Evidence of meeting #105 for Canadian Heritage in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was platforms.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Joan Donovan  Online Disinformation and Misinformation Expert, Boston University College of Communication, As an Individual
Bram Vranken  Researcher, Corporate Europe Observatory
Riekeles  Associate Director, European Policy Centre, As an Individual
Matthew Hatfield  Executive Director, OpenMedia
Jeff Elgie  Chief Executive Officer, Village Media Inc.
Philip Palmer  President, Internet Society Canada Chapter

8:15 a.m.


The Chair Liberal Hedy Fry

I call the meeting to order.

Good morning, everyone. Welcome to the 105th meeting of the Standing Committee on Canadian Heritage.

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

Today's meeting is taking place in a hybrid format. Members are attending in person in the room and remotely using the Zoom application.

I'm going to go over the usual messaging.

You are not mandated to wear masks, but please wear one because it helps to protect you and your colleagues. You're not allowed to take any photographs of your meeting on the net. You can find it later on; it will be posted.

When you speak, address yourself through the chair. Also remember that the audio system is very sensitive, so please ensure you don't have other devices sitting next to your computer so we get feedback. That's pretty hard on the ears of the interpreters.

We're dealing today with tech giants and their roles in going against government bills, etc. We have six witnesses. One is not here yet, so when he comes on, the clerk will suspend for a minute and we will bring him on and test him.

We will start this morning with Joan Donovan, online disinformation and misinformation expert, Boston University College of Communication.

We also have Georg Riekeles, associate director.

Joining us online, with Corporate Europe Observatory, we have Bram Vranken, researcher.

From Internet Society Canada Chapter, we have Philip Palmer, president, who will be coming on a bit later.

We have, from OpenMedia, Matthew Hatfield, executive director, and from Village Media Inc., Jeff Elgie, chief executive officer.

We will begin, and you each have five minutes as a group, not as a person. If there are two of you, then you will have to split the five minutes. I will give you a 30-second shout-out to wrap it up. Even if you can't finish what you wanted to say, there's always an opportunity during the question period for you to plug your bit in.

We'll begin now with Ms. Joan Donovan for five minutes, please.

December 14th, 2023 / 8:15 a.m.

Dr. Joan Donovan Online Disinformation and Misinformation Expert, Boston University College of Communication, As an Individual

Thank you so much for being here and thank you for the invitation to testify at this hearing.

I'm Dr. Joan Donovan, and I've spent my career studying harmful online campaigns, including misinformation, disinformation and media manipulation. I'm an assistant professor at Boston University's College of Communication.

Until recently, I worked for the Harvard Kennedy School of Government as the research director of the Shorenstein Center and the director of the technology and social change research project, also known as TaSC. TaSC focused on online media manipulation campaigns and influence operations by bad actors, including adversarial nations running misinformation and disinformation campaigns, skewing public discourse, seeding hate, violence and incitement online, and, of course, undercutting democracy's free and fair elections.

Before Harvard, I led my research at Data & Society, a non-profit where my team and I mapped how social institutions were intentionally disrupted through online campaigns. I chose to join Harvard after a lengthy recruitment period because they convinced me that they would support this work at scale.

As we know, governments around the world and the public have come to rely on my work, as well as that of many other researchers in this field, but from my work, they have learned who is behind COVID misinformation, especially the calls for hydroxychloroquine. We also learned what domestic and foreign operatives are doing to create division in communities, explaining the behaviour of 81 countries that deploy cyber-troops to manipulate public opinion online. I have worked with the WHO and the CDC on strategies to mitigate medical misinformation, and most recently, I've worked with the Canadian election misinformation project at McGill University.

In my whistle-blower disclosure submitted on my own behalf by Whistleblower Aid, my team's groundbreaking research in this field was ground to a halt in obeisance to Facebook by the dean of Harvard Kennedy School, a man now known for his deference to donor interests.

In short, in October 2021, a well-known Facebook fixer became enraged in a donor meeting when I told the group that I had Frances Haugen's entire cache of internal Facebook documents and that I planned to create a public collaborative archive of that. I said they were the most important documents in Internet history. This donor and Facebook PR executive attacked everything I said at that meeting. He and Facebook-affiliated donors have powerful influence at Harvard, so that was the start of the Kennedy School's campaign to stop my work and create unceasing misery for my research team. When Harvard received a donation of half a billion dollars from The Chan Zuckerberg Initiative, the fate of my research was sealed. HKS killed the TaSC project and fired me after silencing me and my team for two years.

Courtney Radsch testified here that tech giant intimidation includes researchers and academics and a further weaponization of the big tobacco and big oil playbooks, silencing and skewing research and protecting their profits and lies to the public. However, unlike the censorship campaigns of those before them, tech giants have more tools at their disposal because they control the information landscape and the data about it. For instance, Meta's actions in Canada to fight Bill C-18 have deprived Canadians of more than five million news interactions a day, according to McGill's media ecosystem observatory.

You see the damage of their for-profit motivation acutely in Canada. As Imran Ahmed from the Center for Countering Digital Hate testified to here, we know that bad actors fill the vacuum when credible news and information leave us, with little else to look at. When a school like Harvard is complicit in the corporate direction of research, what can protect those of us who work to document, analyze and share the truth? As others have noted, Facebook's actions to avoid accountability have targeted legislators and regulators in the U.S. and Canada.

I want to close by saying this. I support the online algorithm transparency act, known as Bill C-292 here in Canada, and the similar legislation introduced in New Zealand, the U.K. and the European Union. I was raised with the deepest conviction that I'm responsible for the consequences of my actions, and tech giants must be too. As an academic, I have a moral obligation to tell the truth—then and now.

Thank you very much.

8:20 a.m.


The Chair Liberal Hedy Fry

Thank you very much, Ms. Donovan.

I did not even go to a party last night, guys, but I forgot what the topic was this morning, so excuse me.

I'm going to say for the record what the topic is. It's tech giants' current and ongoing use of intimidation and subversion tactics to evade regulation in Canada and around the world.

The next witness is from the Corporate Europe Observatory. We have Bram Vranken.

Mr. Vranken, you have five minutes, please.

8:25 a.m.

Bram Vranken Researcher, Corporate Europe Observatory

Many thanks for the invitation.

My name is Bram Vranken. I'm a researcher and campaigner at the Corporate Europe Observatory, CEO. CEO is a Brussels-based research group working to expose and challenge the privileged access enjoyed by corporations and their lobby groups in EU policy-making. I will be discussing big tech's lobbying power and the tactics it uses in Europe specifically.

Large digital corporations have grown enormous in size, wealth and influence over the past two decades. The more our economies become digitalized, the more power big tech accrues. Big tech has increasingly monopolized our access to the Internet, and it plays a critical role in our online interactions, the way we access information and the way we consume.

However, its business model is problematic. It is based on aggressive surveillance advertising and data extraction, deploying social recommender systems that amplify disinformation and hateful content and promote unaccountable and unfair artificial intelligence programs.

Together with its economic power, big tech's political power has increased as well. The aim of big tech and its allies seems to be to make sure that there are as few hard regulations as possible to preserve the profit margins and business model. If new rules cannot be blocked, then they aim to at least water them down.

I will expand now a bit on the key factors explaining big tech's lobbying power.

First of all, I will look at its lobbying spending, which already gives a first indication. Just to give a quick overview, our research shows that in the EU, 651 groups and business associations are lobbying the EU's digital policies. Together, they spend 113 million euros annually lobbying the European Union, making tech—the digital sector—one of the biggest lobbying sectors in Europe.

However, large tech corporations, such as Google, Amazon and Meta, are primarily responsible for the increase in lobbying spending we've seen in the last couple of years. The top 10 digital corporations alone spend a total of 40 million euros a year on lobbying. To take a specific example, Facebook is now spending eight million euros a year, making it the company with the biggest lobbying budget in the EU. Just 10 years ago, that was only 450,000 euros, so we're speaking about an increase of a factor of 17 in just a decade. These numbers, by the way, only cover EU lobbying. Big tech also has invested heavily in lobbying in the national states for which data is often not accessible.

What does big tech use this money for? It's used this massive funding to build a very extensive network of lobby groups and lobby consultancies, and provide funding to think tanks and universities. This wide network serves as a gigantic lobbying echo chamber that constantly plays a variation of the same tune: Regulation will damage the economy, damage innovation and be bad for small and medium enterprises.

By funding these organizations, big tech buys access to policy-makers, or as an anonymous tech lobbyist recently stated in Politico, “Their official pitch is: ‘You sponsor me, I organize an event for you’...The unofficial pitch is: ‘You sponsor me, I give you access to this or that MEP”. In 2020, a leaked Google lobby strategy document already highlighted Google's approach, which was, first of all, to mobilize third parties such as think tanks and academics to echo Google's messages, and second, to reframe the political narrative around costs to the economy and consumers.

Recently, there has been increasing attention on an especially insidious way of lobbying whereby big tech has funded organizations claiming to represent SMEs, start-ups and software developers. These organizations' lobbying positions are conspicuously close to those of big tech. In one case, Apple provided more than half of the funding for an organization claiming to represent app developers. In another well-documented case, it was found that many of the member companies of a big tech-funded SME trade association did not know they were a member, and they definitely did not agree with the position of that trade association.

The rising lobby firepower of big tech mirrors the sector's increasing market dominance. It is extremely problematic that these platforms can use their never-ending reserves of funding to ensure that their voices are heard over those of countervailing or critical voices.

However, there are steps we can take. We should protect the decision-making process from privileged access by big tech, for example, by limiting the access these companies have to decision-makers. At the same time, policy-makers should reach out to those who do not have the resources to make themselves heard, such as SMEs, civil society, independent researchers and local groups. I think the panel discussion today is a very good example of that.

I will stop here. Many thanks for your attention.

8:30 a.m.


The Chair Liberal Hedy Fry

Thank you very much, Mr. Vranken.

I will now go to Georg Riekeles, associate director of the European Policy Centre.

Mr. Riekeles, you have five minutes, please.

8:30 a.m.

Georg Riekeles Associate Director, European Policy Centre, As an Individual

Madam Chair and honourable members, thank you for the invitation.

My name is Georg Riekeles. I worked at the European Commission for 11 years, notably on digital regulation and trade files. My current position is associate director of the European Policy Centre, one of Brussels' leading think tanks, but I emphasize that I am testifying entirely in a personal capacity.

In this introductory statement I would like to make three points: one, what I have observed; two, how I think we must understand it; and three, what I recommend.

My first point is what I have observed. My experience and encounters with the big tech platforms from inside the EU over the past 14 to 15 years suggest that EU policy-making is and has been in the grip of big tech platforms and their networks of influence.

I have sought to document this with regard to the EU's legislative debates on the Digital Services Act and the Digital Markets Act, the DSA and DMA. As references, I've written a piece publicly about this in The Guardian called “I saw first-hand how US tech giants seduced the EU—and undermined democracy”, and then a longer piece in Medium called “TEKNOPOLIS: How Big Tech frauds EU democracy”.

It is true that the DSA and DMA will allow Europe, for the first time, to neutralize some of the harms caused by Internet platforms. However, it's also very important to be attentive that the compromises made in getting there in the end also reflect the extraordinary powers of tech companies to influence decision-making. We saw, under these legislative processes, campaigns of direct and hidden lobbying of a brazenness and scale that one should be very attentive to, and which in my view are totally out of line with the applicable codes of conduct for interest representation and the most basic behavioural principles in society.

As much of the debate in Canada has been on the Online News Act, I thought I should take two examples of such tech tactics from equivalent discussions in the EU in the context of the copyright reform directives from a few years back.

These relate, first of all, to the use of front groups and alliances. One example under the copyright debates deals with one of the most vocal stakeholder coalitions in Brussels, called C4C, the Coalition for Creativity, which represented all from public libraries to digital rights organizations. It turned out ex post that this coalition was financed by the Computer & Communications Industry Association, that is, financed indirectly by Google and other platforms. The coordinator was, by chance, also a consultant for Google.

Another example is an organization that is still active. It's called the European Independent Media Publishers. If you go to their website, it says that their the platform that represents over 1,000 media outlets across Europe. What this website did not say when it was created was that this is entirely set up and financed by Google. I discovered this when a consultancy company reached out to me and asked whether I wanted to do some hidden lobbying and think tanking for them. Since this has been called out, they have now added on their website that the European Independent Media Publishers is partnering with and is sponsored by Google.

Those are two examples of the use of front groups, alliances, and astroturfing.

The second major way of leveraging their power and gaining influence is, of course, using the powers that the platforms have directly. When the EU was trying to regulate user-generated content and confer ancillary copyrights on press publishers in 2018 and 19, big tech was directly corralling protesters to the barricades.

I can give you one example. YouTube's chief executive, Susan Wojcicki, crassly told YouTube creators in a letter that the legislation posed a threat to both their livelihoods and their ability to share their voices, threatening hundreds of thousands of jobs and threatening the freedom of expression and the web as we know it. Of course, as we know, in the end the European Commission prevailed. The copyright directive took effect across Europe two years ago. I leave it to everyone to judge the substantiation of Google's dramatic warning that it would change the web as we know it.

How should we understand this? My own experience that I am pointing to here shines very well on what Bram was referring to in the Google memo leaked in November 2020 containing a list of tactics for undermining EU legislation. As the previous speaker also mentioned, it parallels big tobacco. As public scrutiny and research have uncovered in the case of big tobacco, outside vested interests create whole ecosystems of thought, influence and subversion to manipulate society and policy-makers.

I think it's very interesting to go back to the landmark study of the World Health Organization, “Tobacco industry interference with tobacco control”, which summarizes what these tactics can look like. We also see this in the area of big tech. It's about lobbying. It's about framing the narrative. It's about creating alliances and setting up front groups and astroturfing campaigns. It's about influencing or buying think tanks and academics. It's about hospitality. It's about political support and funding. It's using philanthropy. It's also about litigation and intimidation, and about the use of international pressure.

I see that the time is up, so I will end there. I can possibly come back to what I recommend in the questions and answers.

Thank you very much.

8:35 a.m.


The Chair Liberal Hedy Fry

Thank you, Mr. Riekeles.

Now we'll go to Matthew Hatfield, executive director of OpenMedia.

Mr. Hatfield, you have five minutes, please.

8:35 a.m.

Matthew Hatfield Executive Director, OpenMedia

Good morning. I'm Matt Hatfield. I'm the executive director of OpenMedia, a grassroots community of nearly 280,000 people in Canada who work together for an open, accessible and surveillance-free Internet.

I am speaking to you today from the unceded territory of the Tsawout First Nation.

This hearing came from Bill C-18's hearing. I'm happy to answer questions about how that bill has landed and what must come next, but in listening to the exchanges you've had with witnesses before today, it seems to me that—

8:35 a.m.


The Chair Liberal Hedy Fry

Excuse me. Could you please slow down for the interpreters? Thank you.

8:35 a.m.

Executive Director, OpenMedia

Matthew Hatfield

Certainly. My apologies.

To me, this hearing's topic seems to be pinning down what's wrong with tech platforms and what our government can do about it. I'll try to answer that question very precisely for you.

What's wrong with tech platforms and their influence on society? It's three things: their size, their vast asymmetrical data compared to regulators and citizens, and the engagement algorithms that drive their business model.

Let's talk size. Platforms like Amazon and Google have a stranglehold on a huge share of Internet commerce, app purchases, advertising and more. They often use that power to set unfair terms vis-à-vis smaller businesses and consumers. I'll note, though, that Bill C-18 misunderstood the specific dynamic around news. It assumes that news has inherent value to platforms that, for Meta at least, it does not.

The good news about the size problem is that Canada is opening new possibilities to do something about it through competition reform in Bill C-56 and Bill C-59. In the U.S., several bills were proposed last year aimed at regulating how tech giants treat small businesses and consumers. They include the American innovation and choice online act and the open app markets act, both of which OpenMedia campaigned for. In Canada, the Competition Bureau has never had the legal basis to study platform power effectively, let alone change it. Soon they will.

My second point is about data asymmetry and privacy. Platforms like Meta and YouTube have an endless volume of sensitive data about each and every one of us. They use it for advertising and to feed recommendations, but not for much else. Partly that's to respect our privacy, which is a very good thing. Their data in the hands of a spy agency or law enforcement would be a dystopic surveillance nightmare and one that we must guard against. However, that lack of curiosity on the platforms' part is also self-serving. It makes it easy to bury accurate study of what may be going wrong for some of their users and, in the worst case, lead that minority to harm themselves or others. The limited research that exists on how platform models may sometimes amplify harms is done with very incomplete data or with crumbs of researcher data access, which platforms are quick to withdraw if their interests are threatened.

Here we need both an individual and structural remedy. The strongest possible privacy bill, Bill C-27, giving Canadians meaningful and unalienable control of our personal data, is one solution, but another must be a very strong provision for both regulator and approved academic researcher access to perform studies on platform data in our upcoming online harms bill. We can't intelligently regulate platforms if we don't understand how any harms they help produce actually occur.

Last but not least, let's talk about the algorithm. Without even noticing it, we've become a society in which most information we get is delivered because it keeps us scrolling and clicking, not because it is nuanced, well researched or true. For music or hobbies, that can be a wonderful tool of self-exploration. People are not passive consumers of our feed. We curate it heavily, pruning the algorithm to serve us what we like most. However, for facts and reporting, that same process is making us a less-informed, angrier and more polarized society. We all feel the impact and very few of us like it. That doesn't make solutions easy, although I would say that Bill C-292, Peter Julian's bill, is something worth considering here.

I'll give a couple of signposts for what might help. We welcome this committee's interest in a dedicated study of how to create a viable news sector in Canada that continues producing vetted information. There's a case that Canadian news needs permanent government support, but the more involved government becomes, the more urgent it is that funds move through a system that is fully transparent to the public, has clear and fair criteria for who gets what support and prioritizes funds where they're most needed, in local news deserts and public accountability journalism, not shovelling funds indifferently toward Bell or the CBC. The alternative of stacking complex funding band-aids one on top of the other until they represent the majority of news funding is not going to build public trust in truthful journalism.

We would also welcome a Canadian study of how social media algorithms are impacting society. However, regulating the algorithm, if it comes, must be aimed at expanding transparency and personal control over how it works for Canadian Internet users, not manipulating it for what the government thinks is best for us.

8:35 a.m.


The Chair Liberal Hedy Fry

You have 30 seconds.

8:35 a.m.

Executive Director, OpenMedia

Matthew Hatfield

Over 12,000 members of our community asked you for fixes to Bill C-18, and over 20,000 of us raised concerns around the government's first online harms proposal, but that's far from the extent of our community's interest in tech platforms. Over 9,000 OpenMedia community members have demanded more anti-harassment tools and control of our data on online platforms. Nearly 34,000 of us have signed actions demanding data protections and regulating the data broker industry.

I look forward to discussing any of these important platform issues with you. Thanks.

8:40 a.m.


The Chair Liberal Hedy Fry

Thank you, Mr. Hatfield.

I'll go to Jeff Elgie, the chief executive officer of Village Media.

8:40 a.m.

Jeff Elgie Chief Executive Officer, Village Media Inc.

Good morning, everyone, and thank you for having me today.

I apologize if my comments are not directly aligned with the title of this session, but I was asked specifically to come today to provide our perspective on Bill C-18 and the Online News Act.

As a brief introduction, I am the CEO of Village Media, which is headquartered in Sault Ste. Marie, Ontario. We began with one local news publication and two journalists 10 years ago. Today we own and operate 25 news publications in Ontario and employ approximately 150 Canadians, 90 of whom are journalists.

Beyond operating local sites, Village has developed made-in-Canada technology for the publishing sector. This technology now runs our own publications along with those of Glacier Media, Dougall Media, Great West newspapers, Black Press Media and others. As of now, we power almost 150 news websites across Canada.

As you may know, I spoke in front of the Standing Senate Committee on Transport and Communications with respect to Bill C-18 back in May. My position since has not materially changed.

To briefly summarize, we believe the bill and the Online News Act were flawed from the get-go. It was suggested that platforms such as Google and Meta steal our content and provide no meaningful value in exchange. We argued this couldn't be further from the truth. The truth is that we, including news publishers, willingly play to allow for snippets of our content to appear on the platforms, because we benefit tremendously from the traffic we get from them. For Village Media, this helped us grow and launch 25 publications and develop a profitable and sustainable model for local news.

I'm here today to speak about some of the impacts of the Online News Act. It is my belief that we have now created a number of scenarios where, in many cases, news publishers may come out behind. For large publishers, particularly those that had deals with Google and Meta, including Village Media, I expect some of us will be ahead and some of us will be behind financially. While these deals are covered under non-disclosure agreements, it seems apparent that, by having a smaller pool of expected funds from Google—$100 million—and by adding zero funds available from Meta, it is quite possible the ultimate value of the Google deal may in fact be less than the prior deals with both platforms.

For small publishers—including start-up and independent publishers—that did not have deals with either platform, there is still much to be determined as we wait for the final regulations to be released. First, will they qualify? Second, how much will they receive, if so? If you ask many of those small publishers if they would prefer to receive some amount per journalist, which may theoretically equate to approximately $10,000 per year, or have their Meta traffic back, I expect many would prefer to have their Meta traffic back.

This is the scenario for Village Media. Even the best-case scenario for the Google deal likely does not make up for the value of lost Meta traffic. That traffic allowed us to monetize our publications more effectively and to develop new audiences, subscribers and followers we would otherwise be challenged to reach. Facebook in particular was one of the best on-ramps to new publications we have found, and we have tested many. In the absence of Meta, sustainably launching news sites, or even sustaining recently launched sites, might no longer be possible.

This problem goes beyond my own self-interest. As an even worse outcome, Canadians are now no longer exposed to news on Facebook and Instagram. At a time when voter turnout is at record lows and we can expect to be flooded with disinformation through technologies such as generative AI, the missing voices of Canadian journalists in these environments will no doubt be damaging to our society.

Over our 10 years of operation, Village has gone into each year with an expectation of growth and continued sustainability. We're profitable and we reinvest our profits by expanding into new communities and growing our newsrooms. However, as of April of this year, in anticipation of the outcome of the Online News Act, and for the first time ever, our company has paused almost all new hirings and suspended new community launch plans. The potential outcome of the Online News Act has substantially impacted our progress.

Thank you for having me.

8:45 a.m.


The Chair Liberal Hedy Fry

Thank you very much.

We'll now suspend for a short time to get Mr. Palmer online.

Thank you.

8:45 a.m.


The Chair Liberal Hedy Fry

We're back to the meeting.

Mr. Palmer, go ahead for five minutes, please.

8:45 a.m.

Philip Palmer President, Internet Society Canada Chapter

Thank you, Madam Chair and honourable members, for this opportunity to address you this morning.

The Internet Society Canada Chapter is an independent not-for-profit corporation that advocates for an open, accessible, safe and affordable Internet. We accept that some regulation of the Internet and its participants is necessary, and it is welcome. We have heard nothing this morning that we disagree with from the various panellists who have spoken.

However, extreme care has to be taken in formulating regulatory policies in order to obtain the best results for Canadians. The Internet is the most revolutionary societal disrupter since the invention of printing, and those disruptions are occurring at warp speed. Its reach is global, as are its impacts.

The Internet features both beacons of light and cesspools of depravity. Its more positive aspects further the goals of an enlightened humanity. Its worst aspects are a challenge to liberal democratic values and to all societal and legal norms.

Social media is often marred by shockingly bad behaviour. It can transmit misinformation and disinformation, discourage reasoned debate and constrain the participation of members of civil society as a result of racism, misogyny, threats and intimidation.

Where is Canada as the world confronts the many challenges that arise from the Internet?

Canada is a small country, economically open to the world and dependent on its relations with its peer countries. The Internet and Internet-based services are the key to Canada's continued integration into the global economy. For Canada to thrive and for her citizens to prosper, it is critical that Canada approach the Internet and its regulation with some humility.

Canada is too small in population and in wealth to establish the norms by which the Internet will be regulated or how Internet service providers will govern themselves. If Canada overreaches and imposes unrealistic economic and social costs on Internet services, it may find its businesses and its citizens cut off from the services and knowledge that are available to its peers.

Canada has already proposed or adopted counterproductive Internet-related measures, two of which were studied by this committee. The Online Streaming Act, rather than bringing Canada's Broadcasting Act in line with the world of Internet-based services, attempts to bring the Internet into the walled garden of the Canadian broadcasting regulatory system. The Online News Act attempts to extort payments from Internet platforms to subsidize news producers.

This committee's present study was inspired by its work on Bill C-18 and Google and Facebook's reactions to it. We maintain that Bill C-18 is deeply flawed. It has already had foreseeably negative impacts on Canadian news businesses and on Canadian consumers of news.

The choice of whether to provide Canadians with access to news and be subject to the act or to withdraw from the Canadian news ecosystem comes down to a business decision. Meta announced early that it would withdraw from the Canadian news market if Bill C-18 was adopted. This was not intimidation; it was a lawful and rational business decision.

The withdrawal of Meta from the Canadian news space has proven to be a hardship for Canadian news producers. If Meta's withdrawal is a hardship, Google's withdrawal from the Canadian news ecosystem would be catastrophic for Canadian news businesses and for the Canadian public.

We welcome the agreement reached between Google and Canadian Heritage. It promises to avoid that catastrophe. Nothing we say here today should be construed as approving the activities of tech giants, a term that encompasses not only the large international behemoths but also our domestic giants—Bell, Rogers and Telus—which dominate domestic markets and extract casino profits from Canadian consumers. It is good to see that Canada is focused on competition law reform.

There are a number of experiments under way in democratic societies that deal with Internet and tech regulation that Canada can learn from, emulate or co-operate with. It is critical that thoughtful policies be crafted that recognize the unique characteristics of the Internet and that they put up the full value of Internet-based services for Canadians. Poor regulatory policies will harm Canada and Canadians.

Thank you very much.

8:50 a.m.


The Chair Liberal Hedy Fry

Thank you, Mr. Palmer.

Now we're going to the question-and-answer part of this committee.

The first round will be six minutes. It includes questions and answers, so please be as terse as you possibly can be.

We will now begin with the Conservatives.

Rachael Thomas, you have six minutes.

8:50 a.m.


Rachael Thomas Conservative Lethbridge, AB

Thank you.

Thank you to each of the witnesses for taking time out of your morning and providing us with important information today.

My first question is for you, Mr. Palmer.

We had the Heritage Minister here at committee a couple of weeks ago. She stated that the CBC currently employs one-third of all journalists in Canada. Based on the regulatory framework being outlined for the Google deal of $100 million, that money will be divvied up based on the number of journalists a company or news outlet employs.

Do you believe that the CBC should be included in this deal?

8:50 a.m.

President, Internet Society Canada Chapter

Philip Palmer

Frankly, I think that the most important thing that can come out of this is an examination of the role of the CBC in news. The CBC's mandate is now nearly 100 years old and it has not changed significantly over time. The CBC's role in Canadian news is obviously significant, but how it relates to other Canadian news partners is critical to the future of the news business in Canada.

From my perspective, and I think that of our society, we do not favour the Google funds going to the CBC at this time. We think the mandate review is essential to carrying forward in a balanced manner, given the challenges that the news industry faces in Canada.

8:50 a.m.


Rachael Thomas Conservative Lethbridge, AB

Thank you, Mr. Palmer.

Mr. Elgie, I'll ask you the same question.

I'm curious. Should the CBC be included in this deal and therefore receive about a third of all funding?

8:55 a.m.

Chief Executive Officer, Village Media Inc.

Jeff Elgie

Thank you for the question.

I was asked that question by the CBC on Power & Politics and I said that I didn't think it seemed reasonable.

The CBC currently receives a generous contribution from the federal government of approximately $1.2 billion. If you break that down and distill it, it's equal to almost $150,000 for each of the 3,000 journalists of the 8,000 staff they have. It seems they have a massive advantage. The CBC also competes with the private sector, for digital advertising in particular.

We feel that this money is best directed to the private sector.

8:55 a.m.


Rachael Thomas Conservative Lethbridge, AB

Thank you.

Mr. Hatfield, in one of the articles you wrote, you said that Bill C-18 “puts media under the thumb of government and platforms, encourages the spread of poor quality journalism, and does nothing to rejuvenate local media.” Do you care to expand on that statement?

8:55 a.m.

Executive Director, OpenMedia

Matthew Hatfield


I think some of those concerns are what we're going to be looking for when we assess the final regulatory agreements that Heritage reaches with Google. I'm concerned that the government has essentially tried to create public support for news on the cheap without doing some of the work of establishing a truly transparent, open system to provide that support. Strong-arming platforms into forming agreements with news was an attempt to create the system without going through the hard transparency work.

I'm very concerned that in the final agreement, a group like Google will have considerable discretion over who is getting support and who isn't. It's either that Google will have a lot of discretion or a government-appointed body will have a lot of discretion, or both. I think Canadians deserve better. I think we need a system where it's very clear on what terms support is being allocated and who's getting it.

8:55 a.m.


Rachael Thomas Conservative Lethbridge, AB

Mr. Hatfield, on that note, then, in your estimation, what would be the best way to restore news media to a place where it's producing diverse news, independent news, in a place of healthy thriving? What would that look like in the nation of Canada? What would it take to restore media to that place?