Government Earmarks $8.5 Million for the CRTC to Enforce Link Taxes

The Canadian government has earmarked $8.5 million to get the CRTC to ruin the Internet with link taxes.

Earlier this month, the Canadian government tabled Bill C-18. The link tax legislation, which we analyzed, would compel search engines and platforms to pay big media outlets money for the privilege of sending them web traffic. The idea alone is incredibly backwards and shows that lobbyists run the show when it comes to lawmaking – common sense is completely out the window now. While some have said that this law is modelled off of Australia’s news bargaining code, the Canadian version is much more extreme in that it mandates payments for merely facilitating access to news. It truly is its own brand of shockingly bad legislation.

Of course, ruining the Internet was never going to come cheap. After all, the Internet is a big place – much bigger than most people realize even when you do use it on a regular basis. It is with that knowledge that it might raise a few eyebrows when one considers how much money is being pushed to the CRTC to enforce link taxes. As it turns out, it is a paltry $8.5 million. From Mobile Syrup:

The 2022 federal budget allocates millions to helping the Canadian Radio-television and Telecommunications Commission (CRTC) establish a framework for Bill C-18.

Minister of Canadian Heritage, Pablo Rodriguez, introduced the bill earlier this week. It’s aimed at having digital platforms, like Google and Meta, pay Canadian news outlets for using their content. The CRTC will serve as the regulator.

The budget will provide the agency with $8.5 million over two years. The funding will “establish a new legislative and regulatory regime to require digital platforms that generate revenues from the publication of news content to share a portion of their revenues with Canadian news outlets,” reports.

2020 saw $9.7 billion in online ad revenues, and Google and Meta shared 80 percent of the profits.

“The news sector in Canada is in crisis, and this contributes to the heightened public mistrust and the rise of harmful disinformation in our society,” Rodriguez said Tuesday.

So, let’s break down the numbers. $8.5 million over the course of two years. That, of course, works out to about $4.25 million per year. Let’s think optimistically and say that everyone working on enforcing the link taxes makes $40,000 per year. That works out to 106.25 employees. Of course, employees need managers, so let’s optimistically say 95 employees. Yes, there is the cost of procuring equipment, the cost of floor space in an office building, the benefits packages that come with employees, the spinoff staff such as contractors to keep buildings clean, etc. Still, we’re looking at the absolute best case scenario that really is unrealistic here.

Do you really think that 95 employees is even going to come close to managing all of that? Not in a million years. Of course, supporters are going to say that it’s not managing the whole Internet, it’s simply managing the largest platforms and how they handle news.

Well, if you look at just the political news sector, that might sound somewhat reasonable. That is just one sphere of news out there today. You also have to take into consideration the stock and business news sphere, the legal news sphere, the copyright news sphere, the advertising news sphere, fashion, celebrity news, the multitude of music news sectors, medical news, science news, technology, and the ridiculously large plethora of other news sectors. Are you really going to expect 95 people to not have a complete mental breakdown at the pure volume of news that exists out there today? Unreasonable doesn’t even begin to describe that.

So, why earmark so little money in the first place? It’s clear that the goal isn’t to actually look through the news sector and determine who is and isn’t an “eligible” news organization. This amount makes sense if you already know who is going to benefit and simply exclude the rest (and there is a LOT of “the rest”). It’s much easier to simply identify the largest news outlets and govern accordingly. If your a smaller outlet anywhere, that is reason to be concerned about this.

So, who would actually benefit from this? Safe bets include: Postmedia, Bellmedia, the Toronto Star, and, as the Western Standard points out, the CBC:

The CBC was the largest beneficiary of a cabinet bill to exempt news corporations from the federal Competition Act.

Bill C-18, which was introduced on Tuesday, allows Canada’s largest subsidized media companies to seek mandatory shares of ad revenues from Google and Facebook.

“We have had many discussions with Google and Facebook,” Heritage Minister Pablo Rodriguez told reporters. “I personally met with them.”

According to Blacklock’s Reporter, the Online News Act allows news corporations to skirt anti-trust laws in seeking collective payouts from social media corporations drawn from advertising generated by news content. According to a Department of Canadian Heritage statement, beneficiaries include “private and public broadcasters that produce and publish original news content online.”

As many know, the CBC is a publicly funded corporation. The Canadian government has already made large investments to keep the news organization going. Obviously, the other players that are in the private sector, also stand to benefit from this.

All of this points to how the talking point that this act is going to benefit all Canadian journalism outlets just received another nail in the coffin. $8.5 million isn’t even in the same province, let alone, in the same ballpark of where the budget would need to be if the lofty goal of benefiting all Canadian outlets was the goal in the first place. If anything, a more realistic number would be in the neighbourhood of $850 million. At that point, I can see this having a shot. $8.5 million is merely a drop in the Olympic sized swimming pool.

The only way this number could have possibly popped up as a reasonable number is likely from a mixture of a major level of ignorance about the nature of the Internet today and a very specific set of organizations that stand to receive the benefits already being in mind. Even if you really think that Google and Facebook are the only games in town when it comes to platforms and aggregators, it’s still unconvincing that this money is even close to being sufficient to handle it all.

A big reason is that you’re going to have a large swath of news organizations operating in Canada wanting their money too. How much time and effort do you think is it going to take to sift through all of those complaints? Unless you are going to reject absolutely everyone who comes asking, managing that is going to require significant time. You can also bet that at least one of those news outlets is going to send in the lawyers when things don’t go their way. That’s about as sure of a bet as buying a lottery ticket and expecting to get at least two numbers wrong on the draw. The link tax is a bad bill that is laughably poorly conceived. This is just further evidence of that.

Drew Wilson on Twitter: @icecube85 and Facebook.

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