Questions and answers for Minister Rodriguez’s appearance before TRCM

On this page

• Theme 1: Policy Rationale
• Theme 2: Policy Approach
• Theme 3: Application
• Theme 4: Eligibility
• Theme 5: Exemption
• Theme 6: International Comparisons
• Theme 7: CBC/Radio-Canada
• Theme 8: AI Chatbots and Algorithms
• Theme 9: Platforms Exit the Market

Theme 1: Policy Rationale

Q1 - Is this legislation necessary, given digital platforms are already striking commercial agreements with individual news outlets globally?

• Yes. Without the bill, platforms are not obligated to strike commercial agreements with news outlets, and there is no guarantee that existing agreements will be renewed.
• Moreover, our made-in-Canada approach will ensure that there is transparency and public accountability about these agreements moving forward.

Q2 - How much will Canadian news businesses earn? Why is the Government’s estimate of how much news businesses will earn so different from the PBO’s?

• The Department of Canadian Heritage (PCH) estimates that compensation arrangements from C-18 could total approximately $215 million CAD per year. PCH used a results-based methodology based on the commercial outcomes of similar legislation passed in Australia, adapted for a Canadian context.
• In contrast to PCH’s methodology, the PBO estimated editorial expenditures on news in Canada and assumed 30% of these expenditures would be paid in compensation to news businesses.
• The results-based methodology used by PCH is a way to avoid the challenge presented by the significant difference in how editorial expenditures are measured between broadcasters, newspapers, and news websites.

If pressed on the amount of compensation to broadcasters v. other news businesses:

• As it relates to broadcasters, the PBO used a broad definition of editorial costs. As a result, the Department does not share the PBO’s assessment that broadcasters are likely to receive 75% of funding.

Theme 2: Policy Approach

Q3 - Was a fund model considered? Why was it not chosen?

• A mandatory contribution and arms-length fund model was considered as part of a public consultation in 2021. However, a fund model would not address the imbalance of market power between digital platforms and news outlets. There is also a risk that the administration of a fund could be perceived as politicized, which could threaten the independence of the press.

Q4 - Is the CRTC really equipped to be the regulator for this regime?

• The Canadian Radio-television and Telecommunications Commission (CRTC) has expertise in many of the areas required to administer this Act.
• It has long-standing experience in creating procedures surrounding final offer arbitration between parties and providing dispute resolution mechanisms in the broadcasting and telecommunications sectors, including mediation, undue preference and codes of conduct.
• Importantly, the CRTC is accustomed to operating within an environment of significant regulatory independence, which is a key mechanism to protect free speech and journalistic independence.

Q5 - Will this legislation adversely affect press independence if news businesses rely on funding from platforms?

• No. The bill does not regulate news media, but rather sets up a framework for news media to be eligible to participate in a bargaining process.
• The criteria for platform exemption contain provisions that prohibit platforms from interfering in newsroom decisions. These criteria specify that agreements between platforms and news businesses must not allow corporate influence to undermine the freedom of expression and journalistic independence enjoyed by news outlets.

Q6 - Will news businesses be required to adhere to a government-mandated code of ethics in order to receive funding? Doesn’t this interfere with freedom of the press?

• The news industry in Canada is self-regulated. One of the paths to eligibility requires that news businesses declare they have their own code of ethics or that they follow an existing code of journalistic ethics.
• Bill C-18 incorporates this self-regulation so as to continue to protect the press from government interference.

Theme 3: Application

Q7 - What do you say to concerns that the legislation is "based on a fundamentally flawed understanding of how the internet works"? Is it the government's position that these tech companies are "stealing " revenues or content when news media share their content on Facebook or through Google search?

• Today, a handful of powerful companies wield a great deal of power over how we access content online.
• This is particularly true when we look at how Canadians consume news. Whether through our personal searches on the web or through social media, the majority of Canadians use digital platforms to access their news. The platforms are able to capture billions of dollars in advertising revenues in their role as digital gatekeepers.
• The objective of this Act is to put in place a bargaining framework that will compel the digital giants to share this revenue by fairly compensating news outlets for the content they provide that draws Canadians to these platforms.

Q8 - Isn’t this just a link tax? If not, why?

• The Online News Act does not impose a ‘pay-per-link' structure. It does require platforms to negotiate with news media over all of the ways they make news content available on their services, including reproducing, indexing, aggregating or ranking the content. These negotiations should lead to fair deals that take a balanced view of the value of online news.
• Learning from Australia’s experience, the approach is flexible, allowing the parties to reach deals that focus on the uses of content that benefit them both.

Q9 - Will C-18, specifically its undue preference provisions, promote mis- or disinformation?

• There is nothing in Bill C-18 that would result in a digital platform having to promote mis- or disinformation. The undue preference provisions in the Bill were put in place to prevent platforms from influencing negotiations by promoting or suppressing certain content. To make this even clearer, the House of Commons specified that the CRTC must consider whether platforms are acting in a way consistent with the normal course of their business, or whether their conduct is retaliatory in nature.

Theme 4: Eligibility

Q10 – Will this legislation only benefit large legacy players? How will this model work for smaller regional or community-focused media outlets?

• Collective bargaining would allow news businesses to negotiate for compensation as a unit. This feature makes the regime more accessible, since collective bargaining has the potential to level out bargaining power imbalances between digital platforms and news businesses by allowing small and diverse news businesses the opportunity to negotiate with digital platforms.
• Getting an exemption also requires that digital platforms have reached commercial agreements with a range of news businesses that appropriately reflects Canada’s diversity of languages, racialized groups, and Indigenous communities. The platforms will also have to demonstrate that these agreements support independent local news businesses and that the overall impact of deals appropriately contributes to innovation in the Canadian news ecosystem, as well as its sustainability.
• This exemption process will allow the CRTC to ensure that digital platforms are negotiating agreements with smaller and independent regional or community news businesses as well as larger ones.
• This new legislation complements other Government programs, such as the Local Journalism Initiative (LJI) and the Canada Periodical Fund (CPF) which will continue to support smaller outlets in providing news content to underserved communities.

Q11 - Are there any provisions which account for Indigenous news outlets?

• Yes. Indigenous news outlets, defined in the bill as organizations operated by and for Indigenous people, can apply to the CRTC for eligibility under the Online News Act. Platforms must demonstrate that they have made agreements with a significant portion of Indigenous outlets to be granted exemption from the mandatory bargaining framework.
• Amendments to the bill during study by the Standing Committee on Canadian Heritage expanded the definition of news content eligible under the framework to also include Indigenous storytelling.

Q12 - What protections are there against news outlets that spread hate or misinformation securing deals with platforms?

• There are several eligibility requirements for news businesses that place a high standard on their reporting.
• To be eligible as QCJO, which is one path to eligibility under s. 27(1)(a), organizations must comply with a set of rules, namely s. 2.36 of the Guidance on the income tax measures to support journalism, which has a thorough statement of journalistic ethical practices.
• Licensed broadcasting undertakings—which are referred to in the second part of s. 27(1)(a)—are subject to the ethical standards set out in the Canadian Broadcast Standards Council’s Canadian Association of Broadcasters Code of Ethics.
• Other news businesses can still qualify under the act if they meet specific requirements set under s. 27(1)(b). This section requires that these news businesses follow a set of journalistic standards, either by being a member of a journalistic association, or having their own code of ethics.

Q13 - How many news businesses will be eligible under the C-18 framework?

• The federal government does not regulate news businesses and does not collect census data on the precise number of news businesses that would meet the new eligibility criteria.
• However, based on data obtained from the Canada Revenue Agency in April 2022, we estimate that the number of Qualified Canadian Journalism Organizations who would be eligible is at least 165. Of course, there are a number of other types of news businesses that will be eligible for the C-18 framework, including certain businesses licensed by the CRTC such as a campus stations, community stations or Indigenous stations, as well as Indigenous news outlets.
• The CRTC will be in a better position to assess the number of eligible news businesses once the bill comes into force.
• Ce chiffre ne représente pas le nombre d'accords qui seront conclus, car les négociations doivent porter sur le contenu mis à disposition en ligne.

Theme 5: Exemption

Q14 - How will the CRTC determine whether to grant a platform an exemption?

• The core objective of the bill is to strengthen news businesses’ bargaining position vis-à-vis dominant digital platforms so they can negotiate fair compensation for their news content. Parties are encouraged to negotiate voluntary commercial agreements reflecting a mutually agreed-upon assessment of the value exchange between them.
• In considering whether to grant an exemption, the CRTC will assess a platform’s agreements against the criteria set out in the legislation. Broadly speaking, these criteria are designed to ensure that the agreements benefit a diversity of news businesses across the country, including smaller, independent news businesses; and when taken as a whole, the agreements contribute to the sustainability of the digital news marketplace in Canada.

Theme 6: International Comparisons

Q15 - How does Canada’s proposed model compare to other international regimes?

• Canada’s approach builds on international models that have succeeded in achieving fair compensation for news media. The approach is modeled most closely on the Australian model, which was enacted in 2021 and has thus far resulted in deals between platforms and news businesses that represent a meaningful share of editorial expenses.
• Elsewhere, the European Union made changes to its Copyright Directive, which has led to deals in France, Germany and elsewhere.
• In December 2022, New Zealand announced its intention to table a mandatory bargaining and final-offer arbitration bill drawing on Australia’s and Canada’s approach.
• Recently, legislators in the U.S. State of California introduced a bill that would direct large digital platforms to pay news outlets a “journalism usage fee” when they sell advertising alongside news content.

Q16 - What are the differences between the Australian regime and the proposed Canadian regime?

• The Australian approach resulted in lessons that we were able to apply to Bill C-18 to develop a more transparent, market-based, “made in Canada” approach.
• In Australia, the Minister of the Treasury designates digital platform corporations that have a significant bargaining power imbalance with news media, at the Minister’s discretion. To date, the Minister has not designated platforms.
• By contrast, in Canada, soon after the bill coming into force, quantitative thresholds would be set in Governor-in-Council regulations to determine which platforms are captured under the Act. These thresholds will capture the largest, most dominant platforms, whichever those happen to be.
• The exemption mechanism in Bill C-18 also aims to achieve greater transparency and public accountability by specifying, in the Act, what criteria must be met in order for the CRTC to grant platforms an exemption from final offer arbitration. The CRTC will apply the Act and the related Governor-in-Council regulations during a process that will allow input from the public. The CRTC must then publish the reasons for its decision and explain how a platform meets the criteria.
• Finally, under the Canadian regime exempt platforms would remain subject to parts of the legislation, like data collection, to ensure ongoing oversight.

Theme 7: CBC/Radio-Canada

Q17 - Why is CBC/Radio-Canada eligible to participate in the regime?

• CBC/Radio-Canada’s news and information content is widely accessible through its digital platforms, which include two national news websites and mobile news apps; dozens of local and regional news microsites; an international news service available in five foreign languages; as well as two audio and two audiovisual streaming and on-demand apps.
• CBC/Radio-Canada is a major contributor to news ecosystems across the country. Canadians have a legitimate interest in ensuring that this value is recognized and compensated. Revenues earned from the Online News Act will be reinvested in the news activities of the public broadcaster.
• Bill C-18 would require digital platforms to negotiate fair compensation with news businesses. Excluding certain news businesses could create unintended impacts that undermine the fairness and effectiveness of the framework as a whole.
• Canada’s approach is consistent with Australia’s news-media bargaining code, which includes both public broadcasters: the Australian Broadcasting Corporation and the Special Broadcasting Service.

Theme 8: AI Chatbots and Algorithms

Q18 - Does the legislation address the growing use of artificial intelligence which compiles information from news sources online?

• Bill C-18 introduces a negotiation framework through which platforms will fairly share revenues with news publishers when they make news content available to users of their services.
• The Bill’s definition of “making available” news content through reproducing or facilitating access by any means (including, but not limited to, an index, aggregation or ranking), is meant to allow flexibility for various ways of making news available.
• Moreover, there are provisions in the Bill that require a periodic review of the framework. This was built into the Bill precisely to address any technological advances that might require legislative or regulatory adjustments.

Theme 9: Platforms Exit the Market

Q19 - Is there any recourse should digital platforms choose to remove news content entirely from their platforms?

• The Online News Act would require large, dominant platforms to bargain fairly with news businesses. But the Act also gives platforms an opportunity to get an exemption from mandatory bargaining, using factors that Parliament has set out for all to see.
• News media play a vital role in democracies by providing reliable information on issues such as health, education, and civic life. Digital platforms now act as unavoidable gatekeepers and intermediaries in accessing information, news, and other content. By removing news content from their services, platforms are proving their dominant position.

Q20 - How will the exit of Meta, Google or other platforms affect Canadians and news businesses?

• As private companies, these digital platforms remain free to set the terms of use for content posted on their services. The exit of the most dominant platforms from the digital news market in Canada would affect the means by which Canadians access and share news.
• Platforms have a choice to make about whether to constructively take up their responsibility to support fact-based news and journalism or not.