Canadian Heritage Committee on Sept. 23rd, 2022

[Dr. Michael Geist]

—these provisions go beyond that, and are vulnerable under CUSMA's performance requirements under 14.10.

With regard to constitutional concerns, the bill isn't broadcast, it isn't telecommunications, and it's not copyright. How, then, does it fit within federal powers? If the government claims powers over anything involving the Internet, there are no real limits on jurisdiction. As for the charter statement, it inaccurately claims that the bill supports news organizations when the Internet platforms monetize their content, even though that's not what the bill says or provides.

I thank you for your patience with the technical problems. I look forward to your questions.

[The Chair, Liberal, Hedy Fry]

Thank you very much, Professor Geist.

I now move to Hebdos Québec.

Who will be speaking? Mr. Chartier, go ahead.

[Benoit Chartier, Chair of the Board, Hebdos Québec]

I will start. We will split the speech.

Thank you, Madam Chair.

Members of the committee, my name is Benoît Chartier. I am the chair of the board of Hebdos Québec. I am joined by our general manager, Sylvain Poisson.

We represent more than 30 owners of independent weeklies, for a total of some 80 weeklies in the province of Quebec. Each of these print media outlets has an online platform. Hebdos Québec represents some 200 journalists who work for all the weeklies in Quebec, and we speak on their behalf.

For my part, I own five weeklies and websites, including the oldest French-language publication in the Americas, Le Courrier de Saint‑Hyacinthe, which is celebrating its 170th anniversary this year. I am the third generation with this company.

Without exception, our respective newsrooms, which, as I said, employ some 200 journalists, create or produce original local or regional content for each of our news products.

We distribute some 10.3 million copies per year throughout our territory, while our digital platforms have more than 20 million page views per month and close to 15 million unique visitors per month.

I would point out that Hebdos Québec is marking its 90th anniversary this year, and the greatest gift would be to see Bill C‑18, which is under consideration today, passed into law as soon as possible.

The press is a bulwark of democracy. It has a duty to the public, namely, to provide quality information supported by rigorous journalism. The French-language weekly press in Quebec has also played a fundamental role in delivering news to the heart of many local communities, often in regions without any other local or regional media. In this regard, we can say that a weakened press that is under pressure to abandon its mission and in danger of disappearing after decades of work poses a serious threat to our democracy.

For their part, the weeklies have been part of the economic and cultural landscape for over a century. They are essential to the democratic vitality of each region. Away from major urban centres, they are often alone in playing that role, and they are as relevant as they were before the advent of social media.

Local and regional weeklies have a crucial role to play in countering the unfettered circulation of social media content that is stripped of journalistic practices and ethics.

Already seriously weakened by the major crisis of the media, we have suffered from the lengthy pandemic, which has included the closure of businesses, significant drops in advertising revenues, and problems with staffing, operational restructuring and newsrooms.

I would like to express my most sincere thanks to the Government of Canada for its support and valuable assistance in these circumstances, which have been difficult both economically and personally.

Mr. Poisson, I will hand it over to you to finish the presentation.

[Sylvain Poisson, General Manager, Hebdos Québec]

That said, in recent years, the crisis has deepened with the arrival of web giants such as Facebook and Google. The content aggregators that the Internet has given rise to have multiplied at little cost, without producing original content, with very little or no investment in journalism, and few ethical rules pertaining to the news.

Some news sites and the multiplication of social networks result in the mixing of genres, but without guaranteeing source credibility. They spread rumours or fake news, which leads to disinformation, while giving the impression of truth or verified facts. Social networks are full of fake news, which flies in the face of a responsible press and journalistic rigour, values we strongly defend. These trends are harmful to a healthy democracy.

By controlling the algorithms, the web giants have cannibalized our revenues, without assuming any of the associated social and fiscal responsibilities. They have upended the business model and diminished the real value of the news. In particular, they have attracted 80% of the advertising dollars of companies and local and regional businesses without providing any tangible benefits to those communities. In just a few years, without paying any taxes, these web giants have eroded the revenues of traditional media, which for decades have invested time and money in their communities, encouraged their businesses and professionals, supported their institutions, and served the public interest of their fellow citizens.

Hebdos Québec therefore supports the basic approach of Bill C‑18 to address the market imbalance between global web platforms and news publishers. Collective bargaining is also the only way for us to address this obvious power imbalance.

A Pollara Strategic Insights survey conducted on behalf of News Media Canada indicated that 90% of Canadians consider it important for local media to survive, and 79% agree that the web giants must share their revenues with the media.

Would you like to add anything, Mr. Chartier?

[Benoit Chartier]

I think that covers everything.

[The Chair, Liberal, Hedy Fry]

Thank you, Mr. Chartier and Mr. Poisson.

The next witness will be News Media Canada. There are three people: David Skok, Paul Deegan and Jamie Irving. One or all of you can divide up your time, but you will still have only five minutes.

[Anthony Housefather, Liberal, Mount Royal, QC]

Madam Chair, I wanted to mention that Mr. Skok is not from News Media Canada. There seems to be an error on the list. He's a separate witness.

[The Chair, Liberal, Hedy Fry]

Before we go to News Media Canada, Mr. Skok, whom do you represent, please?

[David Skok, Founder and Chief Executive Officer, The Logic Inc.]

I represent The Logic.

[The Chair, Liberal, Hedy Fry]

Thank you very much.

Mr. Skok, you can begin. You have five minutes, please.

[David Skok]

Thank you and good afternoon, Madam Chair, members of the committee and your incredible IT team.

I don't want to be here. My job is to report on what you do here. It's certainly not to be a part of it, and yet I feel like I don't have a choice. I founded The Logic almost five years ago, and we are Canada's leading business and tech newsroom. As an independent publisher with no lobbyists, no trade association backing and no allegiance to any start-up or legacy interests, but with 25 years of experience as a journalist, I'm one of the few people who can speak frankly about what's at stake with Bill C-18.

The fourth estate is a key part of a functioning democracy, and ours is in crisis. We know the depressing stats about the decline in original, in-depth reporting in Canada. All you need to do is to take a cursory glance at your own news feeds to see that there is no shortage of hot takes or articles amplifying hot takes on Twitter. You know this. It frustrates you too.

By contrast, brave and substantive reporting is critical to a high-functioning democracy, and, unlike reporting on those Twitter fights, that reporting costs money and time to produce. I have dedicated my life to this pursuit, which is why I'm here. The Logic invests heavily in journalism that makes Canada a better place to live and work by facilitating hard conversations through rich investigative and analytical reporting. These stories can be national in scope, like an investigative series on how Canada's charitable sector allocates its funding, or they can be local, like how automation is impacting the community of Brooks, Alberta.

Just this week, we launched a six-part series examining the strains in Canada's supply chains, beginning with an on-the-ground report from the port of Vancouver. This is vital work.

Because of the money already being paid by large tech companies to a select few Canadian publishers, we are now operating in an anti-competitive market that privileges some and risks starving this country's journalism ecosystem of the innovation it so desperately needs.

Day in and day out, our world-class team is paving a path for others to follow. What began five years ago with three people is now a national newsroom, with almost two dozen reporters across the country in six bureaus. This includes one of the only remaining English-language bureaus in Quebec. After decades of newsrooms cutting their core product, The Logic is proof that you can put journalism and journalists at the centre of your company.

Make no mistake—our competitors watch us closely. That is a good thing. That is how competition is supposed to work. It makes everyone better. Innovation takes time, yes, but it also requires a level playing field. We did not ask for any of this. The secret deals already struck by Meta and Google have created a market imbalance that gives competitors an unfair advantage in the war for talent, audience and distribution.

When The Logic tries to compete on merit against a publication bankrolled by the wealthiest family in Canada—one now being further underwritten by secret deals with the world's largest companies—how does that help foster journalism innovation?

The online news act seeks to rectify this imbalance. It is a backstop, forcing publishers and platforms to come to the table for fair, equitable and transparent agreements that don't privilege only those with negotiating power. Bill C-18 is a pro-competition bill.

It is also good for journalism. Without regulation, publishers who have already signed these secret deals are depending on the good faith of big tech firms to keep them in place. As an editor, I have some questions. How much are those deals worth? What has that money bought? What will happen when it's time to renew those deals? How can these tech giants be reported on fairly when publishers rely on those same companies to meet payroll?

Currently, we cannot answer any of those questions, because they're all covered under non-disclosure agreements. Bill C-18 forces those deals out into the open, and that is good for journalism.

As the saying goes, sunlight is the best disinfectant.

I am optimistic about the future of our craft. It takes time for news to regenerate. It takes time for young journalists to relearn what has been lost after decades of job cuts, and it takes time for today's start-ups to turn into tomorrow's leaders. If there's one thing that I hope you can take away from me today, it's that all of this much-needed innovation requires a level playing field. Bill C-18 seeks to correct an existing imbalance, which is why it needs to pass.

With that, I'm happy to take your questions.

[The Chair, Liberal, Hedy Fry]

Thank you very much.

I apologize for lumping you in with News Media Canada. I don't know if either of you is happy about that.

Next we will go to News Media Canada. We have Mr. Deegan and Mr. Irving—whichever one of you—for five minutes, please.

[Paul Deegan, President and Chief Executive Officer, News Media Canada]

Thank you, Chair.

Good afternoon. On behalf of News Media Canada, our member publishers, and the 3,000 journalists we employ, who inform Canadians across the country every day, we are pleased to participate in your study of Bill C‑18.

During the 2021 election campaign, the Liberals, the Conservatives and the New Democrats all made commitments to introduce news media legislation. Why do we need this legislation?

First, the need for strong, independent local news has never been higher. It keeps communities connected and informed on issues that are impacting them directly. Covering city hall, provincial and territorial legislatures and our courts, and indeed holding you, our parliamentarians, to account are vital to our democracy.

Second, there's a significant imbalance of power between tech giants and Canadian news outlets. To put this in perspective, the market cap of Google is roughly $1.8 trillion. Meta is over $500 billion. Together, that’s in the ballpark of Canada's annual GDP. Together, these companies' take of online ad revenues stands at more than 80%.

Third, with the prospect of legislation, Google and Meta started picking winners and losers, and David alluded to this earlier. They started negotiating content-licensing agreements with a dozen or so publishers, including Le Devoir, The Globe and Mail, and the Toronto Star. Most recently, Google did a deal with Postmedia.

Don’t get us wrong; we’re happy for our member publishers. They should be getting compensated for their content. But we now have a situation of haves and have-nots among Canada’s news publishers, and that’s not fair, especially to smaller publishers who have been left out in the cold—publishers like Benoit Chartier, from whom you heard a moment ago. Again, it's important to remember that Benoit runs the oldest French-language newspaper in North America; it's been around since 1853.

There are other publications that are hugely important to our country. La Liberté in Manitoba, which Sophie Gaulin runs, is an important publication. They don't have Google or Facebook knocking on their door. We have Dave Adsett, who runs The Wellington Advertiser in Mr. Nater's riding. These are all very important publications for the communities, and they also need to get content-licensing agreements.

Let me outline three reasons why we support this legislation.

First, it allows us to negotiate collectively. Currently, the Competition Act bars us from forming a collective. Given the overwhelming power imbalance, we'll be in a stronger bargaining position if we negotiate together.

Second, it includes an enforcement mechanism. Baseball-style final offer arbitration ensures that parties put their best offer forward and the arbitrator picks one or the other. The hammer of arbitration incents both sides to reach a fair settlement on their own.

Third, similar legislation is working in Australia. As Rod Sims just shared with us, the amounts paid to news organizations in his country total over $200 million. More important than how much is who that money is going to. Sure, large organizations are benefiting the most on a total dollar basis. That’s understandable, Australia has one of the most concentrated media markets in the world. But others, like Country Press Australia, an affiliation of 160 smaller regional publications, were able to reach settlements with Google and Meta. More recently, a group of 24 small Australian publishers reached a deal with Google.

In an article written by Bill Grueskin of the Columbia Journalism School, he refers to a professor in Sydney who says that she can't believe the opportunities that exist right now. Her students aren't taking internships “because it’s so easy for them to land full-time jobs”. She said, “I swear to God, I have not seen it like this in twenty years.” That's because of the code that Rod Sims put in.

As a matter of principle, we believe that publishers large and small should benefit equally from any settlement, based on their proportionate investment in newsroom employees, not in corporate overhead. We've developed an approach that we believe is transparent and fair to members of News Media Canada and the National Ethnic Press and Media Council. Simply put, any monies from collective negotiation would be shared among publishers on a pro rata basis based on their salaries and wages paid to eligible newsroom employees, and that's a number that's already provided to the CRA.

In conclusion, Google and Meta have roles to play in the news media ecosystem going forward. It's in their self-interest to have rich, trusted content that our journalists produce, but at the same time, they enjoy a dominant position in the marketplace, where search and social are designed to keep the user within a walled garden where they extract value from content. We simply want to be compensated for the value of that content so that we can reinvest in our newsrooms.

Thank you and we look forward to further discussion.

[The Chair, Liberal, Hedy Fry]

Thank you very much.

That ends our witness statements. We will move on to the question and answer session. The first round is going to be six minutes, and those six minutes include the questions and the answers, so I'd like everybody to be as succinct as you can possibly be.

We begin the six-minute round with the Conservative Party and John Nater.

Go ahead, John.

[John Nater, Conservative, Perth—Wellington, ON]

Thank you, Madam Chair.

Thank you to our witnesses for joining us this afternoon. There is certainly a varied amount of opinions and commentary, which is always nice to hear when we're discussing important legislation such as this.

I want to start with a couple of questions for Dr. Geist and Ms. Gerson. Both of you mentioned in your opening statements the idea of the value proposition or where the intrinsic value comes from. Dr. Geist, you talked about the difference between reproduction and facilitating access. Both of you made various commentary related to that side of things.

Professor Geist, could you expand on that a little bit? Is this bill perhaps going down a slightly skewed path in terms of where the funding will be directed?

[Dr. Michael Geist]

I think we've heard several witnesses emphasize that their materials—their work, their news content—are being used and that they should be compensated for that. If this were use in the way that I think most Canadians would consider use—which is that Google, Facebook or whoever is copying their articles, reproducing them and running ads against them—one could well understand why that would be the conclusion, but the definition that is used in this legislation goes far beyond that. It speaks merely to facilitating access to news, putting it in an index with even just a portion of a work. So, if you link to the front page of The Globe and Mail, the National Post or the Toronto Star, which has some articles there, that's facilitating access to news. If you merely have a link to it uploaded by a member of this committee, or me or someone else, that link is considered facilitating access to news.

I don't think that's use in the way people would think of it. When we say that publishers aren't being paid fairly, that's the kind of thing they shouldn't be paid for. There is no copyright in it and it's not being used, in a way. So if we're talking about compensating for use, the legislation ought to reflect that. I don't believe the definition we have comes anywhere close to doing that.

[John Nater, Conservative, Perth—Wellington, ON]

Thank you, Professor Geist.

Ms. Gerson, do you have any comments on that matter as well?

[Jen Gerson]

I wish we could be a little bit more candid about what we're talking about. When we say that Google and Facebook are in competition with news media outlets, we're not in competition for content; we're in competition for advert revenue. That's why the news media's business model fell apart. It wasn't because Google and Facebook started stealing the content; it was because Google and Facebook started providing a better platform that individuals could advertise on. They manage to provide more attention, and I wish we could just be a little more candid about that.

The second thing I would point out is that, last I checked, something like four out of every thousand links shared on Facebook are news content. Most links are cat videos or pictures of kids. The idea that Facebook in particular needs us.... I think that if you believe that, you are setting yourself up for a financial fall. You are going to make yourself dependent on a business that doesn't need you.

Google may be a bit different; however, we all remember the fables of social media platforms like Myspace and other types of things. We know that these things have a bit of a temporary lifespan. We also know that people evolve in their social media use and their social media habits, so what are you going to do when Facebook is increasingly the place for boomers sharing cat videos and most Internet activity happens on forums like Discord, Telegram and other types of semi-private organizations? That's where links are being shared, if they're being shared at all. I think that, bluntly, you're setting yourself up for a dependency on an ad revenue that can't and won't be sustainable in the long run. I have some real concerns about that.

I'm sorry; I'm a little bit ill at the moment, but, Mr. Nater, if there are any other questions that you have to that effect, I'd be happy to answer them.

[John Nater, Conservative, Perth—Wellington, ON]

Thank you. I appreciate it. I appreciate your taking the time even though you're feeling unwell today. We do thank you for that. I'll have to go and find my password for my Myspace page to see whatever has happened to it over the last 15 years.

I want to carry on with a couple of questions. This bill envisions that the CBC, the national broadcaster, would be included in it. I find it interesting as well that this program will be administered by the CRTC. Just last week, the Governor in Council sent back the CBC's licence renewal to the CRTC. It's interesting that the government doesn't agree with the CRTC's decision on that and at the same time is putting the CRTC in charge of it.

I'll see how much time I have left.

[The Chair, Liberal, Hedy Fry]

You have 57 seconds.

[John Nater, Conservative, Perth—Wellington, ON]

That's lots of time.

Professor Geist, what are your thoughts on the inclusion of the public broadcaster within this, but also the CRTC being the one to administer it?

I'll start with Professor Geist, and perhaps Ms. Gerson would have a couple of seconds as well.

[Dr. Michael Geist]

I'll try to go quickly.

I'll start with the CRTC. I don't think this is the CRTC's bailiwick in terms of the role it plays. It sets an enormous number of standards, and I think there's reason for concern for that role. Frankly, more broadly, the inclusion of broadcasters here is problematic. There is another example, actually, of different definitions in the English-language version of the bill and the French-language bill with respect to broadcasting. It's something the committee should take a look at.

Beyond that, if you talk to a lot of the local digital-first operators, they will tell you that the CBC is a competitor of theirs in those local communities, and to provide them with additional revenue effectively forces their hand. Even if those small and independent players don't want the money, they have little choice but to participate in this system. It's basically forced negotiation for those kinds of companies too—

[The Chair, Liberal, Hedy Fry]

I'm sorry, Professor Geist.

We have no time, John, for Ms. Gerson. Perhaps you can get back to that in your five-minute round.

I will now move to the Liberals and Lisa Hepfner.

You have six minutes, Lisa.

[Lisa Hepfner, Liberal, Hamilton Mountain, ON]

Thank you, Madam Chair.

I am very happy to be here today with my colleagues for the study of this bill.

As many of you know, although it bears repeating, I was also a news journalist from 1999 up until just last year, when I decided to serve my community in a different way. I worked in print newspapers like the Edmonton Journal and the Hamilton Spectator, and then later for broadcasters. Over that time, I saw first-hand the decline in journalism, not just in the number of publications and broadcasters in communities but also in the number of people in the newsrooms, going from literally hundreds down to a handful. That affected the number of people who would be at the meetings, at the courthouses or in the city halls telling the stories of the people and the things that bring a community together and make it feel like a community. Watching this first-hand, I have become very concerned about the threat to our democracy.

I was extremely interested to see Australia taking the lead and addressing what we've heard called an “imbalance”. I'm very grateful that we have the architect of that legislation here with us today.

I would like to start with you, Mr. Sims. Tell us what life is like for journalists in Australia today compared with what it was like before this legislation. We've heard a little bit about this from you and other witnesses, but really, today it's kind of tough to keep a job in journalism. I'm wondering what it's like in Australia.

[Rod Sims]

It has transformed the journalism landscape in Australia. It's gone from pessimism to optimism. We have different readouts on where the money's gone. I mentioned the Guardian and a 50% increase. The Guardian is a new player to Australia. They're a middle-sized player. They're of course backed up by Guardian U.K. It has helped them enormously to get into new areas. It has also helped the Australian Broadcasting Corporation get into a range of regional media.

Just the general sense in journalism is that there are jobs now. There's a sense of optimism. Previously, there was a profound sense of pessimism.