earliest speeches. Rather than constructively contributing to the debate, Google fired a shot across the bow of Canada’s legislative process and, I would argue, our sovereignty. If this is how Google negotiates with a G7 country, I can only imagine how they negotiate with our diminishing and steadily weakening news outlets. At the very least, Google just demonstrated that under Canada’s existing legislation and regulations it is free to manipulate what Canadians see when they use Google to access information and news. But, of course, they are. That’s true for all algorithm-based services.
Quite recently in this chamber, a colleague argued that:
Algorithms, as they’re being used by platforms, are a form of computation. What algorithms do is they follow our habits, and they push up — on their algorithm system — what we want to see.
Google just invalidated that assertion, quite effectively. Canadians, like all other users of these big tech platforms, see the content that the platforms want us to see. To think that the visibility of content is not throttled up or down, or substituted, based on how profitable that content is to the platform would be naive. These platforms are doing exactly what they should be doing for their shareholders — they are maximizing the value of their assets. These are commercial entities, not public services. Their job is not to serve the public. Their job is to provide a service that is valued by the public and then extract as much revenue as possible from it. These platforms are doing their job.
Now, our job, on the other hand, is to make sure that the public well-being and utility are maximized and to minimize any resulting individual or collective harms.
Google just showcased why a piecemeal approach to preventing harm and creating opportunity in the digital era is not sufficient. Google showcased why a whole-of-government approach is urgently needed if Canadians are to thrive in the digital era. Our structural legislation, like privacy and competition law, and countless regulations and policies across government were designed in and for the analogue world. They are no longer fit for purpose as the world races ahead in the digital era.
In the absence of these structural changes, Bill C-18 is an imperfect solution, but it may help in the short- to medium-term, akin to providing a pair of crutches to someone who has a broken leg. The job is not done until the leg is reset in a cast and can heal.
I’m leaning towards supporting Bill C-18 as a useful short-term measure that may slow the collapse and, perhaps, even plateau the viability of news media in Canada, but I’m not convinced that it offers anything close to a permanent solution where journalism can thrive once again.
To make my point as to why Bill C-18 on its own is likely not sufficient, I decided to explore competition in the digital era. Let’s consider the concept of “abuse of dominance.” This is when a dominant business engages in an activity that stops or substantially reduces competition in a given market. It can be predatory in nature, designed to create short-term losses or harms; exclusionary, designed to prevent a competitor from operating in a market; or disciplinary, designed to punish a competitor. Abuse of dominance is but one example of anti‑competitive behaviour.
Just over a year ago, Innovation, Science and Economic Development Canada — ISED — released a report summarizing the strategies and tactics that are increasingly utilized by data‑intensive tech platforms in order to obtain and maintain dominance. It’s called Study of Competition Issues in Data‑Driven Markets in Canada.
Specifically the authors examined how data-intensive tech platforms obtain, control and then leverage data to increase profits and protect against competition. The report took a case‑study approach to consider whether specific digital business behaviours are sufficiently captured under Canada’s Competition Act.
The short answer was, “No, they are not.” That is why the Budget 2022 commitment to modernize the Competition Act is so important, as is ISED’s ongoing public consultation on competition policy reform.
The nine behaviours examined by the report included concepts like “gatekeeping,” where a platform decides what users see or do not see on their platforms — this is what Google is doing right now — or “self-preferencing,” where a platform prioritizes its own content or products over that of others on the platform, or “copycatting,” where a platform uses data under their control to identify content or products that it might want to mimic.
Let’s take a closer look at gatekeeping by platforms. As it stands today, platforms are free to engage in gatekeeping that disadvantages or exploits third-party users. Google just demonstrated that as the gatekeeper. It can throttle up or down the visibility of content. If, as Bill C-18 proposes, a platform is required to pay a news media platform a fee every time a specific content is viewed, Google just demonstrated that they can — and perhaps intend to — limit the extent to which that content is viewed. Of course they can. Consider the fact that businesses that want to reach more of their followers already have the opportunity to pay Facebook for the right to do so. How does this happen?
Let’s say a news outlet has 100,000 followers, but their posts are only being viewed by a maximum of 800 of those followers. They begin to receive notifications from Facebook offering them the opportunity to pay a specific amount to achieve a given number of additional views. My question is this: Given that digital platforms can throttle access to content either up or down, why would we continue to allow them to gatekeep accurate, factual news content in the first place?
In retrospect, it is easy to see why in 2020 the Australian government directed the Australian Competition and Consumer Commission, the ACCC, to investigate markets affected by the supply of digital platform services and, importantly, required the ACCC to report back every six months for the next three years. They are taking this issue very seriously.
The Australian Digital Platforms Inquiry found that Google’s and Facebook’s market dominance had distorted the ability of news businesses to compete, and that was the premise of building Australia’s code.
Australia’s strategic use of the ACCC — their version of our Competition Bureau — is a great lesson for Canada. They use it to engage deeply in many issues central to their economy, society and democracy. They do their homework.
Conversely, Canadian Heritage consulted with the Competition Bureau but focused only on the bureau’s inquiry into the alleged anti-competitive conduct of Google between 2013 and 2016. A much broader, deeper and ongoing consultative approach would have been very helpful, especially considering Google’s most recent actions.
I truly hope that the Standing Senate Committee on Transport and Communications will invite experts in competition law to testify in the study of Bill C-18, particularly competition law as it is applied in digital markets.
I also wondered how Bill C-18 might impact the scrappy online news outlets that have been growing. What pro- or anti-competitive effects might Bill C-18 have on those news outlets that have carved out economically viable models, despite the odds?
I looked at allNovaScotia, a subscription-based online business and political news outlet with a hard paywall. That means they do not share any of their information on social media. They’ve grown over 20 years and now operate in four provinces. Bill C-18 will not help them and it could bring them harm, because none of their news stories are shared beyond their subscribers.
How about BetaKit or The Logic? Different risks and realities face these two entities, but both have been growing as traditional news outlets have been shrinking. There are many lessons to be learned here. How about Canadaland with its podcast-only format?
Understanding how Bill C-18 will affect these innovative, growing online news outlets will, in my opinion, be crucial to the committee’s study. My questions include the following: What are the unintended consequences of Bill C-18 as it related to these innovators? Does the government commit to extend the journalism labour tax credits, even with the passage of Bill C-18? Are the qualifying criteria for Bill C-18 and the journalism labour tax credits sufficiently inclusive to encourage innovative news outlets that serve a diversity of communities?
Let me drill into this last point. If the criteria for an eligible news outlet are looked at through the traditional news lens, most emerging news outlets risk being disqualified. For example, supported news must be of general interest and about current events. Traditional media cover everything from sports to weather. Online outlets ignore that news because it can be sourced more easily elsewhere. This requirement could cause an online news outlet to water down the quality and depth of reporting in our complex world so that they can become more general interest and qualify for the support.
How about the fact that industry-specific news is not supported? Some argue that technology news is industry specific, despite the fact that technology permeates every aspect of our lives across every public and business sector, even the news sector. A traditional news media lens could potentially deem many innovative, independent, original content news outlets ineligible.
Additionally, unlike traditional media, online news outlets attract audiences that are dispersed across the country. They are not limited to a specific major urban area, often despite being based in one.
As I conclude, I will peer over the horizon — or try to, at least — past the harm already done to see what we might do to prevent future harms and even unlock more opportunities for Canadians.
Last November, OpenAI launched a generative AI platform called ChatGPT. In its first three months, ChatGPT became the fastest-growing consumer app in history, acquiring over 100 million users. Why?
Generative AI is a big deal because generative AI can create its own outputs. Until now, humans pretty much had that market cornered — the market of creating. That world is no longer. Increasingly, we will find that AI can also generate content, only much, much faster than we humans.
How does this relate to Bill C-18? To find out, I asked ChatGPT if generative artificial intelligence, or AI, could be used to create news stories. I instantly received a clearly written response that confirmed that it can create a news story, but was cautioned that the story will only be as good as the data that ChatGPT is trained upon — that biased or inaccurate data will generate stories that are also biased or inaccurate.
As a side note, I will go a bit further. AI can scale inequity and misinformation at warp speed.
ChatGPT also provided a bit of advice: It is important to inform readers that AI was used to create the story.
Given technology advancements that have just emerged in the last three months, it is now easy to see a future where general news content is repackaged into news stories at virtually no cost to large technology platforms. How might this impact our democracy? I hope that the committee will consider whether Bill C-18 is future-proof in any way, including how we might prevent chat bots like ChatGPT from further eroding the remunerability of quality journalism and whether Bill C-18 will create a sustainable, pro-competitive environment for journalism in Canada.
As the committee does its work, I ask members to remember how Google chose to negotiate with a G7 country. Their actions suggest that you might want to understand whether witnesses before the committee are constrained because they are under a confidentiality agreement, conflicted because they have already negotiated a deal or are testifying under pressure or fear that their posts or information will be throttled up or down based upon their testimony.
Whether Bill C-18 is passed in its current or amended form, I continue to wonder if it is capable of moving fast enough to save Canada’s remaining legacy news outlets. The bill’s timeline would still enable digital platforms to slow walk the process for eight months after coming into force. I do wonder whether any resulting funds will actually go to support journalists and journalism.
Colleagues, the Washington Post’s simple refrain that “Democracy Dies in Darkness” needs to be top of mind in the examination of Bill C-18. The catastrophic collapse of journalism and print media is undermining access to accurate information and insights in Canada.
That is the problem: Financially unsustainable media ultimately puts our democracy at risk.
Is Bill C-18 at least part of an appropriate response? I think so. Will Bill C-18 help to minimize future harm while we search for more sustainable solutions? I hope so.
I very much look forward to tracking the work of the committee. Thank you, colleagues.
