By Brenda Sawatzky
Local Journalism Initiative Reporter

 On June 22, the federal government passed a bill that has the potential to forever change how millions of Canadians access news. For journalists and news agencies across the country, both large and small, this could mark the end of an era.

Bill C-18, also known as the Online News Act, introduces new rules requiring that tech giants such as Google and Meta negotiate deals with Canadian media companies to financially compensate them for the stories that get posted on their online forums.

Meta is the parent company of social media platforms Facebook and Instagram. Google is far and away the most prevalent search engine in the Western world.

The bill was first introduced in Parliament in April 2022 as a means to force big online conglomerates to share the profits they earn from online advertisers.

The bill’s biggest defender, Canadian Heritage Minister Pablo Rodriguez, says that the goal is to ensure an income for the Canadian news industry so they can stay afloat in these changing times.

In the past decade, the advertising revenue that used to drive the news business—whether print media, television, or radio—has rapidly migrated to platforms like Google and Meta, allowing those companies to amass near-monopolies that have shut out the competition. Those advertising dollars, instead of circulating locally and supporting journalism close to home, tend to leave the local economy altogether.

At a recent press conference, Rodriguez noted that about 80 percent of all money spent on online advertising funnels into these two companies. This indicates a major disparity in market share and power imbalance.

But his concerns go beyond the equitable sharing of profits.

“All these media [outlets]… that play a fundamental role in informing Canadians are gradually disappearing, leaving room for the extremes and also for disinformation,” Rodriguez said. “And I think that it’s bad news for our democracy.”

Google and Meta’s response to the bill, however, has not been amenable. As critics of the bill since it was first proposed, both have indicated their intent to block access to all Canadian news sources before the bill comes into effect later this year.

In June, Meta put their threat to the test by quietly blocking Canadian news content for five percent of Canadians who use Facebook and Instagram.

The federal government retaliated by announcing that it would pull all government advertising from those companies. The Quebec provincial government and the City of Montreal have since followed suit.

What This Means to Average Canadians

Consider, for a moment, how you get your news. What is your primary means of discovering what’s going on in your neighbourhood, your country, and your world?

Statistically speaking, if you’re under the age of 64, the vast majority of your news is derived from online sources such as Facebook and Instagram. News agencies post links to their articles there daily and hundreds of readers in turn share that news on their feeds.

Consider, too, where you go when you want in-depth coverage of breaking news. How about when you have a burning question that may best be answered by a journalist who’s done the research? Chances are that you search for it using Google.

Imagine now if all Canadian news content disappeared from Facebook, Instagram, and Google. How would you get the facts about the previous night’s stabbing incident in your town? Where would you get daily updates and photo coverage of a fatal bus crash involving a group of Manitoba seniors?

Will you find what you’re looking for when your Google search only turns up articles written by international sources such as the BBC or The New York Times?

Evan Braun, editor of The Citizen, says that people should have grave concerns over the potential loss of local and national online news.

“In general, the role of a free press is critical to the healthy function of any democracy,” Braun says. “But it goes beyond that. Imagine a situation where a wildfire starts up and the news isn’t able to get to the people who need that information, because people are looking on social media and the official warnings and facts are nowhere to be found there. Or consider weather warnings or crime reports. Like it or not, social media has come to dominate the distribution of news in Canada and every other country.”

Case in point, just last month wildfires raged near a town called Tumbler Ridge, British Columbia. Residents were being evacuated and emergency updates were constant, many of them via the big social media platforms.

Today, social media is commonly used by most levels of government to provide instant and up-to-date communication.

“We were following social media because that was our insight into the actual local area,” one resident told the CBC. “And we did find that a lot of places used Facebook, like the B.C. Wildfire Service and the district.”

That situation came to a head when a highway advisory feed run by B.C.’s Ministry of Transportation and Infrastructure was blocked from continuing to post emergency alerts on Twitter after the social media company deemed them to have exceeded Twitter’s post rate limit.

“It’s mind-boggling to have that kind of dramatic, immediate effect,” said Peter Chow-White, professor of communications at Simon Fraser University, in a CBC article. “There’s a continuum of risks, from anxiety to confusion to being disconnected from people in your lives. But, in times of crisis, where it’s something like a fire or earthquake, it can be human lives… It hasn’t reached that stage where it’s lethal, but it could be.”

This event speaks to the vast reach of social media and the potential for harm if Canadian news agencies are blocked from its use.

The potential harm goes beyond protecting the financial positions of Canadian media companies, which is the focus of Bill C-18. There is additional harm now to every single Canadian citizen, with corporate giants having the power to decide what people can and cannot see on the internet.

Braun speaks to his concerns for small independent news sources like The Citizen, which is extremely local in its focus. The articles published by The Citizen—local government, local business, local issues—are typically on subjects not covered by larger media companies, which have a much wider regional, national, or international focus.

“For small organizations like The Citizen, assuming The Citizen falls under the bill’s umbrella, it would be very bad for us,” says Braun. “The majority of our web traffic currently comes through Facebook, and it can’t be understated how bad it would be—for us, for everyone—if news content like ours wasn’t searchable on Google. I can only hope these threats are bluffs because the consequences would be quite grave.”

A Rock and a Hard Place

What’s at stake for news agencies is their very existence in our internet-driven world. From 1950 to 2011, a graph created by the Newspaper Association of America shows print newspaper advertising revenue on a steady incline, surpassing $60 million around the year 2000.

Just one decade later, in 2011, the needle on the graph plummets to a point somewhere around $20 million.

That’s in America, but the situation in Canada is largely the same. In this country, hundreds of newsrooms have been forced to shut down and print newspaper subscriptions have taken a major hit. Thousands of journalists and photojournalists have found themselves without a paycheque.

To stay alive, news agencies have followed the trend and moved online. Virtually every one of them, from major corporations to small independents, has a website presence made possible by online ad sales.

Still, advertisers will go where the greatest viewership can be obtained, putting giants like Google and Meta at the top of the game while media companies scramble for what remains.

Some news agencies are in favour of Bill C-18. And these agencies do feed the cycle by driving news seekers to social media to access content.

The catch-22 for news agencies lies in the fact that the very companies that now rake in the lion’s share of advertising profits are the same ones providing the media with an avenue to reach the masses at no cost.

To that end, Google and Meta believe they have already done their part in helping to ensure the success of Canadian news outlets. Because of this, some news agencies worry that enforcing Bill C-18 will be like biting the hand that feeds them.

But there may also be some public misconceptions that could be set right by all the discussion surrounding the bill.

“The problem is that social media has led to an environment where news is largely considered to be ‘free’ nowadays, and it’s not,” says Braun. “It does need to be paid for, especially if it’s going to be high-quality. If social media makes it too difficult to earn a profit as journalists, by eating into advertising revenue streams and subscriptions, then other workarounds must be found. Asking social media conglomerates to pay their share is one such workaround that is worthy of exploration.”

It’s Worked in Australia

In March 2021, Australia passed a bill that, at least in the short term, seems to have accomplished the very thing that Canada is attempting to do.

The News Media Bargaining Code, imposed by the Australian government, requires Google and Meta to negotiate content supply deals with Australian media outlets.

At the outset, Meta retaliated by shutting down Australian news access on Facebook for a brief time, but that ban was soon lifted.

According to the Australian government, the strategy has been a success. More than 30 deals have been negotiated with media outlets to compensate them based on clicks and advertising dollars generated.

An Australian Treasury Department report suggests, though, that more work needs to be done to extend the code to include other online platforms.

Even so, some are looking to the outcome of Canada’s eventual bill to set a precedent. Both the United States and France are considering similar legislation and are watching with keen interest to see what happens here.

Closer to home, some critics say that the Canadian government won’t win this war and there are better ways to level the playing field between big tech and the news media.

One example, they say, would be to impose a tax on online advertising revenue rather than force profit negotiations. The proceeds raised through this tax would help subsidize reporter salaries.

For Braun, this scenario is also worthy of exploration. However, he says there can be a perception of bias when a news agency benefits from a direct government subsidy.

Who Will Win the War?

There are real skeptics of Canada’s tit-for-tat approach so far. These people would say that the government’s threat to pull its advertising from social media is akin to David facing off against Goliath.

Rodriguez says that Canada’s advertising pullout would amount to around $10 million of lost revenue for Meta.

To put that in perspective, in 2022 alone Meta made more than $100 billion from advertising. The federal government’s revenue is chump change to a company of that size, which speaks to the power imbalance in the current standoff.

What Would the Conservatives Do?

The Citizen reached out to Ted Falk, MP for Provencher, to find out how the Conservatives would respond to the advertising profit disparity between the tech giants and Canadian media, were they in power.

According to Falk, we should be asking whether media companies need to be defended by the government at all.

“C-18 is the government choosing to side with large corporate media while essentially shutting out or shutting down small, local, independent news like, for example, The Citizen, which Canadians and communities rely on,” Falk says. “While most Canadians would agree that Canadian content is important, ultimately they will speak with their dollars and behaviour. Rather than running to the government for protection, the onus should be on Canadian content producers to ensure they are adapting to today’s market to best serve the interests of Canadians, guaranteeing themselves relevance and continued viability.”

Falk says that his party offered amendments to the Liberals on Bill C-18 which would have made the bill more effective in supporting Canadian news outlets. As it stands, he adds, the Liberals and NDP voted down every one of those amendments.

“The Liberal government has made their bed,” he says. “They need to sleep in it. It’s up to Canadian media corporations if they want to stay there with them or try to work out a deal on their own with the tech giants—what they probably should have done in the first place.”

Braun has a somewhat different point of view.

“Honestly, I think C-18, at least in principle, may very well be the best approach,” he says. “Should this specific bill be amended to make it more palatable to social media companies or more effective overall? Yes, that is undeniable. But the idea that social media should be part of the solution in terms of paying for news since they distribute it for free, is reasonable. And in other parts of the world, like Australia, it seems to be working.”

Though the bill effectively became law in late June, it will be months before the wording is set in stone, so to speak. For this reason, it won’t be binding until sometime late this year.

What’s happening in the meantime, Braun says, is hopefully just a matter of political posturing between the government and the tech giants, flexing their muscles before they come to some negotiated agreement that everyone can live with.

“At least, let’s cross our fingers that it’s just posturing,” Braun says.