Good morning.
News Media Canada represents about 550 news titles across Canada, from independent weekly community newspapers to large urban and national dailies.
Since I last appeared before this committee, the advertising market in Canada has continued to remain very challenging. Simply put, too many ad dollars are being scooped up by Google. Last year, a U.S. Federal Court judge ruled that Google, which operates in all three areas of the market—the buying, the selling and the ad exchange itself—illegally monopolized the ad tech market through anti-competitive conduct.
News publishers fully embrace and support the responsible and ethical use of artificial intelligence. At the same time, despite deploying bot blockers, we are seeing the theft of our intellectual property on an industrial scale. Companies like Google, Microsoft, OpenAI—which is familiar to all of you because of their employees' failure to alert authorities prior to the Tumbler Ridge incident—Perplexity and even Canada's Cohere are ingesting, repackaging and distributing copyright-protected content directly from published news articles.
These companies aren't just providing snippets that one would find through a traditional search. They're providing very detailed summaries and passing them off as their own creation. They're depriving news publishers of audience, subscriptions and advertising, and are thus capturing the value journalism depends on for its survival.
Moreover, Google, which is dominant in search, has embedded AI-generated summaries directly into its search interface without providing publishers with an effective opt-out mechanism. If publishers want to block Google's AI crawler, they find themselves de-indexed or unable to attract traffic to their sites.
News is an essential input to the knowledge economy. It helps people, businesses and investors make better, more informed real-time decisions. It's also a necessary input for the output of AI companies, but the value transfer cannot be asymmetrical. The user needs to pay the creator. The content theft by AI companies must stop, and government can help.
First, Public Services and Procurement Canada and Treasury Board can work together to ensure that those on the government's list of artificial intelligence suppliers—there are a hundred and some odd companies on that list—sign a supplier agreement that states they will use our material ethically, with a commitment to the principles of transparency, consent and attribution with respect to all copyright-protected source content.
Second, the industry minister can ask the Competition Bureau to look into the state of competition with respect to search and AI. Googlebot should be split into two crawlers, one for AI and one for search. That would help level the playing field between publishers and Google and between other AI companies and Google. Those companies have no incentive to sign commercial agreements with publishers when Google's AI services are getting the content for free.
Third, the Copyright Act should not be amended to include a text and data mining exception or be weakened in any way. Rights holders must be protected, with no exceptions.
On the positive side, the Online News Act, while imperfect, is working for Canadian news publishers. Prior to the act, and in an effort to thwart it, Google and Meta did content licensing deals with a number of news publishers. Most of our members, however, were left out in the cold without a cent. Today, whether you're a large publisher or a smaller independent, you're getting about $16,400 per year, per full-time journalist. For example, the World-Spectator from Moosomin, Saskatchewan, received almost $80,000 last year. Prior to the Online News Act, most of our members never saw a dime in content licensing from these big American tech firms.
Between the Online News Act and the Canadian journalism labour tax credit, which rewards those who maintain and grow journalism jobs, there's finally a level of predictability for business planning, which is translating into a level of stability in many newsrooms, where we are seeing investment after years of cost-cutting. Both of these measures should be maintained.
Let me turn briefly to government advertising. Despite the government's stated buy Canadian policy, changing its agency of record and spending tens of millions of dollars each year, news publishers are not seeing any meaningful federal government ad dollars, yet when a bank, a retailer or a car company runs a national or regional campaign, news publishers do okay. That's because their chief marketing officers know that we are a great way to reach and engage Canadians.
Why are we only seeing micro pennies on the dollar when it comes to federal campaigns? It's simple: The government's agency of record is doing what is easiest and most profitable for them, and that's programmatic advertising through American big tech firms.
We hope the committee will recommend an advertising set-aside, which you heard about earlier. An ad set-aside done right.... On the publishing side, for example, we reach 86% of Canadians who engage with newspaper content each week.
It's time for the government to think more like a marketer who cares about reach and efficacy. We can help you reach engaged audiences better than anyone. For advertisers, whether they are governments or the private sector, credible journalism strengthens trust while delivering better business results in a brand-safe environment. There's absolutely no reason the federal government shouldn't use Canadian news brands to inform Canadians.
We live in an era of disinformation and misinformation, which are amplified by algorithms. Facts matter. High-quality information produced by real people who do the work of gathering and verifying facts, as well as legal review, is paramount.
Thank you. I look forward to our discussion.