Google and the federal government reached a new deal over the Online News Act (Bill C-18). Google will continue to share Canadian news on its search engine. However, the company will pay news companies an annual fee of $100 million.
Over two weeks ago, Heritage Minister Pascale St-Onge confirmed the agreement.
“This agreement is the result of our government’s work in responding to calls from the independent news sector. As our media ecosystem transforms, this takes into account the rise of new digital technologies and tech platforms,” said Minister St-Onge to journalists at Parliament Hill.
The law comes into effect on Dec. 19. Because of this $100 million deal, Google is exempt from the Online News Act. The first part of the legislation’s regulations is published here. The second part will be published on Dec. 20.
This new agreement comes after a months-long dispute between Google and the federal government. Google previously announced it would remove links from its news products in Canada due to several concerns, including the legislation’s “structural issues.”
Bill C-18 is a piece of federal legislation. It requires tech companies like Google and Meta to compensate Canadian media companies that share news on their platforms.
The bill aims to boost the Canadian media industry’s decline in advertising revenue. Meta retaliated against the bill, blocking the news-sharing feature on Instagram and Facebook in Canada.
“In 2022, online advertising revenues in Canada were $14 billion, with two platforms receiving roughly 80 per cent of these revenues. While digital platforms earn billions in online advertising, more news outlets shutter each year, due in large part to a loss of advertising revenue,” said the Canadian government.
Kent Walker, the President of Global Affairs for Google, released a statement thanking Minster St-Onge over their new deal.
“We are pleased that the Government of Canada has committed to addressing our core issues with Bill C-18, which included the need for a streamlined path to an exemption at a clear commitment threshold,” says Walker in the statement.
Despite Walker’s appreciation, Google still maintains that the legislation is “fundamentally flawed.”
Initially, the federal government estimated that Google should compensate $172 million to the Canadian news sector. This differs from the actual $100 million agreement made.
Thomas Klassen, a professor of public policy at York, notes the contrast between the estimate and the actual agreement made. Klassen says that neither side typically gets what they want with any negotiation.
“Sure, the government got less money than it asked for, but it did get $100 million per year from Google. It may get more in the years to come now that there is a precedent that platforms like Google must pay when they post news stories,” explains Klassen.
Google also raised concerns with the negotiation models for news media organizations. With this new deal, the company is set to negotiate with a single point of contact that represents all Canadian news and media organizations.
Despite the law underway, concerns were raised about how the government would allocate the money.
Bruce Corcoran, the general manager and co-owner of the independently owned Chatham Voice, says he’s happy to see the deal come through. However, he has expressed concerns about how smaller news outlets would qualify and receive the funding.
According to a recent report by the Canadian Press, CBC/Radio-Canada will receive at most $7 million from the annual fund. At most, $30 million is reserved for other broadcasters. Qualifying newspapers and digital platforms will share the other $63 million. The regulation says the fund will also benefit independent, Indigenous, and official language minority news outlets.
Corcoran hopes this new deal will make Meta reconsider its position. Corcoran cites a couple of examples of how Meta’s news blocking impacted journalism in his community. When a storm hit his municipality in August, The Chatham Voice couldn’t share vital information with the public on Meta’s social media platforms.
“Meta’s move to ban posting of any kind by Canadian news outlets was, in my opinion, designed to hurt the little guys more than big corporate media,” says Corcoran.
Klassen concludes, “I do think that Meta will come around. Now that Google is onboard, it is difficult for Meta to argue that it cannot pay for the news it shares.”
