As Small Players Left Out, Bill C-18 Amendment Means News Production Optional to Benefit

An amendment to Bill C-18 (Link Tax) means that producing news is now optional. This as smaller players are left out.

A long standing argument from Big Publishing and the government is that Bill C-18 is needed because journalism is suffering due to decreasing ad revenue. What’s more is that Big Publishing has long falsely claimed that social media platforms are benefiting from the news of journalists without compensation. Both of those arguments have now officially died at the hands of the very government pushing for this legislation.

Since it’s been a while since we covered Bill C-18, we should point out that we published an analysis of the bill a while back. In that analysis, we pointed out how smaller players such as us have no way to opt out of such an archaic scheme. If we don’t agree with charging for links to our website, that’s too bad. Platforms would be forced to pay for those links anyway no matter how much we disagree with it. Then, on top of it all, the section about eligibility means that there is no way we can benefit from this link tax in the first place. Instead, that money would go to news cartels, or the biggest players in the industry. In short, it’s basically theft by law.

Because of this, smaller players like Freezenet and the many other digital outlets would be faced with a permanent market disadvantage thanks to this law. It’s completely unfair. This isn’t even getting into how absurd and illegal (under the Berne Convention) this whole idea of mandating payments for mere citation and quotation of materials is in the first place.

News Production Becomes Optional

So, with that, the legislation has gotten even worse if you can believe it. In recent weeks, the legislation is going through clause-by-clause review of the bill at the House of Commons level. This was after a series of hearings where the whole process became little more than a sorry joke – so much so that I chose not to offer in-depth analysis of the hearings due to lack of value one can derive from it. Amendments are being considered and voted on. One amendment that was not only proposed, but passed, was to allow traditional broadcasters who don’t produce news at all to benefit from the link taxes after. From Michael Geist:

There may also be an effort to incorporate a journalism standard to this definition, since at the moment the requirements are limited to employment, Canadian operations, and producing general news content.

Yet the reality is that MPs already supported an expansion of the definition that not only eliminates journalism standards, it may not even require the production of news. The amendment, first proposed by NDP MP Peter Julian but subsequently amended by Liberal MP Chris Bittle, expands the scope of eligible news businesses in Section 27(1)(a) from QCJOs to campus, community or native broadcasters licensed by the CRTC under Section 9(1)(b) of the Broadcasting Act:

“as defined in subsection 248(1) of the Income Tax Act, or is licensed by the Commission under paragraph 9(1)(b) of the Broadcasting Act as a campus station, community station or native station as those terms are defined in regulations made under that Act or other categories of licensees established by the commission with a similar community mandate”

Why does this matter?

First, under this amendment, any of these broadcasters automatically qualify as eligible news businesses. Unlike those that qualify under QCJO or Section 27(1)(b), there is no review of their operations or consideration of whether they produce general interest news. Rather, the provision states that the CRTC must, by order, designate it as eligible. This creates a massive loophole that renders of hundreds of broadcasters as eligible news businesses without any regard for whether they actually produce news.

Second, there is no iron-clad requirement under these licences to produce news. The CRTC standard of licence for community and campus radio stations requires that at least 15% of programming be “spoken word”, but its rules do not limit spoken word to news content. While there have been some CRTC decisions that have required these stations to air news content, there may well be stations that do not air news, yet are now incredibly treated by Bill C-18 as eligible news outlets. In fact, even for those that do air news, it is hard to see what that content has to do with links on Google or Facebook (or even if links to news content exists on those platforms) that might merit compensation.

Third, this loophole opens the door to a trade challenge, since one of the requirements for a Section 9(1)(b) licence is Canadian ownership. By limiting entities that may qualify as eligible news outlets without regard for Canadian employees or Canadian news production to Canadian owned entities, there is a risk of a trade challenge under CUSMA for discriminatory treatment.

I fear the answer lies in an abjectly broken process. The bill was driven by media lobby groups who self-censored their editorial pages to support swift passage and was backed by those who were willing to trade good public policy for the hope that Google and Facebook cash would solve the problems of legacy media companies. Once the bill arrived at committee, the government limited the number of experts who appeared as witnesses, largely ignoring critics or experts who might have identified potential problems. During clause-by-clause, the government isn’t much interested in serious amendment, with one Liberal MP robotically claiming most amendments are loopholes for big tech and another characterizing digital news outlets as not real news. Meanwhile, Heritage official Owen Ripley is apparently the only person in government capable of answering questions on both Bills C-11 and C-18, meaning that he has been running from one hearing to the next with 10 hours of review each week. This is no way for a G7 country to make law with enormous ramifications for freedom of expression, leaving Canada in, well, dire straits when it comes to digital policy.

Canada Finally Admits There is a Trade Issue With Bill C-18

Last week, the US renewed its concerns with both Bill C-11 and Bill C-18. Indeed, there is plenty of evidence to support the fact that both bills raise serious international trade issues between both countries. At the time, Canadian officials caught controversy by intentionally leaving out the comments in their readout, leaving the American readout the only one to reference these concerns. Critics point out that this was a signal that Canada was trying to ignore the issue and hope it all goes away on its own. It’s basically like starting a fire in a room and then just closing the door, hoping the problem goes away on its own.

Of course, wishing away your problems is typically a bad way to handle them. Recently, it seems that Canadian officials have finally admitted that they have a major international trade obligation problem on their hands with Bill C-18. From the Globe & Mail (probably paywalled):

At a news conference in Ottawa on Friday, Ms. Ng admitted that both bills had come up at the meeting on trade.

“Of course there are going to be issues, and today this is one of them,” she said. “And I’m confident that we will need to work through them with our trading partner.”

She added that she had “reassured the U.S. Trade Representative that Canada’s commitment to compliance with trade obligations is one we take seriously.”

So, this really was a baby step back with the admission that the American’s are, indeed, raising this issue. During the first Bill C-11 hearing, Global Affairs told Senators that the American’s were simply looking for information about the process. Those comments, of course, were at odds with the first time the American’s raised concerns about Bill C-11. Throughout the whole hearing, Global Affairs was basically denying that there was a problem or any real expression of concern in the first place.

Despite this shift in admitting that there is a trade storm brewing with the US, the Canadian ambassador seems to still be blowing off these concerns. The language in that excerpt seems to suggest that the American’s don’t seem to understand the bill and that they just need to explain how it all works to make the issue all go away. It’s a very common approach by the government to basically insult other people’s intelligence by pretending that those who are raising issues with the bill don’t know what they are talking about and that it’s almost an educational problem. Of course, the problem is, the facts are stacking up significantly and observers and critics actually do know what is going on and the governments approach comes off as talking down on everyone else. Still, it seems to be the approach the government has taken and they are applying it to the countries largest trading partner, so, sarcastically speaking, good luck with that.

Smaller Players Left Out

Of course, as we mentioned at the beginning, the bar for small players to qualify is extremely high. So much so, that many community news organizations won’t even qualify. This over top of the many digital start ups such as us who would probably never benefit from such a scheme in the first place. Also from the Globe & Mail (probably paywalled):

On Friday, a Conservative amendment designed to make community newspapers that employ only one journalist eligible for the payments was voted down by the Liberals and NDP.

Conservative MP Kevin Waugh, a former TV journalist, said that in Alberta and Saskatchewan more than half of community newspapers may not have the two regularly employed journalists required to qualify for compensation under the bill.

He said it was “despicable” that the government had refused to back the amendment designed to help newspapers struggling to keep going on tiny budgets.

The NDP put forward an amendment, backed by the Liberals, that would make it easier for small papers to qualify by allowing one of the two journalists to be a paper’s owner or publisher.

Owen Ripley, an associate assistant deputy minister who represents the Heritage Department at the committee, admitted that many small community newspapers would not qualify for compensation, even with the NDP change to the bill.

He said the two-journalist threshold was designed to differentiate between bloggers, “citizen journalists” and news organizations.

University Law Professor, Michael Geist commented that this is all a case of picking winners and losers in the market:

Mastodon backup:

So, between allowing some old traditional broadcasters to benefit without producing any news at all, and blocking the smaller digital startups from qualifying, the idea that this bill is about fairness and supporting journalism has now been critically compromised. Even the weak facade that this was about supporting journalism is now gone. What’s left exposed is what critics have been calling this all along: a massive shakedown to benefit the biggest players in the industry at the expense of all the smaller players.

Drew Wilson on Twitter: @icecube85 and Facebook.

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