Among the many elements contributing to the devaluation of democracy over the past two decades, the financial and reputational weakening of journalism has been a key factor. Most recently, the Big Tech platforms that both compete with news organizations commercially and undermine the truth by disseminating propaganda have reached a compromise with mainstream publishers in democracies that, for now, seems to satisfy both. How will Canada adapt that model in a way that protects its citizens in an evolving information ecosystem? 

Jamie Irving and Paul Deegan

In a column published in September, David Walmsley, editor-in-chief of the Globe and Mail wrote, “Making a positive difference to someone’s life is the greatest gift a journalist can give. Perhaps an individual is heard for the first time, or an injustice is settled. Those moments when a news editor picks up a phone to hear a scared voice say, ‘You are all I have left, I have nowhere else to turn.’ The last stand between hope and defeat. It is a sacred contract, as old as journalism itself.”

Spot on. The question is: how do we ensure journalism not only survives but thrives in the digital age?

Clearly, the news publishing industry is challenged. After peaking at more than $4.6 billion in 2008, Canadian newspaper revenues fell to below $1.5 billion in 2020. During that period, Google and Facebook saw their combined Canadian revenue grow from a little over $1 billion to over $8 billion. Today, Google and Facebook enjoy more than 80 percent of online advertising revenues. 

As a result, we’ve seen community papers shuttered, page counts reduced, and far too many good journalists let go.  

During the 2021 federal election campaign, the Liberals, the Conservatives and New Democrats all made commitments to introduce news remuneration legislation.

Why do we need legislation?

First, the need for strong, independent local news has never been higher – it keeps communities connected and informed on issues that are impacting them directly. Covering city hall, provincial and territorial legislatures, our courts, and indeed holding our parliamentarians to account is vital to our democracy. According to Pollara, a leading research firm, Canadians agree: 90 percent of respondents said they believe it’s important that local media outlets survive, and 80 percent said legislation was needed.

Second, there is a significant imbalance of power between tech giants and Canadian news outlets. To put this in perspective, the market capitalization of Google is about $1.8 trillion; Meta is over $500 billion. Together, that’s in the ballpark of the GDP of Canada.

Third, with the prospect of legislation, Google and Meta started picking winners and losers. They negotiated content licensing agreements with a dozen or so publishers, including Le Devoir, The Globe and Mail and the Toronto Star. More recently, Google signed a deal with Postmedia. As William Turvill of the UK-based Press Gazette noted, “There is some evidence to suggest that the threat of this legislation is already paying off for Canadian publishers … Google, perhaps in anticipation of Ottawa’s crackdown, has already started offering more generous payments for signing up to (Google) News Showcase.”

Don’t get us wrong. We’re happy for those publishers. They should be getting compensated for their content. But we now have a situation of haves and have nots among Canada’s news publishers. And that’s not fair – especially to smaller publishers who have been left out in the cold.

As the government looked around the world at different models, they settled on a model which is similar, but an improvement on what the Australians have done. We believe the Australian approach is far better than simply taxing the web giants and then getting government in the business of redistributing the monies to publishers. Picking winners and losers isn’t something government is particularly good at, and publishers deeply value independence.

Former Australian prime minister Scott Morrison’s government introduced the News Media and Digital Platforms Mandatory Bargaining Code in February 2021. The initial reaction from Google was, “It would give us no real choice but to stop making Google Search available in Australia.” Meta’s response was even more hardline, “People and news organizations in Australia are now restricted from posting news links and sharing or viewing Australian and international news content on Facebook. Globally, posting and sharing news links from Australian publishers is also restricted.” Under pressure, both companies backed down.

In April 2022, Heritage Minister Pablo Rodriguez introduced C-18, An Act respecting online communications platforms that make news content available to persons in Canada.

Why do we at News Media Canada support this legislation?

First, it allows us to negotiate collectively. Currently, the Competition Act bars us from forming a collective. Given the overwhelming power imbalance, publishers will be in a stronger bargaining position if they stand together.

Second, it includes an enforcement mechanism. Baseball-style final offer arbitration ensures that parties put their best offer forward and the arbitrator picks one or the other. The hammer of arbitration incents both sides to reach a fair settlement on their own.

Third, similar legislation in Australia is working. According to a report by Rod Sims, the former chair of the Australian Competition & Consumer Commission, the amounts paid to news organizations are over $200 million annually. More important than how much, is who reached content licensing agreements. Country Press Australia, an affiliation of 160 smaller regional newspapers, was able to reach settlements with Google and Meta. More recently, a group of 24 small Australian publishers reached a deal with Google. 

According to Robert Whitehead, digital platform initiative lead with the International News Media Association, “There’s no question that small- to mid-size publishers have been the surprise winners from the Australian media bargaining code. The big three commercial players started the momentum … but it has been the smallest players who have gained the most, relative to their size.”

In an article written by Bill Grueskin of Columbia Journalism School, he refers to a journalism professor in Sydney, “She can’t persuade many students to take internships these days because it’s so easy for them to land full-time jobs—and that change coincides with the gusher of code money: “I swear to God, I have not seen it like this in 20 years.” 

As a matter of principle, we believe that publishers, large and small, should benefit equally from any settlement – based on their proportionate investment in newsroom employees. We have developed an approach that we believe is transparent and fair to members of News Media Canada and the National Ethnic Press and Media Council who wish to participate. Simply put, any settlements from collective negotiation would be shared among publishers on a pro rata basis – based on their total salaries and wages paid to eligible newsroom employees – less expenses associated with collective negotiation. A recent report from the Parliamentary Budget Officer estimates that news businesses will receive total compensation of $329.2 million annually from digital platforms.

Going forward, Google and Meta have roles to play in the news media ecosystem. It is in their self-interest to have rich, trusted content that our journalists produce. At the same time, they enjoy a dominant position in the marketplace, where search and social engines are designed to keep the user within a walled garden and extract value from content. As publishers, we simply want to be able to come together collectively to negotiate fair value for the content our journalists produce, so we can reinvest in our newsrooms.

C-18 is important legislation that will help stop the bleeding in Canada’s news publishing business, but it alone is not a silver bullet. There are other measures that governments can take.

First, the Competition Bureau needs to investigate the dominance of Google and Facebook in Canada’s online display advertising market. Anti-competitive behaviour results in higher prices, reduces choice, hinders innovation for ad tech services, and harms advertisers, publishers, and consumers. Second, the federal government should eliminate commercial advertising associated with CBC/Radio-Canada’s news properties and shows. 

Third, under the federal Directive on the Management of Communications, heads of communications can currently purchase media space directly from media outlets for campaigns that have a total media buy of $25,000 or less. We believe their discretion should be increased to $100,000. Fourth, the federal government should align federal advertising procurement practices with its broader socio-economic objectives. Support for trusted sources of information (i.e., local newspapers) should be given preference over social media companies that do little to address hate speech on their platforms. According to the Annual Report on Government of Canada Advertising Activities 2020 to 2021, the Government spent $11,649,636 on Facebook/Instagram advertising, which is greater than all federal government print advertising combined, which stood at $9,312,472.

Fifth, provincial governments should follow the enlightened approach of the Ford government in Ontario and exempt newspapers from extended producer responsibility levies aimed at reducing waste packaging. Newspapers are a vital product that provide a public good; they are not waste packaging.

Across Canada and across partisan lines, now is the time for our elected officials to act. News deserts provide openings for disinformation and fake news, which undermine social cohesion and our democracy. As the Globe and Mail’s Walmsley has wisely warned us, “A world where people are blinded from facts is a dangerous one.”  

Jamie Irving is Chair and Paul Deegan is President and CEO of News Media Canada, which represents news publishers who employ 3,000 journalists in every province and territory of Canada.