Canadian Heritage Committee on Sept. 23rd, 2022

[Rod Sims]

As I said, Google has done deals with essentially everybody—large, medium and small. Facebook has done deals with the four larger players and I think virtually all of the smaller players, but there are a few very small ones left out. They've certainly done deals with Country Press Australia, and they've done deals with Australian Community Media. They've done deals with a whole lot of other players whom I won't mention because you would never have heard of them.

The main area where Facebook hasn't done deals is with two medium-sized players. One is the Special Broadcasting Service, which is a multicultural service owned by the government. I think there's a chance that Facebook would now be designated under the code, which would force it to do those deals.

I think the way the Canadian legislation is worded would ensure that large, medium and small get deals. I don't see a problem there.

The small players have certainly done very well in Australia. As to how much of that money went to them, I'm afraid I just cannot say that off the top of my head. Also, for some of the deals the arrangements are confidential, so I can't do it anyway. What I can say is that a significant amount of that $200 million has gone to smaller players. Country Press Australia represents 180 really small rural and regional players. They're independently owned, and they have done extremely well. Any of those players would be extremely complimentary of the benefits they got from the code.

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

Please excuse our ignorance about the Australian media landscape, but is Country Press Australia an association that includes small independent newspapers from the Northern Territory?

[Rod Sims]

Yes, that's right.

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

So it's not a conglomerate; it's an association of small players.

[Rod Sims]

That's right. It's banded together as an industry association. It has about 60 owners of those 180 publications. It's just that, an industry organization. It's absolutely not a conglomerate. Each of those 180 businesses is very small and, as I said, there are about 60 owners.

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

Thank you for that. Your depth of knowledge is very impressive.

I know you've made an estimate of $200 million in benefits that go to media on an annual basis, and I understand that that's an estimate because some of the agreements are confidential. Is it possible for you to provide to the committee perhaps later on a rough estimate of how much has gone to the four conglomerates and how much has gone to medium-sized players? For Country Press Australia, for example, it's very intriguing to me because those are the folks I'm primarily concerned with, the local journalists. That way we can get a sense of how the benefits may have been distributed.

You're right to point out that there is a lot of misinformation around this bill, but I think it's also appropriate for us, since Australia was the pioneer, to get the solid information that helps to counter the misinformation.

[Rod Sims]

The problem is that there have been a lot of confidentiality arrangements. We have the numbers. I have the numbers, because the ACCC had conversations with many of the media, trying to get a ballpark estimate of where things were: “not above this, not below that”, those sorts of conversations. Unlike with the Canadian bill, there isn't that ability to have transparency. It is very hard to do that.

However, if you were to talk to Country Press Australia, Australian Community Media, or private media like Schwartz Media, the range of small players—the two main ones are Australian Community Media and Country Press Australia—they might well give you the details in a way that I cannot, I'm afraid, just because of the arrangements we have. They are both on the record as being very pleased with their deals. Certainly, their commentary can be provided, but I'm afraid the details of the deals cannot.

[The Chair, Liberal, Hedy Fry]

Thank you very much, Dr. Sims.

Thank you, Peter. Your time is up.

Looking at the clock, we have time for only one more round, and that's going to be the five-minute round. I'll begin with the Conservative Party of Canada and Rachael Thomas for five minutes.

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you.

My first question is for Dr. Geist. I'm noting here around the table.... Mr. Sims said that Bill C-18 is about protecting journalism. Others at the table have said that it's about protecting democracy.

Would you care to comment, based on your expertise?

[Dr. Michael Geist]

I would say that if this were a bill about journalism, I think there would have been a lot more support for it. We should be clear that it's not. It mentions the word “journalism” once, with respect to qualified journalism organizations. It has three sections that mention journalists.

It's not about journalism or journalists. It's about funding some of these legacy media organizations. In fact, there are no standards with respect to journalism at all, and you need to contrast that with what the government has approved with QCJOs, the qualified Canadian journalism organizations, which sets a wide range of standards to ensure that what you are producing and incentivizing the production of is high-quality journalism. There is none of that in this legislation.

With the low standards of allowing entry to qualify for this, what you are effectively doing is incentivizing clickbait. This is low-quality journalism that people will get paid for on the basis of clicks, because they can demand to be part of this table through the collective bargaining, as you just heard. When we look to platforms to try to mete that out and use the algorithms to prioritize the high-quality journalism and demote the low-quality journalism, legislation hits you again, creating potential liability when they demote that.

The danger here is that we are not going to be supporting high-quality journalism. We'll be supporting some legacy companies, to be sure, but if this were really about journalism, one would have thought you would mention it in the bill more than a couple of times.

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you, Dr. Geist.

I want to take that in a slightly different direction, but I think it also has to do with that. One of the things you pointed out was the lack of clarity in the terms used within this bill. One example is “news content”. You've gone on to question whether or not Bill C-18 is even constitutional. What impact would this lack of clarity have? Why do you think we're in this situation? We've been here before. We've seen this with other bills, when the Liberal government said, “Trust us. Just trust us.”

Would you care to comment on that?

[Dr. Michael Geist]

Sure. There are problems even within the bill. I've already noted at least a couple of examples, and there may well be others, where the English version and the French version don't align. This creates potential confusion as to what is intended by the government as part of this bill.

Beyond that, it is quite clearly vulnerable with respect to our agreement with the United States. It is vulnerable with respect to our international obligations under copyright. I must say I find it astonishing that we would effectively say that certain parties don't have rights of quotation, so you have to set it aside for the purposes of negotiation. This is a must-have within international copyright law, yet it's been excluded. I should note that this is something you do not find in the Australian legislation. That's a made-in-Canada violation of international law.

From a constitutional perspective, I struggle to see how this even fits within the traditional powers of the federal government. As I said, it's not broadcast, it's not telecom and it's not copyright. News isn't something that is traditionally within that purview.

What's the likely outcome of this? There is no question that this will be challenged on a number of different levels. The idea that this will result in fast agreements and fast payouts strikes me as exceptionally unlikely.

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you very much, Dr. Geist.

I have about a minute and 20 seconds left. I'm going to go to Ms. Gerson for a moment.

If I was to define the central point of your opening statement, it was that there is a massively detrimental impact of government interference with regard to journalism and media. Essentially, what I hear you saying is that if you get rid of the government, then you bring back the trust of the public, which is waning right now because they perceive the media as being bought off and not reporting stories correctly. Politicians raise many of those same concerns. It would seem then that, if we want a true return to democracy and democratic principles being protected, we should allow the media to function independently of government.

Ms. Gerson, I'm wondering if you can comment on this further or expand on your point.

[Jen Gerson]

I am a small media organization. I don't want money through this program, and I don't want money through the government. I want to be able to be a self-sustaining business.

I have to take some exception, because I think some of the witnesses here have misrepresented what I've said.

Mr. Sims, I didn't say that money went only to Murdoch organizations; I said that the bulk of the money went to Murdoch-based organizations. Your testimony said, “Oh, I don't know.” Do you think that the bulk of the money in this Canadian law isn't going to go to zombie organizations like Postmedia? Of course it will. They have the size, the mass, the incumbency and the legal ability to be able to negotiate for more.

Second, I didn't say that it was a lie that media organizations were struggling. Of course they're struggling. We all know that. What is a lie here is that the media organizations don't benefit from the links involved. The media organizations disproportionately benefit from the links.

[The Chair, Liberal, Hedy Fry]

Thank you, Ms. Gerson. Time is up.

Now I go to the Liberals.

Anthony Housefather, you have five minutes.

[Anthony Housefather, Liberal, Mount Royal, QC]

Thank you so much, Madam Chair.

I want to thank all of the witnesses for being here today. I particularly want to thank Mr. Sims, who is up very early in the morning in Australia. For those of you who don't know, Mr. Sims was called “the most feared man” in Australian business by the Australian Financial Review. He's quite an impressive witness to have.

I also want to take this opportunity to wish Mr. Skok, Dr. Geist and everyone in Canada's Jewish community a very happy new year, which starts on Sunday night.

Let me come to my first question.

Mr. Skok, I'm going to go to you. Dr. Geist just said that this is not about journalism. Do you think this bill is about journalism?

[David Skok]

Yes.

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Deegan, do you think this bill is about journalism?

[Paul Deegan]

Yes, and there's one thing I'd like to pick up on. Dr. Geist referred to the QCJO, saying there's nothing about journalism in here. He might want to read paragraph 27(1)(a), which refers to “a qualified Canadian journalism organization as defined in subsection 248(1) of the Income Tax Act”.

It's right in the legislation, Dr. Geist.

[Anthony Housefather, Liberal, Mount Royal, QC]

Thank you very much.

I'd like to put the same question to the two representatives of Hebdos Québec.

Mr. Chartier and Mr. Poisson, does this bill pertain to journalism?

[Benoit Chartier]

Yes. This bill has nothing to do with anything but journalism. Currently, Bill C-18 represents the defence, health and raison d'être of journalism in Canada, and nothing else.

The claim that the big companies will pocket all the money stemming from the provisions of Bill C-18, and that the small companies will not get a cent, is simply not true. I myself manage a small company. I need this money. I need it for my newsroom, my journalists, my photographers, my proofreaders, my editorial writers and my editors-in-chief. I need that money, and I need the protection of a bill like this one.

I'm speaking on behalf of 250 journalists and 40 publishers in Quebec. I am also speaking on behalf of, and Mr. Deegan will probably agree with me, every publisher in Quebec and across Canada, from Newfoundland to Vancouver Island.

Thank you.

[Anthony Housefather, Liberal, Mount Royal, QC]

I totally agree. It's true for the small newspapers in my Quebec riding.

I also want to go back to you, Mr. Skok.

First of all, I'm very appreciative of the fact that you have retained an English newsroom in Quebec. That is very important to those of us from the minority English-speaking community in Quebec.

I want to come to some of the myths about this bill. First, there's this myth that it will stifle innovation. You did a start-up. You are an innovator. Do you feel that this bill stifles innovation?

[David Skok]

This bill helps innovation still exist as things currently stand. I've heard other witnesses talk about relitigating the past around news organizations, and I've been in those newsrooms as well in the past. This isn't about relitigating the past. These deals have already been struck. This has already happened. Google and Meta didn't have to strike these deals—not link tax deals, I might add, just licensing deals. They didn't have to do any of that; they chose to do it. They've picked their winners already. What this bill does is help level the playing field and prevent those winners from getting a distinct advantage.

Newsrooms can spend their money in three areas: one, going after talent in reporters and editors; two, going after audiences; and three, getting their journalism to people in new ways. The money that has already been allocated by these big tech platforms to publishers has put those of us trying to innovate at a distinct disadvantage.

[Anthony Housefather, Liberal, Mount Royal, QC]

Let me just ask about the other thing I'm hearing, of course, which is the compromising of journalistic independence. Will this compromise the independence of you and the people who work for you?

[David Skok]

It does not, and I should point out that I personally recused myself from any coverage that was ever done about this bill in my newsroom, in September 2020, when it first became apparent that I would have to be involved in this. I don't know what they report. Sometimes they report on things that actually hurt my own personal interests.