The tawdry tale of Canada’s Online News Act reached its final twist this week with the federal government announcing an agreement with Google to fund news organizations. Heritage Minister Pascale St-Onge called the deal “historic,” denying any concessions on the government’s part, although many are skeptical given the evidence.
For the past two months, the Canadian government and news industry lobbyists who promoted the act (Bill C-18) desperately tried to placate Google to prevent it from following in the footsteps of Meta, which blocked news links in Canada in response to the new regulations. Google needed regulations to address its concerns and cap its financial liability.
After much negotiation, the government manipulated the regulations with Canadian Heritage and secured an agreement that would disarm Google and pay the amount it was willing to pay, which was $100 million. This new deal forced news organizations to form a single collective, but the details on membership and roles within the collective remain unclear.
While the deal was initially designed to enforce “commercial” agreements, it resulted in a fund similar to the one proposed by Konrad von Finckenstein and in “And Now The News” for the Macdonald-Laurier Institute. However, it is likely the amount of money flowing from Google to these publishers will be diverted to the collective pot, meaning the net benefit of the deal is likely less than $100 million. With Meta’s exit from the game, the Canadian media industry lost about $150 million in revenue as a result of Bill C-18.
Legacy newspaper publishers, the group hardest hit by the internet, originally promoted the Online News Act. When broadcasters became involved, the $100 million fund will likely disproportionately benefit broadcasting organizations, leaving only $25 million for the financially desperate legacy print publishers who already had deals with Google.
Although the settlement with Google prevented a catastrophic de-indexing of news from its search engine, Bill C-18 still has significant issues, caused by a government determined to “help.” The impact of the act has indeed been historic, but not in a positive way.