Canada considers media regulations on Facebook and Google

Legislation is expected to follow similar mandate passed in Australia in which tech companies pay local media outlets for content

Prime Minister Justin Trudeau pledged to introduce the legislation within the first 100 days of his new mandate. Reuters

Canada’s media industry could be in line for a big and desperately needed payday as the government considers legislation that will force Facebook and Google to pay media companies for the use of their content.

Prime Minister Justin Trudeau pledged to introduce the legislation within the first 100 days of his new mandate, which would be the beginning of February 2022.

The legislation is expected to follow a similar mandate passed in Australia that stipulated tech companies like Facebook and Google pay local media outlets for the use of their content.

The Liberal Party's campaign platform says the bill will “level the playing field between global platforms and Canadian news outlets [and] … will also allow news publishers to work together to prepare for collective negotiation".

The Press Gazette reported that the Canadian news industry is expecting annual payments of between $100 and $150 million from Big Tech.

News Media Canada, a lobbying group representing about 650 daily and weekly publications across the country and more than 3,000 journalists, has been pushing the Trudeau government to pass the legislation for months.

Paul Deegan, president and chief executive of News Media Canada, is hoping the tech companies will cover up to 30 per cent of newsrooms' annual operating costs.

That could be a necessary boost for many local papers that have had to weather declining advertising sales and the pandemic.

“The internet has really disrupted the news business and some of our members have adapted to this reality better than others. But I think even those who have really see that sort of long term, this is needed,” Mr Deegan told The National.

The Canadian Media Concentration Research Project reported that Facebook and Google take up 80 per cent of the online advertising market, making it difficult for local media to compete.

“I think in terms of long-term sustainable funding, what we're really looking for is just to be compensated fairly for copyrighted material that our journalists produce,” said Mr Deegan.

For The Sherbooke Record, a small daily newspaper in Quebec’s Eastern Townships that has been publishing since 1897, the legislation could help keep its printing presses going.

“That one-two punch of our two revenue streams — subscribers and advertising — really took a big hit from the digital giants,” said Sharon McCully, publisher of the Record.

“We can't compete in that market. So, what we're doing is operating two platforms, a print platform and a digital platform, just trying to stay afloat with both of them.”

Ms McCully, who has been with the paper since 1988, is optimistic that papers like hers — represented by News Media Canada — will receive much needed funds from Big Tech.

“I am quite confident that they're going to hold out on behalf of the smaller newspapers,” she said.

When Australia passed its own regulations, social media behemoths struck lucrative deals with Australian media companies, but experts differ on whether such a model will work in Canada.

Daniel Tsai, a lecturer in law and technology at the University of Toronto, said the Australian model would “compensate publishers for the structural deficit they have in terms of their ability to monetise their content".

Mr Tsai added that it was important for companies to continue to innovate and search for new ways to reach audiences and make money.

“The reality is these businesses also need to get more competitive,” Mr Tsai told The National. “I mean, publishers just have to change their business models.”

However, Michael Geist, a law professor at the University of Ottawa specialising in internet and e-commerce issues, does not think the “Australian-style” legislation is necessary.

“I think we also know that there are real costs associated with government intervention in the space,” Mr Geist told The National.

He said the model could have a real impact on the independence of Canadian media, both large and small.

Facebook, rebranded as Meta, and Google take up about 80 per cent of online advertising. Reuters

“Once you become dependent on government in this way, I think the reality is there is a reluctance to hold the government to account in the same way,” he said.

Google has already forged relationships with several prominent Canadian outlets including The Globe and Mail.

A Google spokeswoman said the company was active in conversations with the federal government and has “committed to training 5,000 Canadian journalists over the next three years on digital skills".

Facebook said through a representative the company could not comment on legislation that has yet to be tabled but added that the company has invested about $10m in partnerships and programmes to bolster Canadian media over the past four years.

In addition, she said the company is investing $8m “to support the long-term sustainability of journalism in Canada".

News Media Canada is calling on the Liberal government to pass the legislation by June — a tall order, considering it is a minority government.

But as the pandemic continues and the importance of social media increases, those in the media say a decision needs to made soon.

“We need this legislation urgently,” said Mr Deegan.