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.

I want to say I'm very pleased to see that some of my colleagues have addressed the Community Media Advocacy Centre issue. I fully support the interest of my colleague Mr. Housefather, even though I don't have enough the time for it because I want to focus on Bill C-18.

Ms. Frenette, you started to answer my question and I appreciate that. Now I'm going to give you an opportunity to expand your thoughts on the matter since we ran short of time earlier.

My concern is really the eligibility of news businesses. Allow me to explain. The bill provides that a business may be recognized as a "qualified Canadian journalism organization" as defined in the Income tax Act, which establishes certain criteria in that regard. So I want the bill to include criteria guaranteeing a level of journalism quality and credibility of the work eligible organizations do.

Do you think that it's up to the CRTC to address this journalistic integrity issue or that including these criteria directly in the act would simplify matters for it?

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

I think we know. I think we know, Chair of the CRTC. We're seeing reports out daily that Bell, Rogers and even our own public broadcaster will be at the trough on Bill C-18. I will say to you, because you're the chair the CRTC, that you know how much CBC news means in this country and how much money they take out of private organizations.

Here is the public broadcaster again, when they shouldn't be taking money away from private broadcasters trying to survive in the media sphere, taking most of the money away from those that need it desperately, like the newspapers.

This is just absurd. I just cannot believe that this bill has gone this far, allowing Bell, Telus and especially the CBC—

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

All right. Thank you.

You know the Australian model made Rupert Murdoch very, very rich. I see here with Bill C‑18 that very rich will come from Bell Media, from Rogers media.

I want your thoughts. You said you are following the Australian model, or at least Bill C‑18was intended to follow the Australian model, but when I look at broadcasters now, I see they've got their hand into the pot of Bill C‑18, and not only their hand; I would say they've got their whole body into this. They are getting most of the money that could be available through Google and Meta.

With the independent local news fund that you cited, $23 million, how much more do Bell, Rogers and other independent media need to survive in this country? I thought Bill C‑18 was going to be the bill to help local newspapers. It is in fact the exact opposite. We have the multinationals again getting most of the money. They were involved in Bill C‑10, Bill C‑11 and Bill C‑18. I just want your comment on that, because I'm very worried that this bill was designed for newspapers and has turned out to be anything but.

[Martin Champoux, Bloc, Drummond, QC]

I hear a lot of general criticism of the CRTC. People start attacking the CRTC's powers the instant we start talking about its involvement in anything.

In the specific case of Bill C-18, do you think another organization could take charge of overseeing or administering the rollout of the act that's passed? Does any Canadian agency other than the CRTC have the necessary structure to do that?

[Martin Champoux, Bloc, Drummond, QC]

Thank you, Madam Chair.

Mr. Scott, I'm going to continue along the same lines as my colleague Mr. Bittle.

We've heard the concerns expressed by Google, which conducted a pseudo-survey last week. We've also frequently heard people say that the CRTC would be given excessive powers under Bill C-18.

Do you think there's any scenario, no matter how twisted, in which the CRTC could become a kind of omniscient dictator? Do you think that could be possible?

[Chris Bittle, Liberal, St. Catharines, ON]

This perhaps doesn't speak to Bill C-18, but to the work you do. Do you know what percentage of these disputes are settlements versus final offer arbitration?

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you.

Mr. Scott, thank you so much for being with us today and for offering those opening remarks.

Michael Geist has said this with regard to Bill C-18. I'm just going to read his quote into the record. He said:

Bill C-18 doesn't only increase the power of the Internet companies. It also provides exceptional new powers to the CRTC. These include determining which entities qualify as DNIs,

—in other words, digital news intermediaries—

which agreements create an exemption, which Canadian news organizations qualify as eligible news businesses, and whether the arbitration decisions should be approved. On top of that, the CRTC will also create a code of conduct, implement the code, and wield penalty powers for failure to comply. Far from a hands-off approach, the CRTC will instantly become the most powerful market regulator of the news sector in Canada.

Mr. Scott, what's been outlined here is directly in the bill. This is fact.

I'm just wondering if, in your opinion, the CRTC really should be given this amount of control over news in Canada.

[Ian Scott, Chairperson and Chief Executive Officer, Canadian Radio-television and Telecommunications Commission]

Thank you very much, Madam Chair. I delighted in your first mistaken introduction when you referred to new witnesses. It made me feel young. I'm not new but familiar, and happy to be here with the members. I appreciate being invited before the committee once more.

You've already introduced my colleagues, who are here to assist me. As I often say, when I need to call a friend, I have my friends with me.

We're very pleased to appear before you. Hopefully we can contribute to your study of Bill C-18.

The proposed legislation aims to address a market imbalance in Canada's digital news marketplace by creating a new legislative and regulatory framework that would ensure that the major digital platforms fairly compensate news publishers for their content.

If it is adopted by Parliament, the Online News Act would require the largest digital platforms to negotiate with news businesses and reach fair commercial deals for the news that is shared on their platforms. Those deals would also need to respect journalistic independence and invest in a diversity of Canadian news outlets, including independent local businesses.

Should Parliament wish to assign the responsibility of creating and overseeing the regulatory framework under the Online News Act to the CRTC, we are prepared to take it on.

The legislation proposes to entrust five main functions to the CRTC.

Specifically, these are, first, to consider requests from news businesses to be eligible for mandatory bargaining and requests from digital platforms to be exempt from mandatory bargaining by applying the act's criteria.

The second is overseeing negotiation and mediation and maintaining a public list of external arbitrators that meet qualifications set by the commission.

The third is that we deal with complaints of undue preference or unjust discrimination filed by eligible news businesses against platforms.

The fourth is to contract an independent auditor to publish an annual report on the total value of commercial agreements and other key information.

Finally, we are to establish regulations, including a code of conduct for good-faith bargaining and regulatory charges that platforms must pay to fund the administration of the act, similar to the fees paid by broadcasters and telecommunications service providers today.

We have, of course, been turning our mind to the implementation of Bill C-18 should it receive royal assent.

There are several areas in which the commission must create regulations, which include developing regulatory charges to operate the program, as well as creating a code of conduct to support fairness and transparency in bargaining. As well, the bill will require the CRTC to establish detailed policies to provide news businesses, platforms and the public with clear guidance on how we intend to apply the eligibility criteria as well as the companion exemption criteria. Finally, we will of course have to create efficient procedures to administer the act.

There will no doubt be challenges along the way, as there always are when developing a new framework. I'm confident that with input from the public, news businesses and platforms, we will collectively develop a public record to assist us in implementing the new legislation, again assuming it's the will of Parliament.

The good news is that the CRTC is experienced in dealing with matters similar to those that Bill C-18 aims to resolve.

Our mandate is to regulate in the communications sector, and we have extensive experience overseeing mediation and arbitration processes, as well as those relating to undue preference complaints and codes of conduct. We also have experience conducting public proceedings, issuing exemption orders, and maintaining ongoing monitoring systems.

Just as importantly, we recognize the opportunities and challenges created by new players and have a proven track record of implementing policies and adapting approaches over time that enable traditional media, including local broadcast news outlets, to respond to changing market conditions.

[The Chair, Liberal, Hedy Fry]

She is very good at helping. Mr. Champoux would attest to that from the last meeting, which I understand he chaired remarkably well.

I would now like to move to the actual order of the day, which is Bill C-18, an act respecting online communications platforms that make news content available to persons in Canada.

For the first hour, we have the Canadian Radio-television and Telecommunications Commission. We have Ian Scott, chairperson and chief executive officer; Rachelle Frenette, general counsel and deputy executive director; and Adam Balkovec, legal counsel.

I think the CRTC has gone through this before many times, so whoever is going to be the spokesperson—it is my belief it might be Mr. Scott—has five minutes. I will give you a 30-second shout-out when you have 30 seconds left.

Welcome, Mr. Scott, and please begin.

[The Chair, Liberal, Hedy Fry]

Welcome everybody

I call this meeting to order.

Welcome to meeting No. 48 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 Anishinabe people.

Pursuant to the order of reference adopted by the House on Tuesday, May 11, 2022, the committee is meeting on the consideration of Bill C-18, an act respecting online communications platforms that make news content available to persons in Canada.

Today's meeting is taking place in a hybrid format pursuant to the House of Commons order of Thursday, June 23, 2022. Some members are attending in person and some are attending virtually.

Here are a few comments I'd like to make. I think you all know this by rote, but this might be for the benefit of the witnesses.

Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your microphone, and please mute yourself when you're not speaking.

For interpretation for those on Zoom, you have a choice, and everyone knows in the room what to do. Those attending virtually have a little round globe at the bottom, which is the icon you press if you want to get your messages in English or French. As a reminder, all comments should be made through the chair.

In accordance with our routine motion, I am informing the committee that all witnesses have completed the required connection tests in advance of the meeting.

Before we begin the meeting, there is one small order of business, some housekeeping we need to do. I would like to take a moment and proceed to the election of the new first vice-chair, so I will turn the floor over to the clerk.

[Rachael Thomas, Conservative, Lethbridge, AB]

The point I really wish to raise is this: With such an important piece of legislation, I do believe that due process is necessary, so we are asking for three more meetings. We're asking for the minister to come forward. That's been established.

The reason for this, which I would like to go into for just a moment here, is this: We've seen in the past that important pieces of legislation have been rushed through the committee without due process, and important witnesses have not been heard from. In this case, Bill C-18 is absolutely a pinnacle. It will forever change the way that news is potentially produced but also how it's accessed. There are many further considerations that need to be given attention. The way we can do that is by hearing from the several dozen witnesses still on the list who have not been called forward, and also from the minister.

One of the reasons it's so important that we hear from the minister—there are a few—is that we actually, just in general, haven't heard from him at this committee at all. It would be normal for a minister to come forward and to speak to his mandate letter. It would be normal for a minister to come forward and speak to the estimates or the budget, and we haven't actually heard from the minister in that capacity. Specifically, the estimates seem like a really good reason for the minister to show up. On this piece of legislation, it would be appropriate for the minister to show up.

My concern is that this committee is going to rush this process. To ensure that that's not the case, but rather that due time and due process are given, we are asking for the support and co-operation of the other members around this table to ensure that, as stated, a minimum of three meetings are given and that the minister is heard from.

Further to that, one of the reasons why it is so important to hear from those other witnesses who are on the list is that a number of them—many of them—have written to the committee and asked for their voices to be heard. It's in a non-partisan capacity, so there's actually a huge opportunity here to engage in co-operation together.

Further to that, yes, there is another list that is more partisan in nature. There are witnesses that Conservatives have put forward. There are witnesses that Liberals have put forward, and the NDP, and the Bloc. Of course, that, again, is due process at a committee: that we would have the opportunity to put forward witnesses, and that we would also have the opportunity to hear from those witnesses.

Again, my concern is that, without this motion, without giving some sort of direction or framework to the time we will spend on Bill C-18, this bill will be rushed through without hearing from this slate of very important voices from all parties, with a variety of angles being held.

For this reason, we would move this motion.

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you. We'll make sure that it gets to the clerk right away.

For the benefit of the committee, just to clarify, it's a pretty simple motion. What we're asking for is a minimum of three more meetings with regard to Bill C-18. We're asking that the Minister of Canadian Heritage be a part of one of those meetings, so that we would have an opportunity to hear from him with regard to this piece of legislation. We're asking for this to take place before the committee moves to clause-by-clause consideration of the bill.

I will continue to speak to that.

We've seen a pattern in the past where pieces of legislation have been rushed through without due process. Bill C-11 was one such example, which, if successful, will have a significant impact on the virtual sphere. Bill C-18 will also have a significant impact on news outlets, on publishers, on—

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you.

First off, I want to thank the witnesses for being here. I do recognize that we are in the last four-minute stretch of this meeting before moving on to committee business.

The reason why it was so important to move this motion now.... I think we've been rather accommodating to the committee, waiting until the last four minutes. The reason why that's important.... There are discussions that can be had behind closed doors, in camera, in order to protect the identity of certain individuals. That is appropriate. At the same time, there are other discussions that should take place in the public domain for the sake of accountability and transparency. That is most appropriate. In this case, this one does call for a public discussion.

The motion on the table, of course, is asking for three more meetings with regard to Bill C-18 and—

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

In fact, when we talk about the Australian situation, I noticed that at the beginning Facebook or Meta had actually blocked all the Australian content. I didn't see them in the list of witnesses, and there were a number of other witnesses I didn't see.

I would like to move a motion that the committee have a minimum of three additional meetings to hear from witnesses on Bill C-18, with one of those meetings being with the Minister of Canadian Heritage, and that the committee does not move to clause-by-clause until the completion of these three meetings.

[Colin McKay]

For the context of our conversation today, the Australian system produced the expected and desired result. There are contracts that have agreed-upon terms with journalism organizations of all sizes, and the news out of Australia is that this is addressing the public policy challenge in that country.

That should be the outcome of Bill C-18, which we're considering today, and our suggested amendments seek to resolve the undue and unintended consequences of those items that I've identified and other items that we'll include in our submission to the committee to follow shortly.

In the context of other countries, what we see consistently is that if the enforcement mechanism is not thoroughly thought out, and thought out in the context of bad actors, it ends up being gamed and misused by bad actors. That has a negative consequence on the user experience and the discoverability of information, and then also acts in a contrary manner to the public policy goals of the legislation that was originally drafted.

We're very much in favour of this sort of conversation and continued deliberation about how to perfect Bill C-18 to arrive at our shared goals.