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Blame News Layoffs on the Feds’ Fumbled ‘Pot of Gold’

Media policy expert Michael Geist on the ‘disastrous’ Online News Act, the Zucking of Canada, self-serving spin and more. A Tyee interview.

Sarah Krichel 21 Feb 2024The Tyee

Sarah Krichel is The Tyee’s social media manager.

When news broke earlier this month that 4,800 employees — including 200 journalists — were being dumped by Bell Canada to save $250 million a year, Prime Minister Justin Trudeau blasted the company for its “garbage decision.”

But the federal government has made poor decisions of its own when it comes to shoring up Canada’s reeling journalism sector, argues law professor and influential media blogger Michael Geist. In his view, the Trudeau government’s media policy has been “disastrous,” causing newsrooms to go without hundreds of millions of dollars the feds once promised were on their way.

Geist has been a steady critic of the Online News Act or Bill C-18, which sought to make the biggest digital platforms — Meta and Google — strike private deals and pay news publishers for their content shared on those platforms.

Less than two months since the Online News Act came into effect, Geist, who holds the Canada Research Chair in internet and e-commerce law at the University of Ottawa, argues the legislation ended up undermining the very reason it was born in the first place.

The Online News Act was supposed to level the uneven playing field after tech companies swamped the ad business the journalism industry once largely relied on, argued Ottawa and many in the sector. The major platforms would be required to pay news outlets for content they used.

But Mark Zuckerberg’s Meta responded by banning all news links from Facebook and Instagram, removing the need to pay. That took a significant toll on traffic and discoverability for publishers — especially tough for small and startup publications, such as Eagle Feather News and Torontoverse, both of which have announced they are on publishing hiatus.

On Nov. 29, the Canadian government announced it had reached a deal with Google stipulating that the search engine will provide the Canadian news industry with a capped $100 million annually.

Some speculate about half of that is new money and half represents previous deals Google already had made with news outlets, notes Geist. Meta, meanwhile, has pulled tens of millions of dollars it was providing to Canada’s news media sector in business arrangements, he adds. And the government now has placed caps on which sectors get what from Google’s $100-million fund — something former heritage minister Pablo Rodriguez initially said government wouldn’t do.

“At the end of the day, many media organizations have ended up with less than they had before. I suspect there will be some other shoes to drop coming out of legislation that simply hasn’t achieved anything close to what its proponents hoped it would,” Geist tells The Tyee.

On Feb. 13, the Canadian Radio-television and Telecommunications Commission outlined next steps for the enforcement of the act, including a plan to hold public consultations on how arbitration should work should platforms and publishers be unable to come to deals themselves.

But since Google is on its way to being exempted and Meta banned news altogether to avoid being captured by the bill, it isn’t clear if the CRTC will need to arbitrate negotiations between any platform and Canadian news publishers.

Bell Media isn’t the only large journalism corporation facing mass layoffs: in December, CBC/Radio-Canada axed 10 per cent of its workforce as well as some of its programming as it faced a $125-million budget shortfall.

Meanwhile, newsrooms await the fate of the Local Journalism Initiative, a federally funded grant that has employed hundreds of journalists without any government interference in what they cover. It is set to expire at the end of March, with no news on whether it will be renewed. (The Tyee is a recipient of the LJI.)

The Tyee caught up with Geist to gain his perspective on what now can be expected from the Online News Act, how well media covered the issue and what other media legislation to pay attention to right now. This conversation has been edited for length and clarity.

The Tyee: In your opinion, when and where did Bill C-18 go wrong?

Michael Geist: Premising the legislation on linking was a mistake. The idea that those delivering traffic ought to pay me for the privilege of doing so never made sense. It meant companies, given the choice, could choose to stop linking and thereby comply with the law.

The government and the groups lobbying for the legislation made a bad bet that those companies could not live without Canadian news. News is the worst kind of content for Facebook: it sends people off-platform.

Google needed the news, not because of the ad revenue, but because of the desire to have a comprehensive search engine. So, they were willing to pay something for that. But I think the government fundamentally misread the market. And I think we must lay blame not just with the government but with the media groups that lobbied for this.

Have you seen any precedent for this?

I have never seen anything like this. You have the government saying, first, that it will be up to the two sides to negotiate. Well, the regulations directly say how the money’s going to get allocated. A cap of 30 per cent for broadcasters; cap of seven per cent for the CBC; the rest for traditional print and digital; lastly, administrative costs.

And there’s a provision in the regulations that says the resulting deal has nothing to do with facilitating access to news. They literally tossed aside the very reason for the law to begin with and made it clear this was nothing more than a shakedown. I think it makes them subject to be challenged.

Why do you think a legislation forcing tech and media to strike private deals worked in Australia and not here?

The notion that it worked needs to be interrogated. It was a short-term win, because there’s considerable expectation that Meta will walk away from that market as well.

There isn’t a lot of transparency about where the money generated went. The attempt to block news in Australia was very ham-fisted by Facebook. The blocking was short-term — it lasted like a week. And both sides — government and Facebook — realized this was bad for everyone and so were willing to come back and negotiate. But by the time they reached Canada, [Meta] had a far better idea of what blocking would mean and proceeded in a much more deliberate fashion.

What is the most telling example of how the bill has impacted Canadian news tangibly so far?

Many of the effects are things that don’t happen. Some layoffs and closures could be interpreted as a signal that some were holding out hope for a big pot of gold. When that didn’t materialize, they moved ahead with layoffs or closures.

We can even see some online sites that shut down or decreased their activity in part as a response to what’s taking place. Torontoverse was a very public example of a site dependent on social media for its growth.

People in the industry tell you that the smaller a digital startup you are, the more reliant you are on social media. I suspect there are other cases, either of established outlets that had to change their plans, or those that were thinking of entering a market in which the most important platform for disseminating your product is no longer available, and so it’s no longer a market you want to invest in.

How do you think Canadian media performed covering the making of the Online News Act?

It was the most obvious manifestation I’ve ever seen of the biases that seep into Canadian media coverage when there’s financial self-interest at play. Not with respect to individual reporters, but the editorials.

The Tyee had its perspective. The larger outlets — the Torstars, the Postmedias of the world — were a non-stop conveyor belt of supportive op-eds for the legislation with almost nothing on the other side. Postmedia criticizes Trudeau on everything and somehow C-18 was the bill that could do no wrong. Torstar ran for almost two years sort of a ‘Big Tech Is Evil’ series, and then promptly stopped the series once they got the legislation. They devoted a full page to making it blank and to say, ‘This is what the news will look like if this bill doesn't pass.’

I haven't read The Tyee piece on wildfires, but I mean, communities aren't worried about whether they can get Facebook. That's not how they would get access to the news. And yet the media ran with that story, egged on by the government, even though it was frankly a non-story.

The core access to information would have come from radio and from the government itself, which continued to be online. It was to me emblematic of the government and many in media working in concert to push forward a particular perspective on their legislation — especially once it had become clear that they blundered.

There was talk of the U.S. trying to do something like Australia's and Canada's legislation. How do you see this playing out for international players that were looking to these two countries as guinea pigs?

Ultimately Canada becomes a model for what not to do. It's very difficult to reach a conclusion other than it didn't work out and the harm that was created far exceeded the benefits.

And now Meta has made it clear it will carry through on its threat to move away from news.

Given the company's global de-emphasis on news, most countries would recognize that if you try to call their bluff, it’s not a bluff. If we feel these companies don't make an adequate contribution, the best way is to tax them.

We’ll no doubt see arguments that the provinces need to kick in the same way the feds are kicking in. This game of demanding payments is almost as old as the sector.

We have Bell lay off thousands of workers and sell a bunch of radio stations. They made $450 million last quarter, and they said part of the reason for this was the government and CRTC moved too slow on C-11 and C-18. In other words, ‘You moved too slow forcing Google, Facebook, Netflix, Amazon and Disney to pay for our news.’ This kind of thing doesn't end.

What is the solution to the funding crisis in journalism, in your opinion?

Let me distinguish between ensuring that the tech companies make a fair contribution, which is part of the premise for this, and the way to do that is to ensure that they're appropriately taxed.

My view would be that the Local Journalism Initiative was probably the best model for it. It's far safer ground if we fund actual journalism through arm's-length approaches, as opposed to models that seem to just subsidize the entities themselves in what amounts to direct payments.

If our view is that there is a failure to support much-needed journalism, then, OK, let's think about mechanisms to try to do that. But much of what we've seen is an effort to prop up failed or failing businesses. That's not the same thing.

Your reporting and writing take place on your own blogging website. With the rise in popularity of Substack and other forms of individually branded, independent reporting, can you talk about the pros and cons of this work compared with a formal media outlet? How does it fit or fill a gap in the industry?

For about 20 years, I wrote a weekly or biweekly column either for the Globe or for the Star. Overtime, those disappeared. My work was reprinted in The Tyee for quite a while. Now I publish the occasional op-ed, but I feel far less urgency to do so. The various online platforms — whether it's my own blog or Substack or podcasts — can be just as effective.

There are times where I’d love to get in front of that bigger audience. But websites and social media get clipped, so in terms of the ability to ensure what you're saying is seen by some of the people you want it to be seen by, and to make it as accessible as possible — it’s provided a pretty good replacement.

I think many were getting Online News Act updates from you before they would from other outlets, and more frequently, too.

Much to my family’s chagrin. I'm happy that I've carved out a space where people look to me as a reliable source. There are lots of people using Substack or a blog or whatever tool to put information out into the public sphere and it's expert information that provides far more than a typical mainstream media piece can.

This is a long conversation for me with a reporter, but it has been an interesting one. Usually, conversations are a lot shorter. They provide the proverbial he-said-she-said. There's a short quote, there's a short quote from someone else, there's another quote, one more quote, and there's your story. And the ability to post 1,000 words and link to source documents and do a podcast on it provides people with the ability to educate themselves in a way that it's difficult, frankly, for general interest mainstream sources.

What legislation are you covering that people should be paying attention to right now?

The two bills that should get attention: One is C-27, which is privacy and AI, which has big implications well beyond the news. Updating our privacy laws and trying to develop appropriate regulations around artificial intelligence is critical.

The other that’s less on people’s radars but I think should be is Bill S-210, passed in the Senate. It mandates age verification for accessing sexually explicit images online. It takes a broad approach to the content covered and the sites themselves. We're not just talking about Pornhub. We're talking about Google, X or frankly any social media site that contains these images would be scoped in. And it envisions blocking websites that refuse to comply with court orders. But it's one of those laws that, you know, everybody wants to protect the kids — rightly so. So, there's some reluctance amongst some to oppose it for those reasons.

This article is part of an occasional series on how Canadian media became intertwined with major tech platforms, and how it’s affecting Canadians and their access to journalism.

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