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Michael Geist: The government guts the Online News Act in an attempt to fix a mess of its own making

Commentary

The government this morning released the final Online News Act regulations, effectively gutting the law in order to convince Google to refrain from blocking news links in Canada and to fix some of the legislative mistakes that have been apparent from the start. While proponents of the law will point to the $100 million contribution from Google as evidence of success, privately most in the industry and government acknowledge the obvious: Bill C-18 was deeply flawed and a massive miscalculation that has created far more harm than good.

Canadian Heritage Minister Pascale St-Onge seemingly agrees as she was willing to make changes that were derided by the government throughout the legislative process. Indeed, by the time St-Onge took over the file that was a challenging salvage job, Meta’s $20 million in news deals were lost and blocked news links on Facebook and Instagram were a reality. The prospect of the same happening with Google was too much for the industry and the government since the lost deals would have been at least double that amount (many believe in the $40-50 million range) and lost news links in search would have been catastrophic.

As the regulatory process unfolded in the fall, the top priority was therefore to ensure Google news links did not disappear, even if that meant essentially re-writing the legislation. That is effectively what the government did with the release of today’s final regulations and regulatory impact assessment. The $100 million from Google is likely to yield relatively little new money after subtracting $20 million lost from Meta, an estimated $50 million from existing Google spending is folded into the new funding model, and $5-6 million to cover administrative costs of the new system. In other words, the entire Canadian news industry picks up roughly $25 million in new money, set against lost links on Facebook and Instagram and lost investment in the sector due to regulatory uncertainty. That is disastrous and helps explain why the deal also comes with the government’s increased bailout for newspapers with the expanded labour journalism tax credit and the expectation that the CRTC will use Bill C-11 to funnel more money to broadcasters to cover news costs.

The relatively small amount of new money also helps explain why the government has directly engaged in determining how it will be allocated. While its Bill C-18 pitch changed over time—from payments for links to levelling the bargaining playing field—it ends with a simple shakedown. Google has money and this tax-like approach forces them to pay up to make the contentious policy battle go away. The government had claimed that it would not become directly involved in either negotiating payments or determining how the money would be allocated. It was—in the words of Rodriguez—merely setting the table for the two private sector sides to reach a deal with mandated arbitration lurking in the background.

Today’s final regulation discards both claims and overhauls the law, adding a Google-specific regulation that specifically grants it an exemption from arbitration in return for the $100 million payment and a specific reference that the payment is not about payments for links. The Google-specific provision is exhibit A for the absurdity of the legislation as it literally creates a singular exception for one company:

Despite subsection (1), in the case of the digital news intermediary that is the search engine with the greatest share of Canadian Internet advertising revenues among all search engines in respect of which the Act applies, the Commission must interpret the agreements as contributing to the sustainability of the Canadian news marketplace if and only if, for each year covered by the potential exemption order, the agreements provide for monetary compensation in accordance with the formula

The regulations also make it clear that no further “non-monetary” compensation is needed and removes the link to both links and copyright, two of the most contentious aspects of the law:

The agreement need not provide any consideration for merely facilitating access to news content or for otherwise making news content available in a manner that would fall under a limitation or exception in the Copyright Act.

Moreover, the regulations create a cap on the revenues allocated toward broadcasters and the CBC (a problem of the government’s own making), which ensures that most of the money will go to print and digital outlets (caps of 30 percent to broadcasters, 7 percent to the CBC). That’s a significant change that the government opposed for months. But not all print outlets will benefit, since the government is also tying the money to news that is “intended to be made available online” and expanding the definition of “journalist” for the purposes of calculating how much each entity might receive by including “full-time equivalent employees who, in the previous calendar year, were employed by each news business for the purpose of producing, for news outlets operated by that business, original news content that is intended to be made available online”.

The combined effect of this regulation should be obvious: excluding some smaller and ethnic outlets altogether while reserving most of the remaining money for larger entities such as Torstar or Postmedia who employ more journalist-adjacent personnel. I suspect many of the smaller players could see this coming, but they’ve been tossed under the bus in the effort to send more money to bigger outlets who stood to lose the most from Bill C-18 (and who incidentally lobbied the most for the legislation).

While not in the regulations, added to the mix is a battle to become the new fund manager. The regulations speak to “reasonable administrative expenses”, which I understand may be in the 5-6 percent range, or $5-6 million. Since Google need only negotiate with one such fund, look for a major battle between News Media Canada, the Canadian Association of Broadcasters, and perhaps other players for the shot at the administration money. There should be credit to St-Onge for sensible changes to the law (certainly politicians from all parties will be outraged to learn their local publications get nothing), but to be clear, it means the government has not only negotiated the actual payment but now largely determined how the money will be allocated, eliminated provisions that only months ago were deemed essential, and literally created a regulation exempting a single company. Together they effectively bury the original Bill C-18 and resurrect it as the law the government spent months rejecting.

This column originally appeared on michaelgeist.ca.

Harrison Lowman: The old news is dead. Long live the new news

Commentary

The news media in Canada is in crisis. Policy responses to date are failing to solve for the information that citizens need to make informed decisions about important issues and debates. The Future of News series brings together leading practitioners, scholars, and thinkers to imagine new business models, policy responses, and journalistic content that can support a dynamic future for news in Canada.

Legend has it that back in the seventies and eighties when Carleton University journalism students ascended the stage to receive their diplomas on graduation day, the editors of Canada’s top newspapers, magazines, and TV news shows were there sitting in the crowd, silently waiting to tap the shoulders of the young and talented and offer them full-time employment. As a result, some students had media jobs even before they left the auditorium. 

Carleton journalism’s class of 2024 will be lucky to get jobs in journalism at all.

Even when I attended Carleton in 2009, the future of Canadian journalism was in question. It felt like professors were giving us hoses to put out an industry in flames. But there was still some promise. Remarks like, “It’s your generation that will have to save the industry”, “People will still read their newspapers, but on iPads”, or “We can just do what the Vice News guys are doing,” echoed through lecture halls. Years later, the Toronto Star’s $40-million dollar Star Touch tablet app experiment would fail catastrophically. Vice Media would file for bankruptcy. Most of my fellow graduates would leave journalism.

Today, much of the Canadian journalism industry has burned to the ground. Last week, even the CBC, which received $1.3 billion from the federal government in 2022, announced it would be eliminating 800 positions. According to Statistics Canada, in 2011 there were 13,280 journalists working in this country. Today there could be as few as 8,000, most of whom have watched in horror as almost $5 billion in revenue has disappeared in about a dozen years.

Journalists today face a public that is far less interested in what we have to say. Reuters and the University of Oxford now report that the number of Canadians who say they are “very or extremely interested in the news” has dropped by more than 20 percent in just six years, now sitting at 43 percent. Shockingly, that’s lower than in the U.S, the U.K., Germany, and Australia. Eight percent fewer Canadians are using the internet to follow the news compared to last year. Nine percent less are turning on their TVs to watch us. 

When they do tune in, fewer and fewer trust what they are hearing. In 2018, 58 percent of Canadians said they “trust the news most of the time”. Today, that number is 40 percent. An 18-point drop in five years.

When it comes to confidence, the numbers are even lower. According to Statistics Canada, only 31 percent of Canadians, have “a good or great deal of confidence in Canadian media”. This falls to 14 percent for off-reserve Indigenous people and 23 percent among 25 to 34-year-olds. I say this as an astonished 32-year-old.

An attitude problem

Many journalists will have you believe the blame should be placed at the feet of our readers, viewers, and listeners. You will hear things like, “They need to care about what we do.” 

In fact, we may be the only industry that consistently blames the consumer for its ills. As Canadaland publisher and media critic Jesse Brown says, “Most people don’t trust us journalists. In any other business, this would be treated as a problem for the industry to solve…In news, we blame the customer.” 

We continue to act like we are holier than thou, that we know best. We tell members of the public we don’t have a job like they do, but “a calling”. We often write with a paternalistic and preachy tone. We nudge people towards thinking a certain way about an issue or have them believe a debate is settled when it is not. We refuse to let audiences draw their own conclusions. We turn news into stories and then into morality tales. We refuse to check our biases before picking up our notepads. We claim the very idea of objectivity is “flawed”. Personal threats from readers are of course unacceptable, but we often adopt a “woe is us” mentality, whining publicly about those who criticize our work. “Accountability…We’re not very good when questioned ourselves”, admitted CBC News editor-in-chief Brodie Fenlon at a recent panel on trust in media. Beyond our cash flow problem, we have an attitude problem that is contributing to our demise.

Out of touch

Part of the problem is that we—the Canadian mainstream media—have lost touch with a great many Canadians who do not see their lives reflected in our work. Many of us journalists had affluent upbringings, are white, university-educated, aren’t religious, and live in large cities (myself included). Many of us work in television newsrooms where the only people who probably voted Conservative in the last decade are those behind the cameras, and perhaps the janitorial staff who clean up after us. We use academic language that is a barrier to entry before readers have even reached a paywall. Our editors bury pitches about controversial debates—but debates that Canadians are already eagerly having around the dinner table. How can we say we have an open dialogue with the Canadian public when major mainstream outlets are disabling comment sections on their content? Even after three decades of the internet, journalism has become a one-way street.

How have some viewers responded? They’ve switched us off. 

When Canadians disconnect from the stories we used to collectively engage with national unity suffers. Canadians increasingly feel like they have less of a stake in this country. There are fewer ties that bind this tiny population spread out across the second-largest nation in the world. As The Hub’s editor-at-large Sean Speer noted in a recent column, “In an absence of common stories and shared understandings of ourselves and the country, the danger is that we devolve into a loose collection of individuals merely living in the same geography.”

Hope on the horizon?

All is not lost. Amidst an industry aflame, there are a few phoenixes rising from the ashes. Podcasts, Substack, subscriber fees, and donations from benevolent benefactors have spawned entrepreneurial outlets like The Hub, The Line, Canadaland, Blacklock’s Reporter, The Logic, and The Narwhal. These pioneering media outlets are forming the first faint ruts in the road for others to (hopefully) follow toward more trustworthy and self-sustaining Canadian journalism. Meanwhile, many newspapers stagger forward, propped up by government and Big Tech subsidies.

Newcomer niche outlets come with their own risks. They are confronted by the fact that only 11 percent of Canadians are currently willing to pay for online news. There is also the possibility that as mainstream outlets draw their final breaths, Canadians who still want to be informed will gravitate towards outlets that merely confirm their biases. We could be left with a nation of people trapped in new news bubbles, living in separate realities. 

The Hub

I sought the role of managing editor of The Hub because it provides reporting, commentary, and in-depth interviews on politics, business, culture, and foreign affairs not often seen in the Canadian media landscape. Because it wears its patriotism on its sleeve and encourages Canadians to be engaged in their democracy, institutions, and communities. Because The Hub believes this country’s history matters. It deals in big ideas and is open to debate. It is not afraid to wade slowly through policy weeds and wonky waters. It is hiring journalists to produce original content and quickly becoming one of the top most visited independent news sites in Canada. It relies on the insight of genuine experts but also believes in hearing the wisdom of the public. It seeks to understand identity politics, not practice it. It is civil and realistic. It does not purposely feed the anger of Canadians, leaving more division in its wake. As its mission statement reads, The Hub “is a conscious effort to push back against this post-modern malaise.” We want to help shape the conversations that will help make Canada a better country.

Journalism students graduating in 2024 who are gutsy enough to pursue jobs in this industry will face a difficult choice. They can seek work at a legacy media outlet that will provide them with the backing of an institution, long-established journalistic practices, and a familiar name on a business card. And the work can be very rewarding. I should know, I’ve worked for them. But sadly, many of these places are slow to adapt, risk-averse, stuck in bureaucratic mud, and are managing their decline. Their best years are behind them.

Or today’s journalism grads can choose to hitch their wagon to a plucky media start-up. While these outfits may offer less prestige and are still making a name for themselves, they are nimble, they take risks, and they experiment. They are the ones leading the charge into Canadian journalism’s uncertain future. They won’t be resistant to all the flames, but their best is yet to come.

The Future of News series is supported by The Hub’s foundation donors and Meta.