Canada faces a critical juncture as artificial intelligence (AI) rapidly transforms the media landscape, with lawmakers and industry leaders debating how to balance innovation with protecting domestic creative industries. The discussion has taken on new urgency as this country struggles with declining productivity and questions about its economic competitiveness on the global stage.
This week, Rudyard Griffiths, co-founder and publisher of The Hub, appeared before the Standing Committee on Canadian Heritage to provide testimony, alongside other industry and cultural groups on AI’s impact on the creative sector, including the news industry.
Here are five key takeaways from the committee meeting:
1. Canada risks falling behind in the global AI race: There is concern that legislative barriers could hinder Canada’s ability to compete internationally in AI development and adoption.
2. AI is replacing the function of media companies: Publishers are no longer the goto source for news and information as AI “overviews” and LLM (Large Language Learning Models) chat interfaces become an increasingly popular way to consume news and information.
3. The Online News Act has concentrated market power: Google’s $100 million deal under Bill C-18 which distributes funds to journalistic outlets has taken away from the news industry the bargaining power given the implementation of the act has publishers making their content available to Google search.
4.The speed of AI adoption creates policy dilemmas: Lawmakers evidence a bias towards insulating affected groups from change through subsidies and policy protections while also acknowledging the scale and scope of change may mean these interventions are ineffective.
5. Media independence requires new strategies: Publishers are exploring direct audience relationships and alternative distribution methods to reduce dependence on tech platforms.
Canada risks falling behind in the global AI race
Canada faces a critical juncture in AI development that could determine its economic future. As Conservative MP Kevin Waugh bluntly observed, “If we get left behind, we will be a third-world country, if we’re not already.”
Griffiths’ testimony before the committee emphasized that Canada’s productivity has declined over the past decade, and that AI represents a major growth opportunity that the country cannot afford to miss.
He acknowledged competitive pressures while advocating for a measured regulatory approach.
“We need to be integrated with the world. We need to be using the world’s technologies, and we need to…have a sense of our own resiliency and our ability to meet this challenge together.”
He also acknowledged that some AI chips have a roughly 12 to 18 month shelf life before they have to be replaced by the next generation of technology, requiring multi-trillion dollar investments that create “a moat” around large technology companies.
“I think our competition focus is…best targeted on ourselves and our own industries inside Canada instead of trying to figure out how we’re going to limit or encourage competition on the part of these large multi-trillion dollar multinationals,” Griffiths explained.
AI is replacing the work of many media companies
Independent news publishers like The Hub confront an existential transformation in how audiences discover and consume content. Griffiths’ testimony revealed that many news outlets are experiencing dramatic declines in organic traffic, with some reporting drops of between 50 to 80 percent. The root cause lies in how users now interact with search technology. Griffiths asserted that “upwards of 60 percent of all Google searches are now zero-click,” meaning users obtain their information directly from AI-generated summaries, without visiting the underlying websites.
This is a problem for publishers whose potential readers overwhelmingly rely on the search platform.
Griffiths pointed out that Google is responsible for 90 percent of all search volume in Canada and the United States.
“The click through rate can be as low as the single digits. This obviously challenges the business models of many news and information providers on the web,” Griffiths explained.
He also warned these overviews are increasingly doing the work of media outlets.
Search platforms are “now, in a sense, stepping in, very much like the role of my organization, to synthesize that information for you and present it to you.”
Yet Griffiths also acknowledged genuine benefits AI brings to journalism, enabling smaller publishers to “compete with my larger peers” through investigative capabilities previously available only to major newsrooms.
The Online News Act has concentrated market power
The Online News Act, intended to support Canadian journalism through distributing $100 million annually, has paradoxically strengthened Google’s dominance over news content, insisted Griffiths.
“If you are a recipient of funding through the Online News Act, you are unable to prevent Google from scraping behind your paywall, scraping subscriber-only content to serve up in their large language learning model. So I think we need to understand that with every new regulation there are trade-offs and unexpected consequences” he said.
As Griffiths explained, “If [we] prevent Google’s AI bots from accessing content behind our paywall, we will disappear from all search results across a platform that serves the vast majority, if not all, of the organic traffic to our website.”
The speed of AI adoption creates policy dilemmas
The rapid pace of AI development presents lawmakers with a fundamental tension between enabling innovation and protecting affected industries. Parliamentarians expressed concern that moving slowly risks leaving Canada behind, but that moving too quickly could cause significant disruption.
Griffiths advocated for what he called a “Hippocratic oath” approach to AI regulation:
“Do no harm, indeed. But to step beyond that, as we have in other ways through large-scale regulation of the Canadian economy, especially my own industry of journalism, I think we’re starting to see the pernicious effects of that approach,” he explained
Griffiths emphasized a historical perspective on technological disruption, noting that previous transformations have created similar moments of “profound dislocation” with winners and losers. However, Griffiths argued, “We left the horse and buggy behind. We’re not driving in horse and buggies today because we understood that that industry was supplanted by a new industry, the internal combustion engine.”
The challenge lies in distinguishing between necessary safeguards and counterproductive interventions that stifle innovation and competition.
Media independence requires new strategies
Griffiths outlined a vision for media independence centered on competition rather than subsidization.
“Necessity is the mother of invention, and I would urge that we take away all the subsidies …that are out there and allow competition to occur on a level playing field in our industry.”
Griffiths explained how current subsidies distort the market, making media organizations compete primarily based on how many full-time employees they have and how many subsidies they can claim.
Government subsidization of the news industry comes in a raft of separate programs. Estimates suggest there could soon be as much as a 50 percent subsidy on journalist salaries up to $85,000 per year.
Instead, he advocated for competition based on content quality.
“Wouldn’t it be great in the news industry if people actually competed on the basis of the content they produced and the audiences that they were able to bring to that content?”
Griffiths concluded with his core principles for future AI policy: “Competition, fairness, and transparency would be some good ones to start with.”
Comments (0)