Speaking Notes for Minister of Canadian Heritage Pablo Rodriguez

Appearance before the Standing Committee on Canadian Heritage regarding the study of Bill C-18, Online News Act (Check against delivery)

Hello, good morning/afternoon.

Madam Chair, colleagues, members of the Committee, I’m grateful to have the chance to appear today to talk about the Online News Act.

On the surface, this Act is about making sure that news outlets in Canada get fair compensation for the work they do.

But at its core, this Act is about so much more than that. It is about upholding our democracy. Which, as we all know, requires a free, independent and thriving press.

We all rely on accurate, fact-based and timely news to get information on what’s important to us. To make rational decisions. To counter mis- and disinformation. And to engage with our democracy.

And in these challenging times, this is more important than ever.

But what we’re seeing in Canada instead is a steady decline of the news sector. And this makes trustworthy information harder to find.

The digital world has fundamentally and forever changed how we create, find and consume the news.

More and more Canadians use digital platforms as gateways to find their news.

A Reuters Institute Digital News Report said that, in 2022, 77% of Canadians were getting their news online and 55% specifically from social media. And these numbers are only increasing.^{Footnote 1}

This has had a huge impact on news businesses.

They are losing advertising dollars to digital platforms and social media outlets, which have built successful business models, partially based on distributing news content. In 2020, two dominant digital platforms had a combined share of 80% of online advertising revenues.^{Footnote 2}

Bottom line: news is being shared widely, but the news businesses creating it are not benefitting as they should. Advertising dollars are not being reinvested to ensure the sustainability of our news industry. And there is currently no incentive for digital platforms to compensate media fairly for news content.

Make no mistake—news businesses in Canada are in crisis.

Between 2008 and this August, 468 news outlets—including newspapers, TV and radio broadcasters, and news websites closed their doors, 78 of them since the start of the pandemic. And only 204 have opened since 2008.^{Footnote 3}

Bill C-18 proposes decisive action to stop this decline.

It presents a practical, market-based approach that lessens power imbalances and encourages good faith negotiations.

It requires digital platforms that generate revenues from news to share a portion of their revenues with the creators of the content.

It encourages digital platforms to enter voluntary, fair agreements with the news media.

If platforms and news outlets cannot reach voluntary agreements, then and only then, the Act will compel mandatory negotiation, with final offer arbitration as a last resort.

To give digital platforms an incentive to bargain fairly and quickly with a variety of news media, big and small, that reflect Canada’s diversity, the Act allows platforms to be exempted from the mandatory negotiation and final offer arbitration process. But this only happens if they can show that they have made enough agreements that meet specific criteria—including everything from supporting local, regional and national news to upholding freedom of expression and promoting inclusion, innovation and diversity—within a reasonable timeframe. And if they make big enough investments.

This Act is modelled on the Australian approach, which has achieved fair compensation for news media in Australia.

But it has uniquely Canadian elements.

We learned from Australia. That’s why the Canadian model builds in exemption from the outset, for example.

We spoke to key stakeholders and experts in the Canadian news ecosystem and used their feedback to adapt the Australian model to the Canadian context.

Canada is only the second country in the world to implement such a regime. We are breaking new ground.

So, we need to keep talking about how to protect and promote high-quality Canadian news content.

We also want this regime to be as transparent as possible.

That’s why we are making public the list of digital platforms that meet the criteria, the list of exemptions and the reasons why they are granted, and the list of eligible news outlets participating in this regime.

We are making sure that the CRTC provides continuous oversight, including independent annual reporting on the value of these deals.

And we are implementing a Code of Conduct to ensure that the freedom and independence of the press are upheld.

[Pause.]

The Online News Act won’t be a magic bullet for all the challenges we face in the digital world.

But it is a decisive step in the right direction. It will help us build a stronger, fairer and more inclusive digital society.

As Rod Sims, the former chair of the Australian Competition and Consumer Commission, said, the world is watching Canada.^{Footnote 4}

I hope we will rise to the occasion.

I hope we will give Canadian news media a chance to rebuild and thrive in a more sustainable, fairer news ecosystem.

I hope we will do everything we can to give Canadians access to the fair, impartial, fact-based, high-quality news we want and need.

I hope we will fight for a vibrant, free and independent press. Fight for our democracy.

Madam Chair, colleagues, members of this committee, thank you for your ongoing study of this important Bill.

I would be happy to take your questions.

Thank you, merci.