Hon. Pamela Wallin moved:

That the fifth report of the Standing Senate Committee on Banking, Commerce and the Economy, tabled in the Senate on Wednesday, February 15, 2023, be adopted and that, pursuant to rule 12-24(1), the Senate request a complete and detailed response from the government, with the Minister of Finance being identified as minister responsible for responding to the report.

She said: Honourable senators, the tabling of this report was very timely because our country is going through a period of rapid inflation, with drastic rises in the cost of living, and our report shines a light on the series of decisions and circumstances that led us here and how we can do better to avoid this in the future. The testimony from various economists and from the Governor of the Bank of Canada himself has put into sharp relief that the state of our economy is troubling, and concerning what should be done in the future. We as a committee put in a great amount of time and work on this file, and therefore, that is why we hope the decision makers will take serious note and respond. Thank you.

Hon. Pamela Wallin, Chair of the Standing Senate Committee on Banking, Commerce and the Economy, presented the following report:

Tuesday, March 7, 2023

The Standing Senate Committee on Banking, Commerce and the Economy has the honour to present its

SIXTH REPORT

Your committee, to which was referred Bill C-228, An Act to amend the Bankruptcy and Insolvency Act, the Companies’ Creditors Arrangement Act and the Pension Benefits Standards Act, 1985, has, in obedience to the order of reference of December 14, 2022, examined the said bill and now reports the same without amendment but with certain observations, which are appended to this report.

Respectfully submitted,

PAMELA WALLIN

Chair

(For text of observations, see today’s Journals of the Senate, p. 1281.)

Hon. Pamela Wallin: Honourable senators, today I pay tribute to the people who, against all odds, try to keep the voice of their community alive. However, after more than a century in business, the Wadena News has had to close its doors. It’s the latest casualty, but it won’t be the last.

Community papers are particularly disadvantaged because they must compete with larger, well-subsidized players who can capture bigger audiences, charge more for ads and attract government help.

The federal government has long ignored the power of community newspapers except when there is a crisis or a federal election. They might well remember that nearly 8 out of 10 Canadians still read their community newspaper — the hard copy. But governments have stopped advertising in these papers, then turned around and offered subsidies to larger competitors.

To quote Alison Squires, the last publisher of the Wadena News:

Newspapers don’t want subsidies, but if Maclean’s magazine gets $1.5 million, then those who are at the grassroots of their communities recording local history as it happens, sitting in council meetings and following the local hockey scene should get a cut as well.

She went on to say, “. . . but we would rather have the advertising.”

They are businesses and they are looking for a level playing field. When you buy an ad, you are paying for a service and getting your message out. When you offer a subsidy, you are buying — or trying to buy — favour.

If the government really wanted to help our local papers, it would do better to get out of the way and buy an ad. It would be a more genuine expression of support, and it would also show an understanding of community when you make a point of speaking to people where they live.

I am proud to have presented the paper with the Queen’s Diamond Jubilee Medal for service to community. They are deserving. These papers are the connective tissue of our communities. Their archives that tell our story will be lost — the births, the deaths, weddings and anniversaries, good crop years and bad, the successes of our sons and daughters, and the impact of policies dreamed up in that faraway place called Ottawa.

I would like to thank Alison Squires, her father Bob, Jim Headington and Ethel Keele who built the paper. They were people of and for their community.

And to all those who have contributed and supported this paper over the years, thank you for 115 years of service to your fellow citizens, thank you for reporting our stories and thank you for taking up the task of writing down the first draft of our local history as it happened each and every day in our hometown. Thank you.

Hon. Pamela Wallin: Honourable senators, I rise today to speak to Bill C-18 with a genuine concern about what it means for the free exchange of ideas and open debate in this country.

The online news act, as proposed, will restrict access to and the amount of news we can read and consume in this country. The government not only wants to decide what we watch and read — as we saw in Bill C-11 — but will now force foreign companies, through Bill C-18, to fund some Canadian content, but not all. Again, limiting choice and sources.

Ottawa’s online reform crusade is, simply put, government regulation of content, which risks not only the independence of the media but also limits what you and I are able to read or hear about the events in our communities, country and around the world. For these reasons and as someone who believes in free speech and choice, I am fundamentally opposed to a bill that limits my right to inform myself.

The government argues this bill is intended to provide an adrenaline boost to a struggling legacy industry. But at what cost? In essence, the government is forcing companies to enter into contracts that will take money from large foreign platforms such as Google or Facebook and use that to fund broadcasters and publishers here in Canada — primarily the large legacy players. In response, Facebook and Google have threatened to simply pull all the news content off their sites, and that means preventing us from sharing content with others that we think is interesting or important. This bill ends up punishing us.

It’s actually even worse than that because by forcing companies to pay for links — the way we click through to a larger story — it will also be a disaster for smaller independent outlets who have grown and survived by sharing their work through those links on those platforms at no cost.

My local newspaper, as you heard me comment on earlier, has just gone under. Yes, technology has changed the game, but these small entrepreneurs want business — not subsidies — and they survive by sharing their content for free online.

This bill will limit the ability of these small struggling players to use the internet to attract subscribers. The irony of the government’s approach is that the big legacy newspapers and broadcasters, in whose interests they are supposedly doing this, need the platforms even more. They, too, need more eyes on their content as viewership and subscriptions continue to dwindle.

As for Ottawa, the self-interest is obvious. Force the platforms to pay so they don’t have to be seen to be handing out the cash, which, of course, risks the charge that they are buying favour from the media. Just to remind you, the government has been funding and backstopping ailing entities, including those that cover Ottawa politics.

The government says platforms like Facebook benefit financially from sharing news stories or links, so they should pay. The platforms counter with some numbers, pointing out that news accounts for a very small portion of their online activity, approximately 3% for Facebook, and express that they don’t even place ads on shared news because most users don’t want to see them. So it’s not a big revenue stream.

Regardless, what the government seems not to understand — or doesn’t want to — is that platforms are a free online space provided to everyone, including the media. People can share content, and that obviously benefits the content creators in this country.

Of course, many people these days want to consume their news online, and free platforms provide a nearly limitless source of information. Therefore, without these platforms, smaller operations will likely continue to cease to exist — like the Wadena News — and it would become increasingly difficult to break into the industry with some new online product and compete against the established and already well-subsidized players.

The larger media organizations already have an advantage. They can put up a paywall around their articles, so even if a link is shared on a platform, the article is still blocked to those without a subscription. With Bill C-18, they get to have their cake and eat it too: subscription fees from consumers and subsidies from big tech.

With Bill C-18, Ottawa is playing a bit of a risky game of chicken. Here is why: Big tech companies such as Google and Facebook have faced this kind of legislation in other countries. Canada is such a small market that walking away from doing business here hurts us far more than them.

We are also risking trade retaliation from allies and partners, namely, the United States. Bill C-11 was deemed protectionist and possibly in violation of the North American Free Trade Agreement, or NAFTA, and Bill C-18 will be no different. We are forcing companies to negotiate contracts that will take money from foreign sources to fund Canadian broadcasters and publishers. This is, of course, nothing short of a backdoor subsidy without the government’s fingerprints on the money.

The very idea that we would demand money from American corporations to prop up our national broadcaster, among others, is shocking. Could you imagine our reaction in this country if the U.S. passed a law forcing Canadian companies to shell out millions of dollars to support ailing American media companies simply because they needed more money? This is embarrassing.

The Parliamentary Budget Officer has said that this will cost big tech hundreds of millions of dollars because the bill puts no real cap on potential costs, and the list of those eligible for funding has grown, including hundreds of local campus and Indigenous broadcasters.

As we know, when one country imposes this kind of taxation, it is an inconvenience, but if many countries want to buttress legacy media with money they haven’t earned, it becomes a costly precedent. It is no wonder that the big players such as Facebook or Twitter have threatened to block news sharing.

You can see why the cost-benefit analysis of keeping the news on these platforms if this bill passes will not be worth it. It will just be easier for these companies to shut it down. The platforms’ losses would be negligible, but the damage to the news-sharing process would be devastating and the Canadian consumer would be the real collateral damage. As my colleague Senator Simons says, it is as if those who wrote this bill had never used the internet.

If it weren’t obvious already, government should not be interfering with what and how we all consume information. As an old comedian, Tommy Smothers, once said, “The only valid censorship of ideas is the right of people not to listen.”

The natural marketplace of ideas allows creators to offer their wares and allows consumers to choose. We subscribe to publications we like, we watch channels we enjoy and when we don’t, we shut them off or cancel our subscriptions.

Let’s keep government out of this process, let’s try to keep the media more independent and let’s keep Canadians informed about their world.

Thank you.

(On motion of Senator Clement, debate adjourned.)

On the Order:

Resuming debate on the motion of the Honourable Senator Cotter, seconded by the Honourable Senator Woo, for the second reading of Bill C-22, An Act to reduce poverty and to support the financial security of persons with disabilities by establishing the Canada disability benefit and making a consequential amendment to the Income Tax Act.