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Opinion: Canada desperately needs a thoughtful news industry policy. Bill C-18 is far from it

Commentary

Legislative overreach and political belly-bumping may make for compelling cultural drama but neither is going to resuscitate the nation’s struggling news industry.

We refer to recent developments in the passage of the poorly conceived and dreadfully structured Online News Act (Bill C-18), currently being examined by the Senate. It forces web giants such as Google and Facebook to reach commercial deals with designated news organizations (mostly newspapers and broadcasters) to pay them for facilitating linkage to their news.

On Friday, Facebook/Meta announced that if Bill C-18 is unamended it will no longer accept links to news stories.

“A legislative framework that compels us to pay for links or content that we do not post, and which are not the reason the vast majority of people use our platform, is neither sustainable nor workable,” Lisa Laventure, a Meta spokesperson, told the Globe and Mail.

This week, Google will complete a series of tests aimed at a similar retreat from facilitating access to news through its search engine. It was excoriated by members of the House of Commons Heritage Committee on Friday for doing so.

In October, Meta wasn’t even invited to appear before the Committee until it mentioned the possibility of taking the position it now holds. When it did subsequently appear, it was apparently as a prop for a tech-lash grandstanding. Certainly, members of parliament should ask hard questions, but MPs on this committee too often confuse that duty with crude and cringeworthy cross-examination that eschews understanding and builds animus.

The web giants’ key concern is clearly the unlimited and unpredictable financial liability created by Bill C-18 in concert with grandiose preliminary demands from the broadcasting sector. Not to mention the international precedent that conceding to Canadian legislation would set.

While both companies are immensely profitable, each has recently reduced its workforce and there is no reason to think either is bluffing in taking this posture. Google, for instance, has taken similar action in Spain and since December has turned off the display of news snippets in Czechia.

The whole concept underlying this Act is wrong. Linking is free and being linked to benefits both newsmakers and online intermediaries. Most newsmakers do not wait to be picked up by a search engine but voluntarily link their news content or snippets to intermediaries in order to get wider exposure.

The real problem is with advertising and market power. Newsmakers used to finance their journalism through advertising, either product/display or classified. The latter, once responsible for as much as 40 percent of newspaper revenue, was decimated years ago by the likes of Kijiji and Craigslist. The market has now largely gone to the web giants, legacy newsmakers are suffering, and subscriptions, while helpful for quality products, can’t sustain newsrooms built for a different century.

Meanwhile, modern digital newsrooms built by innovators and entrepreneurs are at risk of becoming the babies thrown out with Bill C-18’s reactionary bath water.

The digital news intermediaries and newsmakers are in a symbiotic relationship. The intermediaries use the sources for news and the data accompanied therewith to sell targeted advertising. The newsmakers need the intermediaries so that they can be digitally accessed at no cost and expose their content and advertisers to vast audiences.

Instead of forcing them into a forced and obviously loveless marriage based on a debatable economic foundation, a simpler immediate solution is available. Google has publicly said that it is willing to pay into a fund to support journalism producers.

Why not take them up on it?

Digital platforms over a certain size (say $75 million) would have to pay a given percentage (say five percent for the sake of argument) of their gross advertising revenue into a fund administered by a board set up by key journalistic bodies in Canada representing all sectors whose primary business is news.

The proceeds—in a manner somewhat similar to the Canada Media Fund but unburdened by its subjectivity and language politics—would be paid on a per (journalist) capita basis to each organization. The government would have nothing to do with it.

Canada desperately needs a coherent, thoughtful, and multifaceted news industry policy. This fund (obviously there are ticklish details to be worked out such as who qualifies as a journalist, who appoints the board, what are the accountabilities, etc.) could be an important and collaborative first step. Rather than the contentious, head-butting, trade sanctions-tempting path the government is currently navigating, it can be quickly established, will provide revenue newsmakers require, and will avoid the unnecessary confrontations that we are witnessing.

It is time to scrap Bill C-18 and move swiftly to establish this fund as the first step in building a national framework to inspire the free, independent, responsible, and trusted journalism Canadians need in order to make sense of and organize their lives.

Tegan Hill: Premier Smith’s ‘new fiscal framework’ requires constitutional change to make it last 

Commentary

In its recent budget, Danielle Smith’s government in Alberta introduced a “new fiscal framework.” While it’s a positive step forward, the framework is based in statutory law, which means the current and future governments can easily ignore, change, or eliminate it at any time. Put simply, the new framework will only work so long as governments choose to follow it. 

Specifically, the new framework mandates balanced budgets (except when there’s an unexpected disaster or sharp decline in revenue including oil and gas revenue). It also limits annual increases in operating spending to the rate of population growth and inflation, and set rules for the use of future surpluses—at least 50 percent of any surplus must go towards paying off debt with the remaining deposited in a new “Alberta Fund” to be used to either pay down debt, save in the Heritage Fund or spend on one-time initiatives.  

In the past, the province has experimented with similar statutory rules intended to impose fiscal discipline on governments. The rules worked well during good times but unfortunately were easily discarded when times got tough, precisely the times the rules were intended to help manage. 

Consider the Heritage Fund, first introduced by the Lougheed government in 1976/77. Originally, the government was required to deposit 30 percent of resource revenue annually. If followed, this 30 percent rule would have helped governments spend more sustainably and avoid large deficits. But the rule was based in statutory law, which meant the provincial government (specifically, the Alberta legislature) could unilaterally change the rule.

And it did. Following an oil price collapse in 1982/83, the government reduced contributions to 15 percent. Following a second oil price collapse in 1986/87, the government ended mandated resource revenue contributions entirely. As a result, today all resource revenue is typically included in the budget and continues to create volatility in provincial finances.

The Alberta Sustainability Fund (ASF) was another attempt to use statutory rules to help Alberta’s finances. Established in 2003, the fund was meant to “stabilize” a specific amount of resource revenue for the budget, which would limit the amount of money available for spending while saving any excess resource revenue during the good times to be used when resource revenue fell below the stabilized amount. The logic was simple—save during good times to provide a stable level of resource revenue during bad times.

However, following the 2008 financial crisis, consecutive provincial governments disregarded the rule, drained the fund entirely to support the budget, and the ASF was officially eliminated in 2013.

Both the Heritage Fund and ASF started with well-intentioned rules and had the potential to help stabilize Alberta’s finances (just like the Smith government’s new fiscal framework). But in both cases, the fiscal rules didn’t last because they were statutory and therefore easy for governments to change.

To ensure fiscal rules are robust over time, they should be constitutional, which makes them much harder to bend or break. And contrary to popular opinion, it’s possible to change Canada’s Constitution for province-specific measures. First, the Alberta government must conduct a referendum in the province—in this case, asking Albertans if they agree to the terms of the new fiscal framework. If the majority of Albertans vote in favour of the proposal, the Alberta government then must pass provincial legislation to recognize the new rules and present this legislation to the federal House of Commons and Senate for recognition, resulting in a change pertaining to Alberta in the national Constitution.

After that, if a future Alberta government wanted to reverse the rule or ignore its requirements, it would need to reverse each step in this process. Specifically, it would have to seek public approval through another referendum, pass provincial legislation, then ask the federal government to approve similar legislation. That’s a lot of work to undo rules meant to spare Albertans from more deficits and government debt.  

To truly secure long-term fiscal stability, Alberta needs more robust fiscal rules. By making fiscal rules constitutional, they can’t be easily ignored, disregarded, or eliminated in the future.