Canadian Heritage Committee on Oct. 18th, 2022

[Rachael Thomas, Conservative, Lethbridge, AB]

In fact, it is no cost to them, but it actually is a cost to you.

[Colin McKay]

Yes.

[Rachael Thomas, Conservative, Lethbridge, AB]

It's a cost to the tune of what?

[Colin McKay]

I can't speak to the total cost of our network and our search engine, but it is a substantial cost. It's an investment we've been making in Canada for the past 20 years.

[Rachael Thomas, Conservative, Lethbridge, AB]

Google reported that it's a cost of $500 million.

Thank you, Mr. McKay.

[The Vice-Chair, Bloc, Martin Champoux]

Thank you, Ms. Thomas.

We will now go to the Liberal Party.

Mr. Bittle, the floor is yours for five minutes.

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

Thank you, Mr. Chair.

I guess I'm a little shocked. Mr. McKay has said a couple of times that Google is a partner of journalists and journalism. It's shocking to me, because in meeting after meeting we have all of your partners come up to support this bill and condemn your practices.

My first question is for Mr. Scott.

Globally, is Google a partner of journalists and journalism?

[Dr. Ben Scott]

I'll use the newsstand analogy that just came up in the last round of questions.

Imagine that the newsstand industry in Canada was owned by one company with a 90% market share. They took 80 cents out of every dollar of advertising that went to every newspaper that put their paper in that newsstand, but in order to reach audiences, they have to be in the newsstand. That's a partnership of a sort, but one that is incredibly exploitative.

I also think it's ironic to hear Google say that agreements they make behind closed doors with news publishers are commercial licensing agreements, but when those same commercial licensing agreements are mandated by law, they are link taxes. This is the kind of doublespeak that you don't often hear from partners.

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

Thank you so much. With friends like Google, who needs enemies?

You mentioned that countries around the world are grappling with Google, with the Australian model and with legislation like Bill C-18. Can you expand on why Bill C-18 specifically is a good solution to many of the problems faced by other countries?

[Dr. Ben Scott]

I think other countries have the same problem that you're facing in Canada, and they're coming up with similar solutions. I know you've heard from Rod Sims, who has done this in Australia. The Australian model has a lot of lessons to be taken from it.

Everybody faces the same problem, which is a crisis in journalism. Everybody sees the same diagnosis, which is that monopoly and the digital advertising industry is a huge contributing factor to that crisis. They are looking for ways to intervene to make sure the public gets journalism.

I think what Bill C-18 has going for it is that it leans in the direction of greater transparency. I would argue for more. It leans in the direction of mandatory minimums for using funds to support the production of journalism. I would argue that those should be more explicit. It leans in the direction of trying to make sure that every publisher—whether it's a small, rural organization or a large, urban organization—gets an equitable deal.

Those are all important improvements on the Australian bill and things that I think could be clarified in this bill to make the Canadian law the world leader.

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

Thank you so much.

Mr. Desjardins, are you a partner of Google?

[Kevin Desjardins]

I am not, personally. I do believe there are some relationships between our members and Google. As I said, there are 700 members across the country, so it is difficult for me to nail it down. I do know that some have entered into those negotiations.

I think one point we're coming to is this idea that a link has value. I think the whole purpose of why we're here and what we're talking about with Bill C-18 is the fact that the link is creating more value for the global platforms than for the Canadian journalism organizations. That is the discrepancy we're trying to address here.

If we ask whether there is value in sending people to TVA Nouvelles, CTV News, Global or my radio station members or what have you, yes, there's value, but who is retaining the majority of that value? The majority of that value is being retained by the platforms.

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

Very quickly, do you think these “partnerships” would exist without the threat of Bill C-18, or the Australian model and other legislation across the country?

[Kevin Desjardins]

I would say that the place we want to get to is one where all journalism organizations are entering into those partnerships, as opposed to having a foreign platform choose the winners and losers in Canadian journalism.

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

Thank you.

[The Vice-Chair, Bloc, Martin Champoux]

Thank you.

It is my turn to ask a few questions.

I think some very interesting points have been raised.

Mr. Myles, I am going to come back to you to talk about the option of non-participation, that is, the possibility of a media outlet simply withdrawing from the platforms. One of my colleagues made a comparison. It may be somewhat clumsy, but he said it was a bit like someone wanting to start up a delivery company and deciding to do it with a horse-drawn cart rather than buying trucks.

Does a media company have a choice, today, as to whether or not to use the digital platforms?

[Brian Myles]

We have a choice. We are not forced to do business with Google, Meta, Twitter or Apple. We choose to put our content on those platforms because the discoverability funnel and the megaphone that those companies represent are much more powerful and supportive than our own.

Today, Le Devoir has more subscribers to its digital version than to its paper version. Every day, we receive statistics on visits by both casual users and subscribers. The primary gateway they use is keyword searches on Google. The second is sharing on social networks. Direct connection, where people type "ledevoir.com", comes in third, but far behind the other two. So no, we cannot do without the digital platforms.

Other witnesses have explained this very well: the issue is the redistribution of the value created in that relationship. These are complementary relationships and they are partners, but the relationship is necessarily unequal, since 80% of advertising revenue is in the hands of two companies.

[The Vice-Chair, Bloc, Martin Champoux]

I would like to ask you a quick question. Time is flying, and I really want us to have the time to complete the round of questions.

We have also talked about professionalism and the quality of the journalism. Do you think the criteria set out in Bill C‑18 for a business to be recognized and accredited are too broad? Do you think that somewhat more stringent journalistic norms and rules should be applied?

[Brian Myles]

No, not at all. The issue is to determine how to make the smallest players eligible and how they can be provided with a level of support that enables them to get by.

I note that the Guidance on the income tax measures to support journalism sets out the rules to be followed in order to obtain the status of a qualified Canadian journalism organization. The guidance contains all of the answers and arguments we need for our purposes. I would draw your attention to point 2.27, which states that it must be engaged in journalism and must produce general interest news and content that is "produced in accordance with journalistic processes and principles." Misinformation can be avoided if the criteria that already exist are applied.

[The Vice-Chair, Bloc, Martin Champoux]

Thank you, Mr. Myles.

It is now the NDP's turn.

Mr. Julian, the floor is yours for two and a half minutes.

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

Thank you very much, Mr. Chair.

I'll start with a comment. The Financial Times reported, just a few months ago...the headline reads, “Australia’s media thrives after forcing Big Tech to pay for content”. The judgment of what's happened in Australia...there is no doubt it made a big difference in reviving the media sector. I would note that Country Press Australia did a terrific job negotiating on behalf of smaller weeklies right across Australia.

That is a response, I think, to Mr. Jamison's legitimate concern about making sure Alberta papers...and we heard the same from Saskatchewan newspapers. They support Bill C-18, but they want to make sure more newspapers are able to benefit.

The reality is that the question of the principle of this bill.... There is no doubt that all the evidence shows this will make a huge difference for media in this country. Our job, as members of Parliament, is to make the bill better. I reject those around the table who say that the bill is not perfect so we have to oppose it. That's absurd. Our job is to make sure this bill is better.

I haven't yet had an opportunity to ask Mr. Scott, Mr. Millar and Mr. O'Brien.... I would like to compliment the team of CHCH. You do a great job providing news, not only in greater Toronto, but right across the country. Thank you for your work.

Could you take a moment to talk about other amendments this committee should be considering, so we can make Bill C-18 a better bill?

I'll start with Mr. Scott.

[Dr. Ben Scott]

Just briefly, I'll re-emphasize the points I made in my opening comments.

First, I think we have to make sure that deals are equitable for small and large news outlets alike.

Second, we ought to make sure that new revenues are used for the production of news content and not for other business purposes.

Third, we should increase transparency in all ways that are feasible under this legislation: at the very least, mandatory reporting by the CRTC on a more regular basis than annual and, if possible, aggregated market data so that when new deals are struck under the terms of this legislation by news organizations that don't have one yet, they can make informed decisions about whether they're settling for something that is similar to what other organizations are getting.

[The Vice-Chair, Bloc, Martin Champoux]

Thank you, Mr. Julian.

The order that was established allows two more parties to ask questions.

For the Conservative Party, Marilyn Gladu will have the floor for five minutes.

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

Thank you, Mr. Chair.

I would like to thank all the witnesses who are with us today.

Because I'm new to the committee, I want to start with a comment so you can understand where I'm coming from.

To me, freedom of the press is critical for democracy. In communist states, the government controls the media so that it can be sure its propaganda is the only thing people receive. We definitely don't want to see anything like that in Canada, so when I look at Bill C-18, I have a couple of concerns.

I see that here the government is the one that sets the criteria for who the actual media organizations are, and then the CRTC decides which outlets are going to receive the payment. That doesn't sound like freedom. If I see that we're only focusing on general news, then that sort of distinguishes it from targeted journalists, so again I have a concern there.

Let me go to my questions.

My first question is for Google. You mentioned in your opening remarks a term called “undue preference”.

I know that in social media these algorithms are to basically, theoretically, try to help you so that when you're searching for something, you don't have to go through five pages of links before you find something that's actually what you're looking for, but I notice that the language in the bill is trying to prevent discrimination or undue sorting out of organizations. It sounds like those two things are in conflict.

Could you expand on your concern with undue preference?

[Colin McKay]

Thank you for the question.

I think it's worth underlining that I'm here today to discuss, as other witnesses have, amendments that would make this bill better and to ensure that we support journalism in Canada as a society, as well as a company and an industry.

Our primary concern, as I discussed, about undue preference is that it is tied to this framework, and it is tied to an enforcement mechanism through the CRTC that is in effect a challenge to how commercial contracts are conducted and then how information is presented within our products and services.

Through our evaluation, the real threat is that those challenges could come not from well-meaning actors and established participants in journalism in Canada, but from those sorts of edge cases and smaller organizations that may not even be based here but can use this tool to seek the promotion and the raising of their content within the context of how information is presented to our users.