Evidence of meeting #51 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 going.
A recording is available from Parliament.
NDP
Peter Julian NDP New Westminster—Burnaby, BC
The JCPA would do that? You sense that model will help to enhance local journalism, which has been the principle victim of big tech?
Managing Director, Econ One
That's right.
They're going to join the coalition. They're going to show up as one cohesive unit at the bargaining table. This is assuming that we don't reach a voluntary negotiation. I'm very skeptical that we will. There's a period of time in which a voluntary negotiation takes place.
If that fails, then it moves to binding arbitration. At that point, they're going to put forward one number. It's going to be the number of the value contribution by all newspapers collectively for Google and Facebook. Google and Facebook are going to have their opportunity to knock it down and put forward their own counter-studies and experts. The arbitrator will decide whose value is fairest of them all.
It's a long way of saying yes, the smaller newspapers are going to benefit because of this design. We're going to ensure that everyone's coming along. No one can be discriminated against, based on the kind of content they write or the positions they take. They're all coming along. At the back end we're going to have an allocation that is going to be predominantly dictated by the number of journalists you have under your employ.
NDP
Peter Julian NDP New Westminster—Burnaby, BC
Let's talk about timelines.
You did raise the issue of antitrust legislation and going against big tech. You mentioned in your opening remarks 10 years to work through appeals that big tech could bring to stop antitrust legislation. They have with their power the ability to stop up the works for a decade. I think all of us understand the power that big corporations have.
On the timelines around the JCPA and Bill C-18, we're currently discussing the thresholds to make sure that this actually goes through, that negotiations are compelled, there is final offer arbitration and that there is a clear movement. What do you feel are appropriate timelines?
Many have said that there should be shorter timelines of three months for a negotiated period, arbitration, then final offer arbitration. That would all be taking place in a relatively short span of time and it forces big tech companies to actually work in good faith, rather than drawing things out, as they certainly would with antitrust legislation.
How important is it that there are relatively short timelines around negotiation, arbitration and final offer arbitration?
Managing Director, Econ One
I think it's very important. The reason is the dire straits the newspapers are in.
Look, if these guys could make it another couple of years, then maybe we could afford to let this roll out for a year. We don't have years.
What I would say if I could script it is I think each of these break points ought to occur in a span of months. Set up a voluntary negotiation period. Give them a month to try to hammer something out. If they can't, then they move into binding arbitration.
When you go into arbitration, you're going to have to have discovery. There are going to be expert reports written. Google is going to get to depose the expert, presumably, before we get into the hearing room. They have to be on notice as to how your evaluation methodology is going to work. That could take some time. I think that should be a matter of months and certainly not a year. This thing needed to be solved yesterday.
Liberal
The Chair Liberal Hedy Fry
Thank you very much.
Peter, your time is up.
We're going to the second round, which is a five-minute round.
We begin, for the Conservatives, with Kevin Waugh.
You have five minutes, please.
Conservative
Kevin Waugh Conservative Saskatoon—Grasswood, SK
Thank you, Madam Chair.
I'm sitting here smiling because Mr. Singer has no idea what Bill C-18 is all about. It's about the exact opposite of what he's talking about.
The CBC, Rogers and Bell get most of the money. The newspapers get the crumbs. We're not like the United States in this bill. We have pointed that out on this side numerous times. Small and medium newspapers get absolutely nothing.
I'm going to move to you, Mr. Palmer, because you have some recommendations.
I sit here laughing at Mr. Singer, because he has absolutely no idea what this bill is all about. It's not about the newspaper industry in this country. I've said that for months. They're getting crumbs. I believe the local CBC, the public broadcaster, should be excluded from this bill.
What are your thoughts, Mr. Palmer?
President, Internet Society Canada Chapter
It isn't so much that I have views as to whether the CBC should be excluded. My principal concerns are with the extremely artificial circumstances under which the proposed negotiations take place.
The principal danger is that small and local newspapers or news organizations will be left in the wake of negotiations taking place on the part of the large majors—Postmedia, The Globe and Mail, etc.—that have enough resources to be able to pay for the kind of expert studies we're talking about.
The second- and third-level players in the news business don't have that kind of capacity. That's one of the reasons this bargaining process favours the large organizations over the small. I don't think that the bill as crafted will substantially alleviate the situation of community newspapers and regional newspapers.
Conservative
Kevin Waugh Conservative Saskatoon—Grasswood, SK
I think we heard that from Google. They already have 150 agreements, and I'm sure they don't have any agreements from the small or medium newspapers in this country. I think you would agree about that.
We've been harping on this side for months that not only Alberta and Saskatchewan, but I'm going to say a lot of newspapers in Ontario, Quebec, the Maritimes and even B.C., where Mr. Julian comes from, are excluded from this.
I have a note here from CACTUS, the Canadian Association of Community Television Users and Stations, that says they're almost going to be excluded from this bill.
There are so many exclusions in this bill that it's going to take days to get the amendments needed to make this bill even half-presentable when we do work this thing out.
What are your thoughts?
President, Internet Society Canada Chapter
I think that's a serious problem. I think that, for instance, the approach that Mr. Singer's discussing in the United States, where all newspapers and news organizations are sort of forced into a collective and distributed that way, is a good deal more susceptible to positive outcomes than is the model in C-18, where large organizations can put themselves forward and force a collective agreement on news intermediaries without including the smaller players who have to then try to find experts, lawyers, etc., to support a bargaining process. I think that is very difficult.
Conservative
Kevin Waugh Conservative Saskatoon—Grasswood, SK
Ms. Gardner, I have little time, but I have real concerns about journalism in this country. I look at journalism schools, and I've seen half the amount of enrolment in the last five years, whether it's due to COVID or whether it's simply due to there being no future in journalism.
You used to be a journalist. I'd like to ask you about the state of journalism in this country as you see it.
McConnell Professor of Practice (2021-22), Max Bell School of Public Policy, McGill University, As an Individual
It's appalling. It's terrible. I don't think anybody is arguing differently.
The state of journalism in this country.... I lived outside Canada for 11 years, and I returned about a year and a half ago. The Globe and Mail is a brochure now. The institutions, even the ones that still exist, are hollowed out versions of their former selves. They're memories of what they used to be.
That doesn't speak to the local situation, which is worse. There are news deserts now.
Liberal
The Chair Liberal Hedy Fry
Thank you very much, Kevin. Your time is up.
I'm going to the Liberals and Tim Louis for five minutes.
Liberal
Tim Louis Liberal Kitchener—Conestoga, ON
Thank you, Madam Chair. I'm going to address all the questions through you.
I thank the witnesses for being here. I appreciate it, whether it's in person or online.
I'll start with Mr. Singer.
The last round of questions addressed the fact that they believe you don't understand this legislation. I thought it only fair to give you a chance to respond to that.
Managing Director, Econ One
Well, I am here as an expert on the U.S. legislation, which I helped craft. I'm trying to impart some experience and some wisdom that I've learned in the process in the U.S. I don't hold myself out as an expert on the Canadian legislation. My understanding is that, on many of the tactics and aspects of the bill, it has a lot in common.
I would note that we allowed broadcasters to come in as well, although broadcasters in the U.S. don't have the same set of protections as those of newspapers. I would submit respectively that a number is going to be introduced by the coalition of newspapers, and that number is going to be the value that the newspapers contribute to each platform respectively, regardless of what the publishers put forward. So the publishers are going to go after a pod of money based on what they think they're going to be contributing at the margin, the broadcasters are going to have one pot money they're going to go after, and the newspapers are going to go after another pot.
I would submit that we shouldn't try to figure out which coalition is going to get more relative to the other. Instead, we should figure out how we get money into the hands of news publishers and how that money is allocated fairly in proportion to the quality of journalism they're putting forward.
Liberal
Tim Louis Liberal Kitchener—Conestoga, ON
Thank you.
Here in Ontario, we had municipal elections last week. It was a clear example of how important local journalism is. Leading up to the election, our community turned to our journalists for the information on local candidates, important issues and election results. Canadians want to see our local stories told. We're not defending the newspapers as simply pieces of paper that are bundled together and tossed in our driveways. We're talking about legislation that supports the local media outlets themselves.
Dr. Singer, some have claimed that addressing this market imbalance, which is clear, between the tech giants and media outlets will somehow stifle innovation in the news sector. Can you speak to that claim?
Managing Director, Econ One
Yes. I think it would do the opposite. If you infuse these local newspapers with cash for the first time, this access fee that would be negotiated, I think the very first thing they'll do is turn around and invest in journalists. We've seen this happen in Australia.
Second, they're going to be incentivized. If you do the award correctly, they will be incentivized to grow their jobs in the news business, because doing so will mean that they will get a bigger slice of the pie at the next round of the allocation.
So I think they have private incentives to want to grow output and do quality journalism with an infusion of cash that comes in, but if you get this incentive right, when it comes to the allocation award, you can hyper it. You can make them even more sensitive to this duty, to this social obligation, to go out and hire journalists. That's what we want them to do. I feel that a smart, intelligent allocation design can get us there.
Liberal
Tim Louis Liberal Kitchener—Conestoga, ON
I appreciate that.
Maybe I'll take the flip side of that. When you testified in the States, you talked about, if this legislation didn't happen, the resulting underemployment in journalism, which could cause less accountable local governments, a greater spread of partisanship, a greater spread of misinformation, a hurting of the local economies and even a reduction in the diversity of viewpoints.
Can you explain the importance of how we need to get this done quickly, because the consequence of not doing this is what happened with local journalism?
Managing Director, Econ One
Yes. In longer pieces that I've written, I've come across huge literature that shows what happens in communities after they lose their local newspaper. You've hit on all the things. Employment is the obvious one, but even beyond that, what local newspapers are doing is keeping the communities together and binding them. They create wonders for democracy. A whole host of social ills occurs when a town loses its local newspaper.
I mean, everything should be done to try to breathe life back into local newspapers. Ms. Gardner talked about a subsidy. That is one way to do it, but to me, if you find the culprit, if you find the person who's sucking out the value and taking it off the backs of the newspapers, it just makes sense that they ought to write a cheque back for the value they're appropriating. Why involve taxpayers? When it is clearly an appropriation of value from one big buyer away from a small supplier, it doesn't make sense to bring taxpayers into that equation.
Liberal
The Chair Liberal Hedy Fry
Thank you very much, Tim. Your time is up.
I'm going to Martin Champoux.
Martin, you have two and a half minutes, please.
Bloc
Martin Champoux Bloc Drummond, QC
Madam Chair, I believe we're starting the second round and you need to recognize the Conservatives first, if I'm not mistaken.
Liberal
The Chair Liberal Hedy Fry
No. We're in the second round. After Mr. Louis will be you, then Mr. Julian, then the Conservatives and then the Liberals.
Bloc
Martin Champoux Bloc Drummond, QC
You're quite right, this is my two and a half minute turn. I'll gladly take it. Thank you very much. It was me who got mixed up this time.
Mr. Palmer, you submitted a brief to this committee a few days ago. In it, you talk about alternatives to Bill C‑18. One thing you mention is creating a fund, which I imagine would be taken directly from the reported revenue of businesses. That would restore balance, depending on the needs of the market.
How do you see a fund like this being viable, given that we have a government that tends to encourage tax avoidance and the use of tax havens by big corporations instead?
Aren't you concerned that the web giants are not actually reporting the revenue they generate in Canada?
Wouldn't this open the door to endless litigation over how much money could go into this fund?
President, Internet Society Canada Chapter
Madam Chair, this is a key question. I think there are a number of actual benefits to a fund as opposed to a regulatory approach.
The first one, which will save an immense amount of litigation, is that the raising of revenue is clearly a federal power. It is not clear at all that the federal government has regulatory authority over Google and Facebook. In fact, my opinion would be the contrary, so I think you're on safer constitutional ground. It avoids, say, four years of litigation to get to the Supreme Court of Canada.
Second, it means that you can bring into the fold all of the groups who are deserving at once. You're not reliant upon the major newspapers, say, or news organizations getting together, going into the bargaining process on their own behalf and leaving out all the small players that don't have the resources to fully compete in a bargaining process.
I think a levy or a fund of some kind is actually a very attractive alternative to this kind of process.