Bill C-18

Online News Act

An Act respecting online communications platforms that make news content available to persons in Canada

This enactment regulates digital news intermediaries to enhance fairness in the Canadian digital news marketplace and contribute to its sustainability. It establishes a framework through which digital news intermediary operators and news businesses may enter into agreements respecting news content that is made available by digital news intermediaries. The framework takes into account principles of freedom of expression and journalistic independence.
The enactment, among other things,
(a) applies in respect of a digital news intermediary if, having regard to specific factors, there is a significant bargaining power imbalance between its operator and news businesses;
(b) authorizes the Governor in Council to make regulations respecting those factors;
(c) specifies that the enactment does not apply in respect of “broadcasting” by digital news intermediaries that are “broadcasting undertakings” as those terms are defined in the Broadcasting Act or in respect of telecommunications service providers as defined in the Telecommunications Act ;
(d) requires the Canadian Radio-television and Telecommunications Commission (the “Commission”) to maintain a list of digital news intermediaries in respect of which the enactment applies;
(e) requires the Commission to exempt a digital news intermediary from the application of the enactment if its operator has entered into agreements with news businesses and the Commission is of the opinion that the agreements satisfy certain criteria;
(f) authorizes the Governor in Council to make regulations respecting how the Commission is to interpret those criteria and setting out additional conditions with respect to the eligibility of a digital news intermediary for an exemption;
(g) establishes a bargaining process in respect of matters related to the making available of certain news content by digital news intermediaries;
(h) establishes eligibility criteria and a designation process for news businesses that wish to participate in the bargaining process;
(i) requires the Commission to establish a code of conduct respecting bargaining in relation to news content;
(j) prohibits digital news intermediary operators from acting, in the course of making available certain news content, in ways that discriminate unjustly, that give undue or unreasonable preference or that subject certain news businesses to an undue or unreasonable disadvantage;
(k) allows certain news businesses to make complaints to the Commission in relation to that prohibition;
(l) authorizes the Commission to require the provision of information for the purpose of exercising its powers and performing its duties and functions under the enactment;
(m) requires the Canadian Broadcasting Corporation to provide the Commission with an annual report if the Corporation is a party to an agreement with an operator;
(n) establishes a framework respecting the provision of information to the responsible Minister, the Chief Statistician of Canada and the Commissioner of Competition, while permitting an individual or entity to designate certain information that they submit to the Commission as confidential;
(o) authorizes the Commission to impose, for contraventions of the enactment, administrative monetary penalties on certain individuals and entities and conditions on the participation of news businesses in the bargaining process;
(p) establishes a mechanism for the recovery, from digital news intermediary operators, of certain costs related to the administration of the enactment; and
(q) requires the Commission to have an independent auditor prepare a report annually in respect of the impact of the enactment on the Canadian digital news marketplace.
Finally, the enactment makes related amendments to other Acts.

[The Chair, Liberal, Hedy Fry]

I call this meeting to order.

Good morning, everyone.

Welcome to meeting No. 103 of the House of Commons Standing Committee on Canadian Heritage.

I would like to acknowledge that this meeting is taking place on the unceded traditional territory of the Algonquin Anishinaabe people.

While public health authorities and the Board of Internal Economy no longer require mask-wearing indoors or on the precinct, masks and respirators are still excellent tools to prevent the spread of COVID-19 and other respiratory diseases. Their use is strongly encouraged, because these diseases are on the rise now.

I want to take this opportunity to remind all participants about some simple housekeeping.

You're not allowed to take screenshots of the proceedings, because it will be out there on the web later on.

This room is equipped with a powerful audio system. When you are speaking, it's really important that you not have other devices around to cause feedback. When you finish speaking, just press and turn off the mic. When you turn it on, be really careful that you're not echoing in the room, because it really affects the ears of the interpreters.

Finally, I want to remind everyone that questions go through the chair. This goes for the committee members as well.

Also, I will give you a 30-second heads-up when your time is up, so you will need to start thinking about how you will end your sentence.

I will also remind you that the way we speak to each other is really important. At committee and in parliamentary proceedings, it's important for us to be respectful of each other. We can differ, absolutely. That's what most of these meetings are about—differing and being argumentative with each other, etc. However, let's try to do this with a certain amount of decorum.

I want to thank the witnesses for coming today.

As you know, we're doing a study on the tech giants. This has been a real problem for us after the passage of Bill C-18.

As individuals, we have Peter Menzies and Pierre Trudel, who is a professor in the public law research centre at the Université de Montréal law school. We have the American Economic Liberties Project, Dr. Erik Peinert, research manager. We have the Center for Journalism and Liberty, Open Markets Institute, Dr. Courtney Radsch, director.

The Hub is in your notes, but they're not coming today. They are going to come another day.

Lastly, we have, from Unifor, Marc Hollin, national representative, and Julie Kotsis, media representative, national executive board.

I will begin.

You will all have five minutes to present. I will give you that 30-second shout-out so you can wrap it up. If you don't get to finish your presentation, remember that you can get your little bits in during the Q and A period.

Now, the five minutes is per organization, not per person, so if you're sharing your time in your organization, remember that you have only five minutes.

I'll begin with Peter Menzies and Pierre Trudel.

Peter Menzies is an individual and then Pierre Trudel is another individual.

Peter Menzies, please begin, for five minutes.

[Dr. Erik Peinert]

Hello. My name is Erik Peinert. I am the research manager at the American Economic Liberties Project, a Washington, D.C.-based policy and advocacy organization focused on reducing concentrated economic power to broaden opportunity for small businesses, workers and communities. I earned a Ph.D. from Brown University, where my research focused on competition, monopoly and antitrust and has been published in leading academic journals.

Thank you for the opportunity to speak today about big tech’s pattern of coercion in response to regulation, specifically Meta’s recent action to block Canadian access to news articles across its platforms in retaliation for the passage of Bill C-18, the Online News Act. This follows a nearly identical action in 2021 by Meta—then Facebook—to extract concessions from Australia with respect to its news media bargaining code.

This discussion comes at a time when the news industry across the globe is in peril. It’s an industry that I’ve watched closely since I was a child. I was raised by a journalist. My mother began her career as a reporter for a local paper in rural New England in the late 1970s, moving to various editorial roles in minor cities, to the newsroom at The Boston Globe, and then to executive positions at The Boston Globe and GateHouse Media, now Gannett. She now owns several successful, independent local papers in Massachusetts suburbs.

My personal and professional experiences lead me to make two principal points today, the first being about the platforms' business model in this market. Media companies pay to produce and distribute content that a large mass of readers find valuable. Then they sell ads to businesses that want their offerings in front of those readers. On one side, Meta and Google have become the central way that readers access news media, giving them power over journalism outlets, with an implicit threat to cut off readership. On the other side, Meta and Google also have an effective duopoly over digital advertising, and both face or faced antitrust lawsuits for illegal monopolization in this space.

These companies are not providing viewership so much as using their dual control over Internet traffic and advertising to monetize content that journalists produce at considerable expense. Recent research by economists at the University of Zurich indicates that 40% of Google’s total revenue from search advertising would go to publishers and other journalism outlets if it faced more competition. With media companies paying to produce the content and big tech getting the ad revenue, this destroys the model of journalism that a democracy needs.

Google’s decision to broker a deal with the Canadian government last week, to pay about $100 million Canadian per year to journalism outlets and publishers, simply confirms this. It acknowledges the value the platforms gain from journalism. The dispute was over the scale of payments and the terms of negotiation—whether to have one deal or require multiple bargaining groups—rather than whether compensation was owed at all.

This brings me to my second point: why these companies respond to regulatory proposals with bullying, threats and coercion. Rather than making rational business decisions in response to regulatory changes—as Meta claims it is doing with respect to Bill C-18—they see oversight and market governance as an existential threat to their predatory business models, and they react with hostility.

For example, these tech giants have been leveraging trade and investment frameworks to stop governments around the world from regulating them. Their latest strategy is pressuring governments to include digital trade clauses in bilateral and multilateral trade agreements. In this way, big tech companies are better positioned to argue that policies like the Online News Act are violations of trade law because they unfairly discriminate against companies like Google and Meta by virtue of their American origin, ignoring that these companies are targeted due to their size and not their place of incorporation.

This is also even though, as American, multinational companies, their home country is considering many of the same or similar policies, with the journalism competition and preservation act being repeatedly introduced in the American Congress. They succeeded, to a degree, by getting the North American governments to include expansive digital trade clauses in the 2020 CUSMA. U.S. industry associations are already making use of this language to claim that the Online News Act violates Canada’s commitments under the CUSMA.

More egregiously, Meta last week filed a lawsuit against the American Federal Trade Commission, one of its primary regulators, arguing that the commission itself is unconstitutional and, thus, effectively illegal as a regulator, rather than face an amended consent decree based on privacy violations that the company has repeatedly committed over the past decade, which the FTC has found involved children’s data.

Adding little of clear social value but having learned to profit from it nonetheless, Meta repeatedly shows disdain for the rule of law in this space, preferring to destroy the legal system in the United States and elsewhere rather than come up with a business model that is both profitable and socially beneficial.

Having seen the continually worsening struggles of the news industry over the course of my life, I applaud the Canadian government for passing the Online News Act. We hope to see similar policies passed in the United States.

Thank you.

[Isabelle Mondou]

I will answer the second question. The work is very advanced on the bill, which was designed based on the consultation, the advisory committee and all the work that Minister Rodriguez led across the country on the consultation. I think the committee will be sad if I don't turn at least once to Owen for a question on Bill C-18, so I will do that.

[Isabelle Mondou]

I think it's a very important message. They should not be forgotten.

You may know that in the department one of the things we've founded is the Indigenous Screen Office. It is giving indigenous people the capacity to do, under their own sovereignty, movies and productions of their own. I think you're raising a very important point, and I think Bill C-18 is putting the rules in place to make sure their voices are not forgotten.

[Isabelle Mondou]

Madam Chair, I have two answers to that.

The first one on Bill C-18 is that, as the minister said, indigenous newspapers, print and radio will be included, and they will be at the table. They have already engaged.

The point you've raised is very important. They're trying to make sure that everybody in Canada knows about it and that no small community is forgotten. The outreach is going to be very important, and there will be a call when the legislation comes into force to make sure that people can raise their hands.

I also want to mention another program to you. We have in Canadian Heritage a broadcasting program for the north. If you want to put me in contact with those organizations, I will be happy to follow up with them.

[Rachael Thomas, Conservative, Lethbridge, AB]

I understand your good intentions. Unfortunately, they're misplaced. Those local media outlets will receive very little and possibly nothing at all.

This bill has killed them. Big tech has colluded with big government to do away with news in this country. There will be less choice for Canadians and less access for Canadians. It's a shame.

Let's not forget the fact that, actually, Google isn't signing on to Bill C-18. It's actually been granted an exemption.

Minister, when you celebrate the success of Bill C-18, let's look at this. Facebook walked away. It's not carrying news anymore, so it's not under Bill C-18. Google is the second one the bill applied to. It applied for an exemption. You entered into a backroom deal with Google, and it got what it wanted. Bill C-18 technically applies to no one. It's an absolute failure. It's a boondoggle, Minister. Let's be really clear about the facts here.

My next question is with regard to Laith Marouf, who received $130,000 from the heritage department. He used that money to perpetuate vile comments towards the Jewish community and towards the francophone community, which you claim to defend. Meanwhile, that $130,000 has been outstanding—

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you very much, Madam Chair.

Minister, thank you for joining us today. We hope you will come back often.

I'm going to ask you three questions. I would like brief answers, please.

First off, Laith Marouf, who was providing the most vile expressions of anti-Semitism and hate, was given a contract through Canadian Heritage. The NDP was the first party to call for the cancellation of that contract, and the government cancelled the contract. However, I want to know whether the money has been paid back—around $125,000—and what steps have been taken within Canadian Heritage to ensure that those who promote hate in any form will no longer get contracts through the government.

Secondly, on Meta, in testimony before this committee just this week, the Center for Countering Digital Hate stated very clearly, and its studies have shown us, that Meta, in its algorithms, is promoting the most vile anti-Semitism. Meta is not only refusing to respect Canadian democracy with Bill C-18, but has also been cited numerous times for that expression of vile anti-Semitism and other forms of hate. However, we provide subsidies to Meta and Google, according to the Library of Parliament, that are in the order of more than $1 billion every year. That is in the advertising tax credit as an indirect subsidy for Meta.

Why do we continue to subsidize Meta when it is not respecting Canadian democracy and when it has been implicated in the most vile expressions, through its algorithms, of anti-Semitic hate, Islamophobic hate, racism, misogyny, and homophobic and transphobic hate?

My final question concerns the agreement with Google.

We know that, with a crisis hitting news media across the country—we saw what happened at TVA—we need the web giants to contribute to our society and to the dissemination of news.

Google is also receiving this subsidy. Given that there is a shortfall between what the government was seeking and what we are receiving under this agreement, are you considering taking the subsidy away from Google? It represents $1 billion for Meta and Google combined, according to the Library of Parliament. The government could give that money to the media, whose job it is to provide news and inform Canadians about what is happening in their communities.

[Martin Champoux, Bloc, Drummond, QC]

This leads me to a question that was raised earlier about CBC/Radio-Canada. Ms. Tait, the Crown corporation's president and CEO, was in your seat a few weeks ago. She openly admitted to us that, in addition to the funding granted to the corporation, which is $1.4 billion, CBC/Radio-Canada had other sources of financing, including advertising and subscription revenue. This other revenue amounts to $400 million. That piece of information raised everyone's eyebrows. Although we were aware of this reality, the fact that it was announced so casually, in the current context, was difficult to take. I think some restraint would have been in order.

That said, we agreed here in committee, when we studied Bill C‑18, that CBC/Radio-Canada met the criteria. CBC/Radio-Canada is also suffering the consequences of the arrival of the digital giants, but it isn't in the same boat as privately owned media.

In the current context, since we won't be receiving as much money as we'd hoped under an agreement with Google, do you think it would be appropriate for CBC/Radio-Canada representatives to announce that the corporation will not be joining the collective, in order to leave the money entirely for the media outlets that really need it?

Do you think this would be the right thing to do? Will you encourage them to do so?

[Rachael Thomas, Conservative, Lethbridge, AB]

Minister, just out of respect for time.... Thank you.

I will go to my next question, because it's clear that you don't want to answer that one.

It is unfortunate, though, that more power was put in the hands of big tech and that Google was given control over the terms, because the whole point of Bill C-18 was to help level the playing field. That what's been touted the entire time.

At the end of the day, what we've landed with is Meta walking away. It is no longer carrying the news. Google said it would stay and negotiate, but only on its terms, so the government and Google entered into a backroom and they created a deal. They cooked up a deal, and all of Google's terms have been met.

It is another example of big tech and big government colluding, and it will ultimately damage news in this country. It will damage accessibility to news and the choice that Canadians have with regard to news. Yesterday was actually a really sad day in Canada, because that's the impact it will ultimately have.

My question is with regard to this agreement that was cooked up. I'm wondering if you can describe the criteria that the government will use to determine whether a news business gets state approval to join a collective. What are the criteria that the government will use to determine whether or not an outlet is an eligible news business?

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you.

Minister, thank you for making time to be here with us today.

My first question is as follows.

Yesterday, there was an announcement made with regard to Google and the government making a deal. Before I get into that, maybe I'll preface it. You stated that the Liberal government put Bill C-18 forward to “fix a commercial and power imbalance between tech giants and our news media sector.”

The deal that was entered into yesterday between Google and the government would actually appear to show that Google forced the hand of the government. Google got everything it wanted: $100 million spent, one agreement and one collective chosen by Google on their terms. It's clear then that big tech is actually in the driver's seat.

Is this your idea of fixing the power imbalance that exists between big tech and the news industry—by giving them more control?

[Jason Kint]

I agree 100%.

On the research and academic side, I've seen very important researchers.... A group at NYU here in the U.S. was blocked by Facebook from research it was trying to do, because it was seen as adversarial as it tried to expose some of the harms on the platform.

On the flip side, Google hosted Newsgeist in Canada as you were starting to look at Bill C-18. I'm fairly certain that some of the witnesses who defended Google were at Newsgeist, which is a closed-door, invite-only, Chatham House rule conference for a lot of academics and people in the news industry who covet that invitation from Google.

I don't get invited, by the way.

[Jason Kint]

It's very consistent. I think the only distinction is that there's a lot of attention here on the loss of traffic from Facebook when they moved early, frankly, to block all news.

I think it's important to say that news was struggling before Bill C-18 was passed or before Facebook pulled out. Traffic is down from Facebook and Meta across the board internationally. This notion or this myth that suddenly something happened because you passed Bill C-18, which isn't even in force yet, and that's the problem is kind of absurd when you look at and study the international news market.

I think you bravely passed legislation by looking at smart legislation elsewhere that is working. This is a short-term temper tantrum by Facebook, as was described. I think there are very consistent experiences.

A lot of the downstream harms that are being discussed today are also very consistent with what we see elsewhere. I would strongly encourage everyone to look at the state attorneys general lawsuit against Meta for underage children being harmed by their platforms. It's 40-plus state AGs. It's multi-party in the U.S.

Despite kind of looking at the U.S. and thinking that we can't agree on things, there's very clear agreement on the harm that's happening and that Instagram and Facebook are not taking care of their products.

[Dr. Michael Geist]

It does. I know that there are negotiations that the public is not privy to, where members around this table negotiate how many witnesses you're going to have and for how long the hearings are going to go forward.

To me, the starting point has to be not how many witnesses, but who you need to hear from and who is most relevant. Frankly, as part of the Bill C-18 process, there was an attempt to wrap this up after just four meetings, if I recall correctly, when there was a wide range of people—both supportive and critical of the legislation—who hadn't been heard from.

[Dr. Michael Geist]

I think one of the reasons we've seen delays on the harms bill is that, in all likelihood, it is recognized—and rightly so—as being even more controversial than Bill C-11 and Bill C-18, and I think that's true.

I also think that it never made sense to put it in heritage. I don't know why online harms is a heritage issue. Reports have suggested that it has now been shifted within the government. I think that's a good thing, because I think this is much more of a justice and public safety-related issue.

I would say that what we really need as part of this legislation—and this may sound like a naive academic speaking—is for there to be an openness, a willingness, to engage in an open iterative policy process once it gets to committee, in the sense that making changes is not a mistake and doesn't suggest that somehow someone has erred but is rather an attempt to make the bill better.

With all due respect, I've felt that too often committee is set up more as consultation theatre than as actual, real, engaged consultation and that the notion of making changes, even potentially significant changes, is somehow seen as an admission of some sort of failure. I don't think it is.

These are bills that should have been not nearly as controversial as they proved to be. I think part of the problem was that from the day they were put forward—and this has been true for a long time with successive governments, frankly, both Conservative and Liberal—the idea was that, once the legislation was put forward, any significant changes were seen as somehow saying that we had made some sort of mistake and that was a sign of weakness.

I don't think it is. Actually, I think it's the opposite. I think it's a sign of strength to develop the very best policy possible.

[Martin Shields, Conservative, Bow River, AB]

Thank you.

I'm going to pick up where I left off, in reference to what you said about Bill C-11 and Bill C-18 in your statement and how some people might have been excluded for a variety of reasons.

We've just heard that it took two years for the U.K. to do the harms bill. You suggested that we had our study backwards here on Bill C-18 and Bill C-11. What would you like us to see as the mistakes that were made with Bill C-11 and Bill C-18 so that we have legislation that might not be what it should and we excluded people from the process? My idea is that you talk to everybody and make sure everybody's heard if you want to get something right. On the harms bill, what would you suggest?