Ottawa prepares to squeeze big U.S. tech firms over loss of revenue for Canadian news outlets
Advocates for Canada’s news media sector have welcomed the federal government’s clearest pledge yet to squeeze web giants for compensation. But there’s evidence it will be a long, difficult process.
Major U.S.-based tech firms such as Facebook and Google have long been accused of funnelling advertising revenues away from Canada’s struggling news organizations while not paying the outlets for their copyrighted content.
In its throne speech on Wednesday, the Liberal government put it this way: “Web giants are taking Canadians’ money while imposing their own priorities.”
In the speech, read by Gov. Gen. Julie Payette, the government vowed, “Things must change, and will change.”
Canadian Heritage Minister Steven Guilbeault has been signalling his intent to take on the Silicon Valley companies for months, but amid the COVID-19 pandemic and an economic crisis, there was no guarantee that it would remain a legislative priority.
Bob Cox, publisher of the Winnipeg Free Press, said after the speech that he was encouraged by the government’s message.
“We’ve felt for a long time that we’re contributing a lot to these platforms and getting nothing back,” he told CBC News in an earlier interview. “It’s because we’re in this essentially powerless position that we’re asking government to intervene.”
His newspaper is among countless media organizations across the country imperilled by an ongoing loss of ad revenue, compounded by the pandemic.
A tally by the Canadian Association of Journalists at the end of April found that 50 outlets had recently closed and 78 had cut staff, resulting in 2,053 job losses.
Friends of Canadian Broadcasting, an advocacy group, now estimates the job cuts in journalism have surpassed 3,000 since COVID-19 struck in the early part of the year.
Some news outlets have benefited from Ottawa’s wage subsidy program during the pandemic — and a tax credit-based media bailout before that — but the loss of revenues to web giants is seen as a longer-term threat.
“This is a six-alarm fire, and the government needs to act right now — this parliament — to start imposing the rule of law over these Silicon Valley giants that are cratering our industries,” said Daniel Bernhard, executive director of Friends of Canadian Broadcasting.
Cox and Catherine Tait, president and CEO of CBC/Radio-Canada, were among the Canadian media executives who signed a joint letter to all federal party leaders in February, demanding fairer rules surrounding competition, copyright and taxation for online content.
Media, tech firms have complicated relationship
Guilbeault has been working on a plan to address the imbalance between Canadian news organizations and the web giants. As it stands, platforms like Facebook and Google can share headlines and snippets of news articles without directly compensating the outlets.
What’s more, the tech firms sell advertising on content they didn’t create.
It’s a complicated relationship, however. Local and national media outlets also rely on web traffic driven by search engines and social media platforms — some of the sites most visited by Canadians.
In a blog post on Thursday, Google underlined it “sends Canadians to news sites millions of times a day for free.”
“Helping journalism survive and thrive is of the utmost importance to us,” the company said.