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.

[Martin Champoux, Bloc, Drummond, QC]

Thank you, Madam Chair.

It's no secret that technology has evolved a great deal. We used to get our news in written form through the newspapers. Then came radio in the 1930s and 1940s, followed by radio newsrooms, and then television. All of those media produced their own journalistic content through their newsrooms.

The market changed considerably with the advent of Internet, as we know. The whole world changed its lifestyle habits. Unlike traditional media, social media don't produce the content they offer their subscribers themselves. This is truly an unusual situation for the media industry, which is normally so used to adapting to change. If we fail to adequately protect our newsrooms and news media, they will, quite simply, disappear. Who, then, will be left to produce quality journalistic content?

I think the answer lies in the question.

Mr. von Finckenstein, you disagree with the way Bill C‑18 is put together. I'm not asking you to approve or disapprove what I've just said. That said, I think that, as former chair of the CRTC, you must be aware of the fact that the journalism and news media industry needs a new framework.

If that isn't achieved through legislation, such as the one before us that would compel companies that share content produced by our newsrooms to enter into agreements, how do you suggest we allow our news organizations to enjoy their fair share of the market that's been largely overtaken by the online platforms?

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

Thank you, Madam Chair.

It was interesting the other day hearing from the Minister of Heritage, who cited that 468 news outlets have closed in this country since 2008. I will also say that many of those news outlets that closed were Bell Media, Rogers, National Post and Torstar. These are the same organizations that want to be at the trough of Bill C-18. It's really interesting.

What the minister didn't say in his testimony is that we've had over 200 news operations—independent organizations—open in this country.

I just wanted to make that statement because this bill is not going to save the media in this country. We have seen Bell, Rogers, National Post and Torstar tear down in small communities like Swift Current, Lloydminster, Prince Albert, Yorkton, Red Deer, Kelowna and Kamloops. I can go on and on. If the panel thinks that this bill is going to save rural media, think again. People are getting their information a little differently.

I'm going to go to Mr. von Finckenstein.

You are the former chair of the CRTC. As you know, you don't have any experience in regulating news or even in competition matters. I just told you how many news outlets have closed in this country. Suddenly, the CRTC is now going to have the power to determine what news publishers benefit and what the definition of a “journalist” is, and it will oversee arbitration, including the picking of an arbitrator.

Do you think, Mr. von Finckenstein, that the CRTC should be given as prominent a role as this in Bill C-18?

[Kevin Chan]

I think it's important to indicate that, on Facebook, what you see are the conversations and exchanges of 21 million Canadians. They are their opinions, and they are their communications to one another and to friends and family. I think that's what you see on Facebook.

Having said that, I think perhaps my colleague Marc has some thoughts on fact-checking, the general idea of misinformation and how it pertains to Bill C-18 that might be helpful for legislators. If I may, I'll turn it to Marc to try to answer that one.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Yes, that was very clear, to make sure the committee needed to invite and hear what Meta would say.

So what changes do we need to make to Bill C‑18 to make sure we don't have the same consequences as Australia?

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Thank you, Chair, and thank you to the witnesses for appearing today.

I'm happy to see my Liberal colleagues beginning to realize that without significant amendments to this bill, we may see some unintended negative consequences, like 22 million Canadians having their content blocked by Meta.

My question is for Mr. Chan. In Australia, when content was blocked and thereafter similar legislation was brought, there were amendments that were requested and put in place. What were those amendments, and what should we be doing to Bill C‑18 in order to prevent that same adverse outcome?

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you very much.

Thank you to all of our witnesses. I'm going to try to do my best here on behalf of Mr. Julian with Bill C-18. I do appreciate everyone's feedback on this bill.

Ms. Charette, I'd like to start with you.

I was taking some notes as you made your opening statement, and I can very much relate to the concerns that you have and the willingness that you show to maintain a strong and diverse mediascape in Quebec, but I think that also applies to many regions in Canada as well. I know we've been hearing from the FNCC and many stakeholders that Bill C-18 has set out too restrictive criteria for news media companies to be eligible for negotiations with the web giants.

I have a couple of questions for you. First, what would happen to thousands of small news media companies, many of which are non-profit organizations, such as community radio and community TV in Canada and Quebec, if Bill C-18's eligibility thresholds remain unchanged?

[Anthony Housefather, Liberal, Mount Royal, QC]

I checked with the clerk yesterday, and the answer was no.

The last time Facebook was here, Mr. Chan and Mr. Dinsdale, I asked a number of questions about the experience of Facebook in Australia, where it threatened to take down pages because of similar legislation to Bill C-18. Facebook did so, causing chaos for a week. You said, at the time, that you could not answer and did not know what would happen in Australia. As a result, this committee summoned Mark Zuckerberg, your CEO, who could have answered the questions. He ignored the committee's summons.

Given that, last week, Mr. Dinsdale made the same threat to Canada about shutting down pages, and Mr. Chan did the same in his testimony today, I certainly hope you're both able to now speak to the Australian experience.

Various whistle-blowers have stated that, in order to plan for the Australian shutdown, they required multiple staff members to pre-emptively sign special NDAs.

Mr. Dinsdale, do you normally require staff members at Facebook to sign NDAs for major Facebook events?

[Matthew Hatfield]

Yes, that's right. I'm going to springboard a bit off what Kevin was just saying here. Under this bill, we're attaching a cost to good information while leaving bad information free to spread without any cost. The belief is that this will somehow lead to good information spreading more and faster. Does that seem right to you? I mean, we didn't need to be costing good journalism in this way. We could have found money for it without attaching this cost. Unfortunately, the decision of the drafters of Bill C-18 has been to do this.

In terms of concerns about the spread of bad information here, it's incentivizing existing outlets to produce more lower-quality content, but because of how low the standards are in Bill C-18 for recognizing quality information outlets, it's actually opening huge doors for a whole range of bad actors to enter Canada and start spreading their misinformation. We're talking about clickbait farms, the “doctors can't believe this” type of people who might take huge advantage of this legislation. We're even talking about hostile foreign actors, groups like RT, but there are many more who might have a real interest in misleading Canadians and might find a way of misusing this legislation to do so.

[Rachael Thomas, Conservative, Lethbridge, AB]

Yes. Thank you. My Internet is unstable, so I am cutting in and out a little bit. My apologies.

My next question is for Matt at OpenMedia.

Matt, you talked about the fact that Canadians need high-quality news sources. You said that a great deal of variety is required in order to maintain a democratic system that is healthy, but you also made the comment that Bill C-18 actually doesn't accomplish this stated intent. In fact, you seemed to indicate that it would harm innovation, creativity and variety among news sources.

Do you care to expand on why that's the case?

[Annick Charette, President, Fédération nationale des communications et de la culture]

Good afternoon.

The Fédération nationale des communications et de la culture represents 86 unions in the field of culture and information in Quebec, including the major news media unions.

From the outset, I'd like to say that our primary concern is the preservation of a strong, professional, independent, diverse and financially healthy press in Quebec. We also want the press to maintain the ability to offer a diversity of viewpoints that reflect not only the regions but the multidimensional fabric of the Canadian population. We also want it to be present in all its forms across the country.

Far too many media outlets have already closed up shop, in large part due to the fact that advertising revenues—news media's traditional revenue source—have been siphoned off by digital platforms.

To meet these objectives, it's imperative that we address the failures in the market, namely, the considerable leverage that digital platforms have over news media outlets by taking the lion's share of advertising revenues derived from journalistic information. That's why we believe these legislative provisions are necessary to adequately regulate and balance the commercial relationship between the news media and the almighty—and, might I add, somewhat threatening as of late—digital platforms.

The Fédération nationale des communications et de la culture supports Bill C‑18 in the name of its members, but also in the name of all Canadians, because professional information is a pillar of democracy. A well-informed population is a population that makes informed choices, which is what we all want, I believe.

Nevertheless, we'd like to bring to the attention of legislators some aspects of the legislation that could be improved.

First, the CRTC's proposed exemption order powers, which allow platforms to be exempt and to negotiate new agreements, are too broad and risk seriously compromising Bill C‑18's effective contribution to strengthening the diversity of voices in the field of news media.

We're absolutely committed to the preservation of smaller media outlets that, among other things, meet the specific needs of certain communities and regions. A few major agreements with national media shouldn't undermine the ability of smaller actors to exercise their rights.

Second, Bill C‑18 should provide for negotiations for a greater number of news media, including local media with only one full-time journalist and emerging digital media, which aren't based on the same structure as traditional print media. We also believe that media companies that deal in specialized journalism should be taken into consideration.

[Matthew Hatfield]

I don't always love my platform feed, but I don't want our government knowingly making it worse. That's what Bill C-18 currently does.

OpenMedia community members have sent nearly 8,000 emails to MPs asking for fixes to Bill C-18. Every one of us wants to see a flourishing Canadian news ecosystem, but without extensive amendment, there's a considerable risk that Bill C-18 will make that news ecosystem worse, not better.

Thank you.

[Matthew Hatfield]

Our biggest concern is what Bill C-18 will do to our online feeds. What kind of content do you think will get the most Facebook shares or the most retweets on Twitter? Do you think it is the in-depth, long-read investigative journalism that holds our leaders accountable, or do you think it is puff pieces, fiery unsourced op-eds and outright misleading clickbait?

Bill C-18 triples down on this kind of content. It nudges legitimate news outlets to make more of it, to see their shares grow and earn more compensation. It offers yellow journalists and content-mill click farms a real possibility of qualifying for guaranteed mandatory platform subsidy and promotion. It forbids platforms from taking any steps that would prioritize content from higher-quality outlets—like the National Post or The Globe and Mail—above that of any other qualifying publication.

[Matthew Hatfield, Campaigns Director, OpenMedia]

Thank you.

Good afternoon. I'm Matt Hatfield and I'm the campaigns director of OpenMedia, a grassroots community of nearly 220,000 people in Canada who work together for an open, accessible and surveillance-free Internet.

I am speaking to you from the unceded territory of the Stó:lo, Tsleil-Waututh, Squamish and Musqueam nations.

My question today is this: Who's in Bill C-18 and who's out? Who is producing high-quality journalism that deserves government-mandated subsidy and promotion, and who isn't? How much are they entitled to, and will the public ever have transparency to see that these questions are being answered fairly?

We believe the government is trying to dodge responsibility for answering these highly sensitive questions, yet Bill C-18 still answers them. Burying these questions just means its answers are more obscure, secretive, unequal and potentially damaging to trust in journalism.

There's a real problem that Bill C-18 is trying to solve. Canadians need high-quality, trusted, fact-checked journalism, and lots of it. Our democracy depends on it.

It's true that huge online platforms—Google and Meta chief among them—are collecting a lot of revenue in Canada. It's fair to ask them to contribute more of that revenue back to things that Canadians need. That's why we support the digital services tax, and that's why we wish we were debating a much simpler version of this bill that directly taxed them.

Linking news revenue primarily to the spread of news content on platforms is a toxic poison pill. News simply isn't a primary revenue driver on platforms—that's a fact—and a lot of the reporting of great importance to society is least likely to go socially viral.

Linking news support to links and clicks gives both platforms and news publishers strong incentives to cheat the system in ways that discourage the spread of quality news. It fails to target the resulting funds where they're actually most needed, subsidizing today's biggest winners in news production while not bringing back lost outlets or supporting the emergence of new ones. It makes news outlets dependent on the continued success of online platforms to survive, which is a dangerous weakening of their credibility and independence.

Also, because Bill C-18 uses links and clicks as a substitute for stronger evidence of public interest journalism, Bill C-18 sets such a low bar for identifying a qualified news outlet—lower than the already flawed QCJO system—that low-quality outlets, click farms and even malicious foreign actors could potentially qualify for mandatory promotion and subsidy.

For these reasons, we believe that without substantial amendment, Bill C-18 will be enormously destructive to the quality of, distribution of and public trust in Canadian journalism.

The money is not going where it needs to. Minister Rodriguez has told us that small news publishers aren't really interested in Bill C-18's support—despite hundreds of publishers who have said otherwise. Canada's news problem is largest in small communities that have lost their primary outlets and in hollowed-out, downsized regional newsrooms.

Will Bill C-18 do anything to bring dead local outlets back? No. It does nothing today for communities with no existing news source, and if a small local outlet reopens, it locks them out from support until they hit a significant and possibly unattainable size.

Will it induce major news chains to restaff downsized local divisions? How and why would they do that? What rational business will staff up the slow and expensive local accountability beat when your new primary revenue stream is the most viral and clickbaity of social media content? And that's before we consider that 75% of Bill C-18's revenue is predicted to go to TV and radio broadcast, predominantly to giants like Bell, Rogers and the CBC.

This committee has criticized the secrecy of the deals Google and Meta make with publishers. Fair enough, so why doesn't Bill C-18 fix that? You can't rejuvenate public trust in journalism by making these problematic secret revenue deals larger and more secret, with more opportunity for the CRTC, government and platforms themselves to quietly influence them. Under Bill C-18, negotiated deals are still secret, as is the process for assessing eligibility for QCJO status and the reason for accepting or rejecting applicants. That's not a recipe for building trust in the news.

Our biggest concern is what Bill C-18 will do to our online feeds. What kind of content do you think gets the most Facebook shares or the most retweets on Twitter? Do you think it is the in-depth, long-form investigative—

[Kevin Chan]

Madam Chair, members of the committee, thank you for inviting me to speak today to Bill C‑18, the online news act.

Today we want to share directly with the committee our concerns about this draft legislation and the unintended consequences we worry may flow from it in the fullness of time.

We have three main concerns: the true division of value between platforms and publishers, the unintended consequences of payment for free marketing, and the stifling of innovation.

First, the framework of the current legislation presumes that Meta unfairly benefits from its relationships with publishers when, in fact, the reverse is true. The Facebook platform helps publishers. Meta does not scrape or index news content or links. Like any business, non-profit, public or political organization, Canadian news publishers choose to share links from their websites on Facebook to reach a wider audience, which leads to increased readership of their stories. This, in turn, allows them to sell more subscriptions and advertising.

In Canada, we estimate that Facebook feeds sent registered publishers more than 1.9 billion clicks in a single year. That's free marketing for their content in the form of link posts that has an estimated value of more than $230 million. Simply put, this is what it would have cost news publishers to achieve the same outcome on Facebook if that space wasn't provided to them for free.

We can see that Facebook already helps Canadian publishers to the tune of hundreds of millions of dollars a year.

Second, the online news act would force Meta to pay news organizations for content that publishers voluntarily place on Facebook. In blunt terms, we would be forced to pay publishers for giving them free marketing on Facebook, which I just noted was valued at $230 million last year. This would be a most peculiar and unorthodox arrangement.

In the current economic climate, and as we prioritize long-term investments in the metaverse and in the growth of short-form video in response to competition and user preferences, we are being asked to acquiesce to a system that lets publishers charge us for as much content as they want to supply at a price with no clear limits. I hope you will agree with me that no business can operate this way.

Third, successful regulation must be grounded in fact. We have long supported regulation that sets clear and fair rules for everyone and an open Internet where creativity and competition can thrive. But as independent experts have warned, a policy that unfairly subsidizes legacy media companies now struggling to adapt to the online environment is an approach that will harm competition, reduce trust in media and make the transition to digital models even more difficult.

A recent report by the Parliamentary Budget Officer only underscores these real concerns. According to the PBO's analysis, it is broadcasters, including the public broadcaster, that will receive the lion's share of transfers, leaving less than 25% for newspapers. Also, as someone who has spent over five years listening, learning and supporting digital news entrepreneurs, it is concerning that Bill C-18 is seemingly even less helpful to them. We encourage the committee to find more opportunities to hear from the next generation of Canadian digital news innovators.

Let me be clear: Canada is incredibly important to Meta.

Canadians will always be able to use Facebook to connect with friends and family, to help build communities and to grow their businesses.

However, faced with adverse legislation based on false assumptions that defy the logic of how Facebook works, which, if passed, will create globally unprecedented forms of financial liability for news links and content, we feel it is important to be transparent about the possibility that we may be forced to consider whether we continue to allow the sharing of news content on Facebook in Canada.

As always, we remain open to working with this committee and the government on solutions that are fact-based and reflect the interests of all Canadians.

Thank you.

[Konrad von Finckenstein, Former Chair, Canadian Radio-television and Telecommunications Commission, As an Individual]

Thank you, Madam Chair, for inviting me to comment on Bill C-18.

As you know, the stated purpose of the bill is to regulate digital news intermediaries, with a view to enhancing fairness in the Canadian digital news marketplace while contributing to its sustainability. The underlying rationale of this bill can be summed up very simply: Local news publishers do not get appropriate compensation for news they produce that reaches the public via digital platforms.

To rectify the situation, the act contemplates a mandatory bargaining process between the platforms, called digital news intermediaries or DNIs, and news publishers, called ENBs. The process is very simple. DNIs have to identify themselves; ENBs are qualified by the CRTC. They have to bargain. The bargaining is mandatory. It has to be done in good faith. If the bargaining fails, there is mediation. Finally, if mediation fails, there is a final offer of arbitration. All of this is to be done under the auspices of the CRTC, which designates the parties, manages the process, furnishes a panel of arbitrators, and advises throughout.

I am not here to question the rationale of the legislation nor the method adopted. Rather, I would like to share with you some problems I see in implementing this legislation. This should not be taken to mean that I support this legislation, however.

It goes without saying that implementing this bill will present the CRTC with a huge new challenge. I look at these issues from the perspective of former chair of the CRTC. When you implement a bill, the legislation should be specific and objective. That is very helpful to the administrator, while vagueness and overly broad discretion mean numerous demands, contestations and delays.

There are five points I would like to bring to your attention.

First, whom does this act apply to? How do you identify the DNIs? The bill requires DNIs to self-identify and notify the CRTC. The criteria are based on whether there is a significant bargaining power imbalance between the operator and the news business. It is based on such criteria as the size of the intermediary, whether the market gives the intermediary strategic advantage, and whether the intermediary occupies a prominent market position.

The concepts of size, market, strategic advantage and prominent position are all borrowed from competition law and very much depend on context. They do not have an objective meaning. Rather, it seems to me that it will be a dog's breakfast trying to identify DNIs. They are asking companies to self-identify and giving the CRTC power to compel information to decide if the respondent is a DNI. The bill should be amended and provide that the minister, by regulation, and after consultation with the commissioner of competition, designate the DNIs.

Second, who benefits? On request, the CRTC must designate a business as an ENB if it is a “qualified Canadian journalism organization”, as per the Income Tax Act—that's fine—and produces news content “primarily focused on matters of general interest and reports of current events”, “regularly employs two or more journalists” in Canada, operates in Canada, and produces news content that is “not primarily focused on a particular topic.”

That is a very wide definition. It does not exclude government, overt political actors or foreign actors. It has no reference to journalistic standards and would even seem to include broadcasters, who are obviously regulated by another statute. In my view, this section should be amended to provide that ENBs have to be Canadian-owned and Canadian-controlled, must adhere to journalistic standards as set out in the code of ethics of the Society of Professional Journalists, and should not include licensed broadcasters and their affiliates or government actors.

Third, the bill allows the CRTC to exempt a DNI if it has an agreement with an ENB. That agreement must provide fair compensation to the news businesses for the news content. That is fair ball. That is what it is all about.

Then it goes on to say “ensure that an appropriate portion of the compensation will be used by the news businesses to support the production of local, regional and national news content” and that it does “not allow corporate influence”, etc. There are all these points. If you look at them together, they're really purposes. They should not be here; they should be in the purpose section.