Canadian Heritage Committee on Dec. 5th, 2023

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

I'd like to add something related to the point of order, Madam Chair.

[The Chair, Liberal, Hedy Fry]

All right. I'm sorry. I am told by the interpreters that it is her Wi-Fi connection that's giving us the problem. What we could do is try what we did before. At least we got two and a half minutes from Dr. Radsch.

Let's get her to turn off her radio and speak. Can we try that?

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

Madam Chair, in connection with my colleague's point of order, I'd like to mention that I have the privilege of sitting on another committee that holds its meetings in another building.

Being here in the basement of the West Block is no reason for violating my parliamentary rights. I believe that interpretation is very important. I'd like a solution to be found; otherwise we will have to decide to do something about it.

Thank you, Madam Chair.

[The Chair, Liberal, Hedy Fry]

I would like to inform the member that, in fact, chairs have written a letter to the administration complaining about this problem in West Block. I don't know what's being done about it, but we have all said that this is a major problem.

We're waiting to see what the administration of Parliament will do to fix it, because it's ridiculous that we are not, in a country like Canada, able to conduct a meeting with anybody outside of this country without having this problem. Everyone is frustrated by the problem. It has to be fixed, and whatever the administration can do over the Christmas holidays to fix it, let's get it to do that.

Let's try Dr. Radsch without her picture. We know what she looks like.

Would you like to answer the question, Dr. Radsch?

[Dr. Courtney Radsch]

Yes.

Can you hear me now, and can the interpreters hear me?

[The Chair, Liberal, Hedy Fry]

Yes.

[Dr. Courtney Radsch]

This legislation is important, because it creates a forum where all news media, including small news media and other news media, that are unable to even get an answer from a tech platform, or to get verified on a tech platform, will have the opportunity to negotiate.

That is one of the issues that is undervalued in this type of legislation. It is realizing just how valuable it is to create a forum for negotiation to take place, because collective bargaining in a regulatory framework increases the power of smaller news outlets.

Currently, there is no forum in which tech companies are compelled to negotiate with all outlets, other than in Australia. This is an often-overlooked benefit of this type of legislation. I think it will set a precedent for negotiation over the use of news content and data collected and used by AI systems. This is really essential as we move forward and not only try to correct for the mistakes of the social media era and news, but also look to the generative AI era.

Thank you.

[The Chair, Liberal, Hedy Fry]

Ms. Dhillon, you have one minute and 22 seconds left.

[Anju Dhillon, Liberal, Dorval—Lachine—LaSalle, QC]

Thank you, Madam Chair, and thank you, Dr. Radsch. I'm very sorry about the technical issues you were having to experience with us.

I would like to follow up. You spoke very briefly, before you were cut off, about advertisement. In one of your articles, you did research and you spoke about the advertisement revenue value of news content to social media tech companies.

Can you please talk a bit more about your research work and what you found as a conclusion?

[Dr. Courtney Radsch]

The research shows that Google and Meta dominate up to 90% of the digital advertising market. They control various aspects through a vertical monopoly that adds servers and exchanges. This means they can charge monopoly rents on digital advertising.

They also force news organizations to adapt and operate to that logic. We heard earlier about news organizations and their digital presence. One of the problems is that the platforms constrain news organizations to operate according to a logic of clicks and engagement, rather than public interest, because of their vertical monopolies over the digital advertising ecosystem.

Furthermore, what studies show about digital advertising is that news brings significant value to the digital advertising on a platform regardless, again, of whether anyone is searching for that news. For example, the fair compensation for the value that media content provides to Google Search, because of digital advertising wanting to be on that platform, would amount to about 40% of total revenue, or approximately $176 million per year in Switzerland alone.

I'm fairly certain that Canada has a larger population than Switzerland, so you would expect that amount to be even greater in Canada.

Thank you.

[The Chair, Liberal, Hedy Fry]

Now I'm going to the Bloc, with Martin Champoux, for two and a half minutes, please.

[Martin Champoux, Bloc, Drummond, QC]

Thank you, Madam Chair.

Mr. Menzies, you said earlier in your opening address that government funds should be set aside for companies that only do news, by which I mean the newsrooms. For example, broadcasting undertakings that produce other types of content ought to be excluded from government assistance, if I have understood correctly.

Generally speaking, it would mean that commercial radio and television stations would be excluded from receiving any assistance, even if their newsrooms were doing serious work.

Have I understood your comments correctly?

[Peter Menzies]

They wouldn't necessarily be included. I think the main purpose was that it would be businesses that were primarily in the business of news. For instance, in broadcasting, you have a lot of radio stations that do news only because the CRTC licence demands that they do news.

In major markets, that's not necessary. Then sometimes they have only one or two reporters who aren't necessarily adding a lot of value in the broadcasting companies. Some of them, not all—I don't want to accuse all of them—just see it as regulatory rent that they pay. If you had an all-news station, on the other hand, they would qualify conceptually, because this is a concept that we've put forward. News organizations would get the primary benefit from any funding.

[Martin Champoux, Bloc, Drummond, QC]

I understand what you're saying, but commercial radio newsrooms, for instance, are just as valuable as other sources of information. Although I'm having trouble following your line of argument, I agree that the top priority should be serious news companies, without necessarily excluding commercial radio stations.

Returning to your comments about the CBC, you were saying that CBC/Radio-Canada should no longer be able to sell advertising in order to create a more equitable environment. I think you came to that conclusion without first reviewing the Crown corporation's mandate.

Wouldn't you agree that before reaching conclusions like disallowing CBC/Radio-Canada from selling advertising, the public broadcaster's mandate and funding should be reviewed?

[Peter Menzies]

You can put it in whichever order you want. Part of my argument is based on arguments made by Pierre Karl Péladeau at Quebecor and TVA. They recently laid off a number of journalists and put a good deal of the blame on the fact that—

[The Chair, Liberal, Hedy Fry]

Can you shorten your answer, please? We're going over time, Mr. Menzies.

[Peter Menzies]

—it was difficult for them to compete against a subsidized SRC.

[Martin Champoux, Bloc, Drummond, QC]

Thank you, Madam Chair. I have a point of order.

I fully agree with your strict control over speaking time. However, I'd like to draw your attention to the time it takes for interpretation when a witness is asked questions by someone speaking another language. This extra time is only to be expected, whether the interpretation is from French into English or English into French, because you have to wait until the interpretation reaches the listener, and then wait again for the interpretation of the answer. I think you should take that into consideration because it creates inequity in the sharing of speaking time.

Thank you.

[The Chair, Liberal, Hedy Fry]

Thank you for that information, Martin.

We were 15 seconds over time when I called the question. Anyway, I will take that into consideration. Thank you.

We have Peter Julian for two and a half minutes, please.

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

Thank you very much, Madam Chair.

Mr. Trudel, we heard you on the issue of the harassment of journalists. You also spoke about the importance of reducing online hate and eliminating the free ride that web giants were getting. I'm sure you wouldn't be surprised to learn that Meta and Google are currently receiving $1 billion through indirect grants. We are subsidizing companies that want to advertise on Meta.

What measures should the government be taking? Should it stop subsidizing Meta and eliminate the carte blanche that gives them free rein to spread hate online?

What should the government be doing to fight online hate and put an end to the harassment of journalists and many other individuals, as you put it so well?

[Pierre Trudel]

To answer the first part of your question, governments should indeed be consistent. How is it possible to justify spending hundreds of millions of dollars on behalf of companies that choose not to comply with Canadian law? Companies like that should not be receiving funds, whether directly or indirectly, from the government. I think that's obvious.

As for the second part of your question, about what should be done to counter online hate, European regulations on digital services, under the Digital Services Act, offers some interesting avenues. Basically, at the international level, countries are introducing measures to force platforms like Meta or others to do a better job of analyzing and managing the risks to which users might be exposed. For instance, you mentioned journalists. It's mainly the women who are harassed, often in a concerted manner.

That's the kind of risk that companies like Meta and other platforms should be required to analyze and do a better job of managing, with a view to eliminating, or at least severely reducing, the various forms of harassment. Our best chance of eliminating the harassment you mentioned, not only of journalists, but also minorities, including women, is through systemic risk management. These minorities are subjected most heavily to systemic harassment.

Risk management of this kind is definitely something the platforms can do. Of course the courage to force them to behave is also essential. In Europe, the process has begun, and Canada should follow their lead.

[The Chair, Liberal, Hedy Fry]

Thank you, Mr. Trudel.

I will now go to Martin Shields from the Conservatives.

Martin, you have five minutes, please.

[Martin Shields, Conservative, Bow River, AB]

Thank you, Madam Chair.

Thank you to the witnesses for being here. The variety of opinions is appreciated.

Mr. Menzies, you talked about the deal that was made. You've also written about it. If there were 15,000 possible journalists and that could break down to 6,000, I think the comment about pigeons fighting for crumbs would show up somewhere. I'm from a constituency of weekly newspapers, a dozen plus, and from speaking to them last night, it was clear they don't believe there will be anything at the table for them. What would your response be to our rural newspapers, or, as I call them, the “authentic” newspapers, because they're community-based?

[Peter Menzies]

It would be too bad if they were unfairly treated. I think the idea behind it is that everybody would be fairly treated. The idea of the fund that Konrad and I put forward is that it would be distributed, notwithstanding the exclusions I mentioned, on a per capita basis, per journalist. It wouldn't matter how many you had. You would get the same number per journalist that you had.

For the small weeklies, I'm afraid it's not a very happy economic outlook in terms of the transition to the Internet and that sort of stuff. I don't think there's a great deal of a future for print. I think the focus of funding, where it does occur, should be on helping news organizations adapt to the future to build strong digital platforms. This is where the fair compensation or fair dealing with big web companies can come into play on the power imbalance and that sort of thing. That's why a fund works for the little guys.

I don't want to get too long-winded about it, but that would be too bad for the little guys. They should be treated fairly. We need to encourage the innovators and entrepreneurs during a time of transition like this, and not just prop up failed old business models from large companies that are unable or unwilling to adapt.

[Martin Shields, Conservative, Bow River, AB]

I appreciate that. Most of the weeklies in my riding are on digital platforms as well. They have transitioned, and they use both. Sometimes the weeklies are mostly digital and print very few. There's a lot of that transition, but I don't think the money is coming that way.

I think the money, as you have written, is probably 15% to 20% of what people would have been talking about a year ago. When that deflated number of $100 million shows up, how are we going to deal with moving to the next level, as you want to talk about, and I believe rightly so? Where do we have to go next, other than the CBC getting out of advertising? What else do we need to do?