Canada’s legislation compelling big tech to pay news outlets is on its way. Here’s how we got here

OTTAWA — A bill that could toss a lifeline to Canada’s financially struggling news industry is set to be introduced by the federal government, renewing the debate between digital giants and publishers over compensation for news shared on online platforms.

The “Act Respecting Online Communications Platforms That Make News Content Available to Persons in Canada” surfaced on Parliament’s notice paper earlier this week, meaning the legislation will soon be tabled in the House of Commons.

The legislation is expected to require companies like Google and Facebook to share a portion of their advertising revenue with Canadian media outlets for linking to news content on their platforms.

The intent, the government says, is to level the playing field between big tech and the news industry, which has argued for years that online platforms are eating up ad revenue generated by their own content and imperiling the future of journalism.

But how has Canada tackled this debate in recent years?

Here’s what you need to know.

The road so far

Over the past several years, many countries have been studying the crisis facing shrinking news industries and the market power of web giants like Google and Facebook in the online advertising space.

In 2019, for example, the Canadian Media Concentration Research Project reported that 80 per cent of online advertising revenues in Canada went to the two tech titans.

The Canadian news industry — including Torstar, which publishes the Toronto Star — has lobbied for the federal government to address the imbalance in online advertising revenue.

Discussions between news publishers and online platforms about revenue sharing ramped up in 2021 as Australia finalized and passed its News Media Bargaining Code.

The code, which will be used as the basis for Canada’s legislation, provided for news publishers and web giants to negotiate payment deals for content shared to their sites.

Also under study at the time was France’s approach, which involved changing copyright law to require tech giants to pay for the use of news content.

What will it look like?

Australia’s code allows media organizations and digital platforms to work out their own deals for the use and reproduction of news content. If they fail to agree, a final-offer arbitration process would come into effect to lock down a deal.

That process has not yet been triggered in Australia, because Google and Facebook struck agreements with publishers.

Similar deals already exist in Canada, leaving it an open question whether they’ll be exempt from the impending bill.

Last fall, Google made a deal with 11 publishers, including Torstar, to join its News Showcase service. Through the service, users can access content from certain publications, sharing news from trusted outlets and directing traffic back to their sites.

Meta, Facebook’s parent company, signed a multi-year deal with Torstar in November that will see the web giant pay the publisher for the ability to post links to work produced by its publications. Seventeen other Canadian publishers are part of the program, which is called the News Innovation Test.

But knowing what Australia’s deals look like and how they have fared is “shrouded in mystery,” says Dwayne Winseck, a communications professor at Carleton University and director of the Canadian Media Concentration Research Project.

And the code might not do much to address the root causes of the market imbalance, he said.

“It might level the playing field somewhat between news media and the platforms by forcing them to come to the table, but it does nothing to undo the bigger question of dominant market power by the platforms across the digital economy,” Winseck said.

Why now?

There are likely two reasons why the federal government is finally moving forward with tabling the bill after years of mulling over the issue, says Paul Deegan, CEO of News Media Canada, of which Torstar is a member.

The first is that Australia’s code has been in effect for just over a year, so Canada has been able to see how the law has worked out during that time.

“I think politicians wanted to act, but they weren’t quite sure what the best approach was. If you look at (last) summer, at that point, you were a few months into the Australian model and deals were already being inked,” he said. “So I think that is what really drove it was seeing the success down there.”

The other motive may have been the scourge of disinformation and misinformation online, a topic with which the federal government has been particularly seized in recent months.

“I think everyone really gets the important role of journalism in this era of fake news. The misinformation around the pandemic, and frankly, the misinformation coming out of Moscow … people really seem to understand that this is important,” Deegan said.

“This is really the time to act, and we don’t have another two or three years to wait.”


Raisa Patel is an Ottawa-based reporter covering federal politics for the Star. Follow her on Twitter: @R_SPatel


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