Hon. Donna Dasko: Senator Gold, Bill C-18, the Online News Act, received Royal Assent on June 22 of this year, and regulations were gazetted on September 2, with consultations closed on October 2.

Canadians are no longer able to view or share news content on Facebook and Instagram, including news articles and audiovisual content that parent company Meta has blocked. Search engine Google has threatened to do the same, and a report yesterday in The Globe and Mail suggests this may happen soon.

My first questions concern Google. Has the government engaged with Google, including at the ministerial or departmental level, regarding Bill C-18? Did Google participate in the consultations? Most importantly, is the government contemplating changes to the legislation or other responses to deal with these latest developments?

Senator Dasko: In September, the polling firm Leger surveyed Canadians about aspects of Bill C-18 and found that 59% of Canadians want Meta to lift its ban on Canadian news on its platforms. More specifically with respect to Meta, is the government still attempting to engage with Meta? Has the government engaged with Meta regarding that company’s decision to block Canadians from viewing or sharing news content? Or has the government basically given up on Meta?

Hon. Donna Dasko: Honourable senators, I rise today to speak to Bill C-18, the online news act, at third reading.

The news media business in Canada is in trouble, and Bill C-18 is designed to be part of the solution.

Many news organizations, particularly newspapers, are in dire straits. A 2021 Statistics Canada report surveying newspaper publishers in Canada revealed that operating revenue of Canadian newspaper publishers declined to $2.1 billion in 2020, down 22% from just two years earlier, in 2018.

Declines in revenues have led to closures and job losses; over 469 news outlets have closed from 2008 to 2022, including over 300 community newspapers, and one third of journalism jobs have disappeared since 2010.

Just yesterday, Bell Media announced the elimination of 1,300 jobs, mostly affecting their news operations, including nine radio stations and foreign bureaus.

The other side of this picture is that the internet has increased its share of advertising revenue as that of newspapers and other media has declined. Government background documents estimate that Google’s and Facebook’s revenues from digital advertising were $9.7 billion in Canada in 2021, which was 80% of the total digital ad revenue of about $12 billion.

Bill C-18 aims to fix the balance. The rationale behind the bill is that news organizations are not getting fair compensation for the news they produce from the digital platforms that distribute this news to the public.

Bill C-18 requires that major digital platforms make deals with news businesses to pay these businesses for information that is shared on their platforms.

Bill C-18 lays out the framework behind these deals. If voluntary deals are made between digital platforms and eligible news media within certain timelines that meet certain criteria, digital platforms would be exempted from the required portion of the act, which is to enter into a formal negotiation process that could lead to final offer arbitration. The CRTC will take the role in developing a code of conduct to guide the bargaining process and determine if agreements reached meet the conditions for exemption, among other roles it will take on.

Bill C-18 is a complex bill, and it needed fulsome study. We had a good process at committee, but I feel we needed to do more.

Bill C-18 came to this chamber at first reading on February 2. We heard the sponsor’s speech on February 7 but did not hear the first witnesses at our Transport and Communications Committee until April 25. From February 7 to April 25 is a very long time at second reading during sitting weeks, which, in my view, should have been spent studying the bill at committee. Our 10 meetings might easily have expanded to 13, 15 or even more meetings. Let’s compare our 10 meetings to the 31 meetings we had on Bill C-11, the Online Streaming Act, and I’m not saying we should go there, but that bill was a similarly complex communications bill. I feel we needed more time on Bill C-18.

I want to focus on some of what we learned at committee and where I see issues going forward that we were not able to examine.

Our nine meetings with witnesses — of course, we had one meeting for clause-by-clause consideration — focused primarily on the views of stakeholders. From our 60 witnesses, we learned that Bill C-18 has widespread support, particularly across the newspaper sector, including large and small organizations, as represented, for example, by News Media Canada, but it also has significant support among broadcasters such as the Canadian Association of Broadcasters. It has strong support among online publishers and multicultural media.

However, the two digital platforms, Google and Facebook, which would now qualify as the operators responsible for making deals with news organizations under the act, are aggressively opposed. During the period of parliamentary review of the bill, both companies launched “market studies” which involved blocking access to news on their platforms to some of their users and subscribers. While market studies are legitimate, and I can say this from 30 years in this industry, the timing of these studies was provocative, to say the least, and is rightly seen as a shot across the bow at the government and at the news industry in this country. Minister Rodriguez described these actions as threats, and even the Prime Minister weighed in, accusing the companies of using bullying tactics and saying that the federal government would not back down.

When both tech giants appeared as witnesses at committee on May 3 and were asked how they would respond if the bill were to pass in its current form, Google Vice President of News, Richard Gingras, did not want to speculate. He replied:

We’ve been clear on the considerations we have, which is to do with whether we need to assess how we use links or whether we need to assess whether it is logical for us to continue to provide a service like Google News . . . . I have no certainty right now as to what we might do.

Facebook, however, was categorical. Rachel Curran, Head of Public Policy for Meta in Canada, stated:

Because the legislation ignores the realities of how our platforms work, the preferences of people who use them and the value we provide news publishers, we have no choice but to comply with it by ending the availability of news content in Canada if Bill C-18 is passed as drafted.

We have two very large, very powerful, very angry foreign‑owned tech giants required by law to negotiate with way smaller Canadian firms. What could possibly go wrong?

Some have debated whether the company’s threats to leave are real or, in fact, a bluff. But if they are real, there is reason to be concerned. That is because we also learned at committee about how many news publishers rely on these platforms for their own business operations and successes.

Jeff Elgie of Village Media told us:

. . . we benefit greatly from the traffic back to our sites that we, in turn, are able to monetize and form new audiences, subscribers and followers that we would otherwise be challenged to reach. . . . Google and Facebook combined generate almost 50% of our traffic on an ongoing basis. . . . You will find similar numbers across our entire industry, legacy or new.

If that traffic were to be lost, the business would be over.

This sentiment was echoed by journalist and commentator Jen Gerson, who stated at committee that independent media, start-up media and media trying to build its brand in the marketplace are reliant on social media to build a brand, develop an audience and get a network across. The loss of Facebook, she believed, would be serious.

The policy framework behind Bill C-18 emphasizes that news organizations are not getting fair compensation from the platforms, but how will these realities figure in the negotiation process?

If we had those extra committee meetings I mentioned earlier, we could have invited more experts to dig deeper into the policy framework to understand how it works and its possible contradictions, and we might have been able to offer solutions. For example, how does the need for commercial deals, which must be negotiated privately, square with the regulatory requirements such as the transparency demands? We know that those transparency demands will increase. It seems pretty clear to me. What will be the impact of this policy on the internet, and what will be the impact on innovation? Does the long list of requirements that must be met for exemption, which go beyond fair compensation, create an undue burden on the commercial negotiation process as claimed by witness Philip Palmer of the Internet Society?

There were some other concerns: Our committee didn’t look at advertising or consumer behaviour even though the movement of advertising and consumers onto platforms, social media and search engines is central to these developments. How will news consumers be impacted by this policy? These are all important issues going forward.

As I said earlier, our committee did excellent work in the time we had, passing nine substantive amendments in one meeting. These have already been described by Senators Harder and Housakos, so I will not attempt to go through them.

I am pleased the amendment I proposed, which would remove the ability of the Canadian Radio-television and Telecommunications Commission, or CRTC, to designate news businesses as eligible, was accepted. The news businesses should decide for themselves if they wish to apply and be part of this framework.

Colleagues, I love the news media, and it is painful to see what’s happening to the news today. I deplore the threats of the tech giants. I feel that despite its flaws, Bill C-18 is our only hope at this particular moment in time to help this industry, which is vital to our democracy. If all the pieces fit together and if all the players do their part, it could be a wonderful thing. It could be a wonderful assistance to this industry. That is why I intend to support it today.

Thank you.

Senator Dasko: Excellent introduction. Thank you for your comments, Senator Manning. I wonder how you would respond to the fact that the top three sources of news for Canadians off-line are the same three sources of news for Canadians online. What, in fact, has happened is that the revenue that went to the off-line organizations has now shifted to the platforms where Canadians go online. Essentially, Canadians are still using and still interested in what we might call the traditional media, but they are accessing these media increasingly online and not getting the revenue for it.

I wonder what your response to that would be. It’s not as if Canadians are abandoning traditional media. Of course, online, they can get a lot of other sources, but they’re still accessing those same sources online for news.

Hon. Donna Dasko: Honourable senators, I rise today to speak to Bill C-18, the online news act, at second reading. I take a great interest in this bill. I have loved newspapers from an early age. I grew up with the Winnipeg Free Press, which has just turned 150 years old, and I added a whole set of papers to my must-read list in later years. During my career in the public opinion business, I had the pleasure of working with The Globe and Mail to lead their first-ever public opinion polling program. As well, later, I led many years of polling assignments for the CBC. So I learned a few things about journalism and the media business along the way.

Now, as we turn to Bill C-18, we learn that the news media business is in trouble and that the government has come to fix it. The rationale behind Bill C-18 is that news organizations are not getting fair compensation for the news they produce from the digital platforms that distribute this news to the public. Thus, Bill C-18 would require that major digital platforms make deals with news businesses to pay them for information that is shared on their platforms. The news businesses involved include online news outlets, newspapers and news magazines, public and private broadcasters and local businesses that publish original online news content.

Although no platforms are mentioned specifically, it appears that Google and Facebook would be the eligible platforms according to the criteria laid out. If voluntary deals are made between platforms and news media within certain timelines that meet certain criteria, digital platforms would be exempted from the required portion of the act, which is to enter into a formal negotiation process that could lead to final offer arbitration. The CRTC will take the role in developing a code of conduct to guide the bargaining process and determine if the agreements that are reached meet the conditions for exemption, among other roles that it will have.

This is a complex bill. After sifting through government documents, reading media clippings and talking to stakeholders, I can best analyze it by dividing it into two parts: the parts that make sense to me and the parts that leave me with a whole lot of questions. Much of the stated context and background makes sense. Two assumptions are especially relevant. First, news media are an essential component in a democracy and, second, technological change has changed the way that news is consumed and distributed in this country, which has left Canadian news media in a vulnerable state.

Democracy depends on free and fair elections, an independent judiciary, the rule of law and a free and independent media. With democracies around the world under threat, I think we have to be more vigilant than ever about our democratic institutions. A free and independent media is vital to inform, investigate, analyze and engage Canadians in the public space. The second assumption is a familiar one: that digital technology has changed the media in this country forever.

Let’s start with advertising. A 2021 Statistics Canada report surveying newspaper publishers in Canada revealed that the operating revenue of Canadian newspaper publishers declined to $2.1 billion in 2020 — down a full 22% just from 2018. Declines in revenues have inevitably led to closures and job losses. Over 469 news outlets have closed from 2008 to 2022 — including over 300 community newspapers — and one third of journalism jobs have disappeared since 2010.

The other side of this picture is that the internet has increased its share of advertising revenue as that of newspapers and other media has declined. In 2005, the internet held only about 8% of the market share of all advertising revenue in Canada. By 2015, the internet share was 37% while all other categories had dropped, especially daily newspapers, which fell from 26% to a 12% share in 2015.

Government background documents estimate that Google and Facebook revenue from digital advertising was $9.7 billion in Canada in 2021, which was 80% of the total digital ad revenue of about $12 billion.

It’s no mystery as to why advertising has shifted to internet platforms. That’s where the consumers have gone to find, read and share news. The online environment today includes a vast array of choices, including new media, traditional media and social media.

When it comes to consumers, it’s important to understand that Canadians are still very interested in news and have not abandoned traditional news sources even as they have gone online to get this information. According to a Maru survey conducted last year, 86% of Canadians access news every day. According to a Reuters survey of 46 countries, 77% of Canadians used the internet in the last week as a source of news. In this study, the top sources for news are essentially the same whether consumers are online or offline. For English media in Canada, the top sources are CTV, CBC and Global News. For French media, they are TVA and Radio-Canada. Still, the study shows that while 56% of Canadians watch actual television news during the week, only 16% read an actual print newspaper.

With regard to consumer behaviour, a 2022 Abacus survey of Canadians commissioned by Google shows that 64% of Canadians say they use Google to find and access news at least a few times a week, and 41% use Google daily for news. This finding strengthens the case for the importance of platforms as a source of news for Canadians.

Now, as an aside, I wish that the government had included more in-depth analysis of consumer behaviour in its development of the bill, but I will leave that topic for another day.

I think a strong case can be made that Canadian media need assistance to carry out important democratic functions that have been weakened by years of revenue losses. I feel that a public policy response is justified for this reason. However, this is where my questions about Bill C-18 begin.

Let’s start with the choice of this policy framework. I want to know more about why the government has chosen this particular response rather than modifying or developing existing policy tools which are more familiar to this industry. Creating a fund to assist organizations, for example, like the Canada Media Fund, would have been more straightforward. Instead, the profitable platforms will be required to compensate the news sources directly through a very unfamiliar process.

Other questions are raised with respect to the eligibility of news businesses. Our colleagues in the other place, through amendment, have greatly expanded the number of media organizations that will be eligible to participate in this policy from about 200 to more than 650. It’s a positive development to include smaller and more diverse organizations, but this also raises questions. Will all of these organizations practise real journalism with true news content and journalistic practices? What body will investigate this, if at all?

It also appears that organizations will not need online content to be eligible. If this is the case, how can digital platforms benefit from their content for purposes of payment? That’s the purpose of the bill in the first place. Also, if we’re tripling the number of organizations, will this mean less support for everyone in the end or will the platforms have to pony up more dollars?

Another question relates to the basis of negotiation between the parties, that is, between the platforms and media organizations. What are the considerations? The government has relied strongly on the concept of fair remuneration. It wants to ensure that major digital platforms fairly compensate news publishers for their content and enhance fairness in the Canadian digital news marketplace, backstopped by the Canadian Radio‑television and Telecommunications Commission, or CRTC, and arbitration.

The term “fairness” is used repeatedly in its communications, but what does this mean? We know that news organizations themselves receive significant value from the distribution of their content, so how, if at all, does this figure into it? In the end, is remuneration based only on measures of the media organization and, if so, which ones? The volume of its online content? The size of its online audience? A percentage of its expenditure on news content? It has been suggested 20%. Another suggestion is 30% to 35%. Is remuneration based on platform measures such as the volume of online activity of the organization on the platform or on the revenues of the platform? I think we need a greater understanding of this process since it directly affects outcomes and the achievement of policy goals.

I have further questions about the feasibility of negotiations. How will small regional newspapers hold their own in the high stakes bargaining that will take place under Bill C-18? In the end, will the big legacy companies come out the winners at the expense of others?

Colleagues, there is more. The platforms are supposed to:

. . . ensure that an appropriate portion of the compensation will be used by the news businesses to support the production of . . . news content.

I want to understand how this is supposed to be implemented.

Many other questions are relevant, but, in the end, I would ask whether this policy initiative will be the saviour of this industry. I hope that we can find some answers to these and other questions at committee.

There are many good elements of Bill C-18. It enjoys the support of stakeholders across the media industries, including many large and small newspapers, broadcasters and more. I also see support from the Canadian public for some of the principles of this bill.

For example, a poll conducted last year by Pollara for News Media Canada shows that 79% of Canadians agree that Google and Facebook should have to share some of the revenue they generate from Canadian news content with the Canadian media outlets that produce the stories.

On the topic of polls, that Abacus Data poll conducted for Google, which I mentioned earlier, shows that two thirds of Canadians don’t want Google Search to change the way it operates when Bill C-18 comes into effect. Yet, we have just seen Google two weeks ago blocking news content in a test run related to this bill. This company is doing exactly the opposite of what Canadians want, according to the company’s own polling.

Colleagues, there is never a dull moment working on these files, and never a dull moment on our Senate Transport and Communications Committee. Clearly, there are many important issues and questions which need examination with respect to Bill C-18. I look forward to the several weeks of study and debate at committee and here in our chamber where Bill C-18 will receive the sober second thought it so clearly needs.

Thank you, merci.