Tech companies are threatening to pull news articles from their websites in Canada as legislation advances that would force them to pay news publishers for their content. Bill C-18, called the Online News Act, would mandate revenue-sharing agreements between Google, Facebook-parent-company Meta, and established news organizations.

This week, Meta warned it would get out of the news game in the country if the act passes. The bill, which it says aims to address the “significant bargaining power imbalance” between media and tech, has broad support and passed the House of Commons with roughly two-thirds of the vote.

Big Tech fights back

“If the Online News Act passes in its current form, we will end the availability of news content on Facebook and Instagram for people in Canada,” Meta Canada spokesperson Lisa Laventure told Straight Arrow News. “A legislative framework that compels us to pay for links or content that we do not post, and which are not the reason the vast majority of people use our platforms, is neither sustainable nor workable.”

“They’re a rational people and rational people behave in a rational fashion. And the rational thing to do is to get out of the news,” said Peter Menzies, former Calgary Herald publisher and former vice chair of the Canadian Radio-Television and Telecommunications Commission.

Laventure said it is the same position Meta took in the U.S. in 2022. At the end of the year, lawmakers failed to keep the Journalism Competition and Preservation Act included in the must-pass defense spending bill after fierce tech lobbying. But bill sponsor Sen. Amy Klobuchar (D-Minn.) is not giving up on the act, saying, “We must get this done.”

Google, which heavily lobbied against the JCPA, also appears to be considering a news blockage in Canada. This past month, it ran a 5-week test blocking news content for 4% of Canadians in opposition to the act as it moves through Parliament.

“It really surprises me that Google has decided that they’d rather prevent Canadians from accessing news than actually paying journalists for the work they do,” Canadian Prime Minister Justin Trudeau said.

Supporters of the legislation, introduced last year, say the act is about fairness and bolstering journalism in the country, which is steadily losing revenue to Big Tech.

“Free, independent, neutral, nonpartisan press is fundamental for democracy and it’s shrinking now,” Canadian Heritage Minister Pablo Rodriguez said. “Four hundred and fifty news outlets closed their doors and the money is all going to the big platforms. So what we’re asking here is for them to sit down, negotiate, right? Strike a deal.”

How Canadians consume news

A recent Maru/Public Opinion survey shows mainstream media sources still dominate how Canadians get their news. Forty-five percent tune in to an evening broadcast, while 29% report getting their news from television news and newspaper websites and 24-hour television news stations.

About a quarter of respondents did report turning to social media sites like Facebook and Instagram, while Twitter commanded 14%. Respondents could select multiple categories for news consumption.

But when isolating respondents to those aged 18-34, the largest share of news consumption, 35%, did come from social media sites like Facebook and Instagram, both owned by Meta. Meanwhile, 23% said they got news from Twitter, 20% from TikTok, and only 21% from an evening television news broadcast.

But the internet’s economic blows to newsrooms started years before social media platforms, as Menzies explained.

“The amount of money that we used to make in classified revenue pretty much paid for the newsroom,” the former Calgary Herald publisher said. “And that wasn’t Big Tech, in a sense, taking it away. That was Craigslist and in Canada, largely a company called Kijiji. And they didn’t just steal, I mean, they gave it away for free. They took stuff that you were charging 25 cents a word for.”

Money matters

Canada’s Parliamentary Budget Office estimates the ad-revenue-sharing legislation would give news publishers an additional $329 million per year. Just shy of $250 million would go to broadcasters. Menzies said the biggest share would go to Canada’s public broadcaster, CBC, while the second biggest share would go to CTV News, owned by the very profitable Bell Media. About a quarter of the annual funds would go to newspapers and online media.

“The poor may eat but the wealthy will dine,” Menzies said.

Canada’s lawmakers are inspired by Australia, which passed similar legislation in 2021, pushed forward by Rupert Murdoch-owned NewsCorp. Despite initial pushback from Google and Meta – Facebook even briefly shut down its news feed in the country – Australia said the tech companies have now inked more than 30 deals with media outlets for content that generates ad dollars.

The Australian law says that government can appoint an arbitrator to decide a final price if the two parties fail to reach a commercial deal independently.

“The Australian model is a piece of government legislation which is sort of being held like a hammer behind your back that says, ‘Okay, you guys sort this out,’ and then you leave people free to sort it out and you say it’s working,” Menzies said.

Canada’s version, as it stands, is a lot more hands on. It includes mandatory regulation, unlike Australia.

“We want to make sure that news outlets receive fair compensation for their work,” Rodriguez said. “We want to make sure that local, independent news thrives.”

But Menzies said he worries the financial windfall newsrooms stand to gain could come at a hefty price.

“The two biggest things we have to worry about in our life, or that can control our lives, are government and Big Tech,” he said. “How are you going to trust your media to hold their two most important clients to account?”

Industry experts believe if C-18 is successful, versions will quickly be adopted in other countries around the world.