Senate Hearings on Bill C-18 – A Look At Hearing 3 (Segment 1)

We are now looking at the first segment of hearing 3 in the Bill C-18 senate hearing. This after some weird stuff happened in the schedule.

We are now continuing our extensive coverage of the Bill C-18 senate hearings. After a rather odd moment of a whole hearing seemingly vanishing into thin air, the next one appears to be available. So, we are happy to check that one out.

Before we get into that hearing, though, we wanted to showcase the previous pieces of coverage of these hearings:

Past Hearings Covered

Hearing 1 – Heritage Ministry officials / Lobbyists / Konrad von Finckenstein
Hearing 2 – Missing/Not Available

So, we are now entering week two of these hearings. For those who are wanting to follow along with what we saw, you can check out the video we are following here. With that, let’s jump into this next hearing.

Opening Statements

Peter Menzies kicked off the hearing with his opening statement. He said that there are a great many problems with Bill C-18. Those include its constitutional legitimacy, it’s possible impact on trade agreements, it’s bias of the status quo at the expense of the future, and the lack of evidence to support its economic rationale. To many people, forcing social media to subsidize news organizations makes no more sense then forcing Amazon to subsidize The Bay. Yet, here we are. He said he will try to focus on Bill C-18’s inappropriate outcomes.

About a quarter of a century ago, he explained, people had to buy a newspaper to find out about practically anything. These days, entities such as social media platforms and Kijiji have captured audiences and advertisers, while saving consumers billions of dollars. As a result, however, about 473 newspapers have died. Up to 700 websites owned by commercial broadcasters, many of which look like an online newspaper, have launched. The CBC has launched what amounts to a national chain of online newspapers that competes for readers and advertisers while giving away for free that which others are trying to sell through subscription news.

Without subsidies, he continued, 216 web based news and online commentator websites have launched by innovators and entrepreneurs. Just last week, legacy news media, Black Press, announced a partnership with one of those innovators, Village Media, as they said, enhance the delivery of news in over 120 communities. Bill C-18 helps neither those struggling to survive, nor those looking to enter the market. According to estimates by Heritage Canada, and the Parliamentary Budget Officer. According to Heritage Ministry’s own, Owen Ripley last week, the bill will generate $215 million for government approved news producers. According to the Parliamentary Budget Officer, it will create $320 million. About $240 million would go towards broadcasters with CBC, Bell, and Rogers being the largest beneficiaries. Using Mr. Ripleys total and the Parliamentary Budget Officers breakdown, Bill C-18 will generate roughly $54 million per year, about what the Calgary Herald used to make in annual profit 20 years ago for the entire non-broadcaster industry (The estimate is a calculation I’ve personally made in the past and it always struck me as suspiciously low. Sounds like these suspicions were also picked up by Menzies as well. Happy I wasn’t the only one in this debate.)

If we were to use the Parliamentary Budget Officers total, about $80 million would be made available to the non-broadcast world. Both of those figures fall far far short of the $500 million the Post Media Chair indicated was needed to survive when he spoke to the Finance Committee last year. Meanwhile, both the Journalism Labour Tax Credit, worth up to $119 million, and is exclusively available to newspaper for 5 years, and the Local Journalism Initiative this year, worth $20 million, are scheduled to end. That means news companies that are losing money, legacy newspapers for the most part, will be worse off financially in 2025 after Bill C-18 is passed then they are now. (That is impressively dug up. I knew the situation post Bill C-18 for media companies was bad, but not quite that bad.)

Meanwhile, Menzies added, financially sound companies such as CBC and Bell, will have more resources which would mean they can improve their market share at the expense, for instance, the Toronto Star, likely killing it and others. The end result is that the most in need get the least, those least in need get the most, and those who on principle refuse to submit to government approval will be punished by having to compete against subsidized competitors willing to submit. So much for supporting a free press.

Then there is the likelihood that Bill C-18 will have global repercussions against Meta and, perhaps Google/Alphabet, to stop carrying news links. Non of these reflect well on good public policy. For these and other reasons such as impact in public trust in news, you must decline to pass Bill C-18 and he would advise the government to, instead, develop a coherent policy framework for the news industry that is based on rational economics, independence, innovation, and a level playing field.

But, Menzies continued, he also recognize that Senators probably won’t do that. So honourable Senators, he would at least ask that Senators amend Bill C-18 so it only applies to companies whose primary business is news. That Senators limit the role of the CRTC to ensuring that there is no abuse in market power in negotiations between tech companies and news providers, and that Senators further Bill C-18 in which, lets face it, is a subsidy hiding behind the beard of a commercial agreement to ensure that the CBC is ineligible.

Marla Boltman opened with her statement along with Sarah Andrews being tied into the same opening remarks. She said that we spend a lot of time revisiting what has been said in the Canadian news sector over the past several years. Not surprisingly, the same words have been used over and over. You’ve heard them before, but she’ll say it again: “extinction”, “bloodbath”, “hemorrhaging”, “critical condition”, “life support” (Hey! The perfect words to describe the arguments that supports Bill C-18! Nice!) The news sector has been given the gift of hope in the form of the Online News Act (if the hope was to murder the news sector, then yeah, Bill C-18 offers “hope”) crafted by the House of Commons. (I skipped a few moments of additional BS that didn’t add anything.)

The defining issue of our time, she continued, is trust. Specifically, the lack of it in news media (and news media only have themselves to blame for that after seeing their coverage of Bill C-11 and Bill C-18.) This mistrust is cultivated nearly every day, often for harmful reasons, through the deliberate spread of misinformation and disinformation. It is a diverse and destructive trend, one that corrodes our ability to embrace shared truth and agree on fundamental facts. One that undermines civil society and a fully functioning democracy. (Excellent! You are free to stop being part of the problem any time!)

An independent and authoritative news media, she said, will help offset this trend by serving as a check on those who traffic misinformation and by challenging those in positions of power (which is ironic when those same people are actively lobbying the government like no tomorrow to pass laws that they feel serves their best interest while offering little to no credible coverage of this very issue). To play this role, news media organizations must be strong and they must be sustainable and Bill C-18 can help with that (it currently doesn’t). They must also be transparent. Their three part proposal addresses a theme throughout the bill that seems to serve privacy over disclosure when it comes to deals between online platforms and news outlets (interesting because I also happen to have concerns over the issue of transparency in this bill too). They feel very strongly that it should be the other way around.

Public disclosure is the best safeguard to prevent undue influence over the journalistic and editorial independence of our news. Canadian’s have a right to know which online platforms compensate which news outlets, to what extent, and in what way. (This is the fun nature of really complex bills. I completely disagree with this witness simply on principle with respect to Bill C-18, but there is something we agree on.)

Andrews picked took over on the opening statement and said that because of the Heritage Committee, enhanced transparency is not required for the CBC/Radio Canada. It should be because Canadians have a right to know how their national broadcaster is funded and where that money is spent. Taxpayers have a legitimate interest in ensuring the value CBC/Radio Canada’s news content is recognized and compensated under the Act, so that revenues generated by the regulatory regime is invested in regional and local news content, something that the CBC is uniquely able to provide (This is some seriously fast talking, yeesh!)

While they are fully away of the arguments that CBC/Radio Canada should be excluded from this legislation (it should), time and again, the polls and ratings show that it remains to be the most relied upon and trusted source for news and information (that’s not a good barometer for how it should be funded). It is their sincere hope that the urgent need to resuscitate the Canadian news sector which undeniably includes CBC/Radio Canada (find another way of doing this. This method risks pushing many news outlets off of a cliff should Facebook and Google drop news links altogether – something that is seemingly the most likely outcome of this altogether.)

She then spoke about the diversity of news organizations. She says that the resilience against misinformation and disinformation can be bolstered, in part, to the passing of Bill C-18 (man are you in for quite a shock when the problems you reaped with this bill are sown.) With a few key amendments that favour transparency over privacy, the Online News Act that can bring new life into the news sector (well, breath death into the sector, but details, details, am I right?). After the bill is passed, when parliament reviews the bill in 5 years will be “reliable”, “resilient”, “credible”, “diverse”, and “healthy” (Eh, more like “dead”, “dying”, “confused as to what went wrong with their grand plan” and “who could’ve seen that coming apart from everyone?”)

They then ended their opening remarks. (Well, I for one, feel ripped off. They wanted to raise the issues of transparency, but then never bothered with raising the issues of transparency in the bill! That was a promise as empty as the promise of Bill C-18 itself!)

Micahel Geist then opened with his remarks. He said that he has been critical of Bill C-18, but that criticism does not stem from doubts about the importance of a robust, diverse news sector. However, he believes that the bill, as currently constructed, raises significant concerns about the free flow of information online, freedom of expression, Canada’s international Copyright and trade obligations. If left unchanged, he believes that it is likely to cause more harm than good including the possibility of blocked news sharing and indexing on platforms.

There is a lot to discuss, Geist explained, including the bills implications for an independent press, the distortion of competition, dependence on foreign internet companies, suitability of the CRTC administration, and how the emergence of generative AI renders the bill, which does not cover services like ChatGPT, already outdated. However, with limited time, he would like to focus on 5 issues and propose fixes.

First, Geist points out, the bill is fundamentally about mandated payments for links. Indeed, last week, Mr. Ripley acknowledged to this committee that without linking, platforms like Google are not digital News Intermediaries under the bill and, therefore, fall outside of it. The Supreme Court of Canada has warned that creating liability for links could impair the way the internet functions. Yet, payment for links are at the core of this bill and it doesn’t matter if it’s an aggregate charge for all links or a per link fee. The harmful impact is the same including the prospect that the same payments for links principle applied to other policy objectives and the foundation for sharing online be placed at risk. The solution, he believes, is that Section 2(2) should be removed and the definition of making available of news content, which is a requirement to be a DNI, limited to reproduction (wholeheartedly agree!) which he thinks that most Canadians would understand the notion of ‘use of news content’. If Google or Facebook published full text of articles and runs ads against them, let’s talk about ensuring fair compensation – but if it’s just links, often posted by the media companies themselves, it should fall outside of the framework.

Second, Geist explains, the definition of eligible news outlets in Section 27 should be revisited by limiting it to outlets that actually produce news. The government started by supporting the sector several years ago with tax measures based on the creation of qualified Canadian organizations, defined through CRA criteria. Bill C-18, as Senators know, expands on that approach to include broadcasters who the PBO (Parliamentary Budget Officer) estimates will receive 75% of revenues from the bill as Mr. Menzies mentioned – but the House Committee added another eligibility criteria based on solely holding a CRTC license. This expansion, he believes, raises trade concerns given that only Canadian’s can obtain those licenses and turns the bill into a subsidy program without regard for actual production of news (the license being only obtainable by Canadian’s is a very good point).

Third, Geist explains, this bill ignores Copyright norms by suspending limitations and exceptions from the bargaining process in Section 24. This runs counter to the foundation of Canadian copyright law and may violate Article 10(1) of the Berne Convention which has a mandatory right of quotation that expressly includes newspaper articles. The provision should be removed (another big concern I have with this bill, so I obviously completely agree).

Fourth, Geist adds, the inclusion of CBC within Bill C-18 framework is a mistake. In a world where often Canadian’s encounter paywalls, increase misinformation when seeking out reliable news, the CBC should be welcoming anyone that extends its reach and accessibility of its news content for which the public has already paid. Indeed, given concerns about public broadcasters competing with the private sector for ad dollars, to have it also compete for DNI money makes matters worse. Section 28 should be amended to make all federal broadcasters, provincial or federal, only eligible upon the enactment of relevant regulations. (There’s really nothing I can criticize here. It’s already a fantastic case.)

Finally, fifth, Geist explains, there are better ways to do this including a fund model that served as the basis for the Shattered Mirror report that launched much of this policy debate. A fund based on the Canada Media Fund model to support actual journalism with mandated contributions that are based on ad revenues from the large internet companies would address concerns about mandated payments for links, the independent press, and the myriad of eligibility concerns. Perhaps a way to do that would be in Section 11 exemption order provision of the bill which could be expanded to give the CRTC the power to exempt based on contributions to the fund. There is much more to discuss, but he looked forward to the Senators questions. (It’s probably a good thing he was last to give opening statements. That would be an insanely tough act to follow.)

Questioning the Witnesses

Senator Paula Simons opened up with questioning by turning to Geist. She noted his references to right of citation and the Berne Convention. She asked about how he thinks Bill C-18 may be in violation of the Berne Convention.

Geist responded by saying that at Section 24, there are copyright related provisions in the bill. He quoted the section. In other words, the ability for DNI’s in particular to cite the fact that whether they are making use of these materials because it really is just linking or indexing. All they are doing is exercising fair dealing. Arguably, you don’t even have to get to fair dealing. This is (deminimus?). The fact that they can’t even raise the right, which is a users right as defined by the Supreme Court of Canada, he thinks runs afoul of the basic principle that you’d find in the Berne Convention. You have a positive right of quotation. Just to quickly note, that under the Berne Convention, this is one of those rare instances where it is a positive right. So, this is an obligation to have the right of quotation, effectively to say that you can’t cite that right as part of this may infringe those rights.

Senator Simons noted that Geist thought that organizations like the CBC and provincial organizations like TVO should only be included if there was an enactment of relevant regulation. To Geist, what would those relevant regulations look like?

Geist responded by saying that, candidly, they should not be included at all, but if there is a way to formulate it, in a manner that doesn’t, one would think, harm the desire to create a robust private sector in the news sector, would be part of it. He’s spoken to a number of players who say that they have deep concern where CB is the primary competitor in their small local news market. The idea that they would have to compete not just with public tax dollars from the CBC, but also Google and Facebook money, has effectively forced many of those independents to participate in that system. They would have not choice but to be part of it. His broader view is that he just doesn’t think that it’s appropriate. If you are a supporter of the CBC, your goal is to make it relevant and different from what we get in the private sector – and the way we do that is to ensure that it is the home of access for all Canadians who don’t have to surmount a pay wall and don’t have to be concerned about misinformation. So the way you do that is to encourage access. Not say that, no, these are all the same and you have to pay to facilitate that kind of access. (So, basically, unless lawmakers can find some way of making it work, then regulation can allow for CBC to participate, otherwise, forget it. Interesting approach.)

Senator Simons said that, using Geist’s expertise on the international business side of things, what might the remedies the Canadian government have should Google and Facebook cease to display or index Canadian news sites? Are there any remedies in law that the government could take to counter that? (To my knowledge, and yes, I type this not knowing Geist’s response, is that the country doesn’t really have anything to counter this. As Owen Ripley already said, once the linking ceases, then the legislation ceases having any effect on things. The only thing would be the damage caused by news organizations suddenly being choked out of two of the largest websites on the internet.)

Geist responded by saying that he thinks that is an interesting question. Obviously, we are part of a trade agreement, and so, directly targeting companies from the United States. It may raise trade related implications. First of all, he has to say that Google and Facebook are slightly different in context. Facebook is about sharing of links posted by users, often by the media companies themselves. To require a company to continue that part of the service, if it’s uneconomical, he must submit, it’s unsurprising that they might react in this way, and he’s not sure there is some power to force someone to do that.

In the context of Google and indexing, he further explained, he’s also not convinced there is something in international law that can force someone to index, although, certainly, we would be looking at whether or not competition laws would apply and the way it gets implemented raise potential competition concerns. Part of it, he supposed, depends on the part of Google’s context, how they would stop indexing and linking to news, how they would go about doing that, what other content remains available and whether that raises anticompetitive type considerations.

(In terms of Canada having options, I personally think that these options would have to be created in the bill itself. So, an amendment that says that it is law that Google and Facebook must allow news organizations to link. The hugely problematic part of that, however, is that the bill would then become even more unconstitutional then it already is. This is because you are getting into the area of compelled speech, so you might be violating aspects of freedom of expression in the Charter. Admittedly, unlike in the US, the idea of compelled speech is a much more legally untested aspect of the law unlike the US where compelled speech is plainly unconstitutional. It may be possible to challenge the law in the US where the caselaw against this would be stronger, but at this point, we are really wading into the weeds at that point. Bottom line, though, it’s possible through an amendment to the bill, but it is basically lawsuit bait.)

Senator Julie Miville-Dechene turned to Boltman and said that Radio Canada has to correspond in three criteria in the Broadcasting Act which require ‘informs, enlightens, and entertains’. If there is a lack of funds for journalism, is it because we are spending too much on entertainment? How do we explain that no commission for public affairs have been created since 2005 while the volume of production of drama series is too large in Quebec – that many shows are unnoticed? So, is there a rebalance within the broadcaster rather than just counting on payments from Google and Facebook?

Boltman passed it to Andrews. Andres responded by saying that FRIENDS has been militant for a review for CBC/Radio Canada because there has been a commercialization so they are asking that the mandate be reviewed so CBC/Radio Canada can be recentered on its public mandate. She spoke about various interactions and processes that related to this answer.

Senator Miville-Dechene noted that Geist said that CBC/Radio Canada should not be included with arguments saying that why is it that public television can submit itself to Google and Facebook as financial sources, but should it not keep its independence and you don’t see a problem that CBC/Radio Canada are already subsidized?

Boltman responded that they understand this issue of public and private dollars. They understand why it’s been raised, but they don’t actually think it’s appropriate to link the Parliamentary appropriation and the public dollars to CBC’s participation in this framework (strange, because my understanding that they get over a billion dollars in public funding. It would be substantially easier to create a business with that kind of market advantage) because the bill really has nothing to do with public dollars. The purpose of the legislation, as we know, is to create a compensation framework where private online platforms are compensating news outlets for the benefits they are deriving from the news (I’m sorry, but that’s a crap excuse). Those benefits being private advertising dollars that helped pay for news (advertising, in this context, has nothing to do with this), but they are being gobbled up by the digital duopoly that is Google and Facebook (No, Google and Facebook aren’t buying these news organizations). So, when it comes to the CBC, yes, in a perfect world, we would have a national public broadcaster that is not reliant on advertising dollars, but our world is not perfect. While they continue to advocate for long term sustainable funding for the CBC, that funding has yet to materialize. So, until it does, having CBC compensated under the Act, would allow revenues generated from this regime to be reinvested in local content, something they continue to strongly advocate for.

(Ouch, that was quite the faceplant of an answer.)

Senator Rene Cormier said that he is very concerned about the issue of transparency. So, FRIENDS has proposed a modification of public disclosure, saying that the commission must make available to the committee, all information that’s transmitted by any groups, saying that this information is not available, saying that’s very limiting as a proposal. Have they thought about the idea of amending article 86 which talks about the creation of an independent auditor that could give transparency on the content of these agreements. Did FRIENDS look at the possibility given that its already in C-18, this idea of disclosure by a report by independent auditor governed by various criteria? (The translator mumbled a lot, so it was a bit hard to hear what was said.)

Boltman responded that they have thought about this. They feel that the auditors report is helpful, but relying on it alone has to main drawbacks. First, it’s only annual. Second, it takes its lead from the Act. So, if the rest of the Act has no bias in favour public disclosure, that will form the degree in the auditors reporter itself. For example, Section 29(1), if we were to continue to specify that an eligible news business only included on the public commissions list if the news outlet gives consent, it’s highly unlikely that the auditors report would provide the identities of the news businesses that have benefited from the Act other than those who have consented. If it did, that disclosure can come between a year to 18 months. (The idea of being able to hide your news organization from public disclosure always bugged me as well. What good is a disclosure report if the organization just opts to not be included?)

Boltman continued that between the House and the Senate, they brought those concerns, but those proposals were rejected out of concerns for privacy. She said that they get privacy concerns, but they are not talking about widgets here, we’re talking about commercial deals related to public news. News that has the power to influence the hearts and minds of Canadians. They do feel very strongly that, under these circumstances, we need to prioritize public trust and confidence in the news media and the best way to do that is with more transparency than what we are currently seeing.

Senator Cormier then commented that, like Boltman, he thinks that there is something that is missing. This states that a group of news businesses that are eligible that has an agreement with operators led to file a report with the commission. What happens with an agreement that’s between a media undertaking that’s alone, but not part of a group? How can we make sure that what happens with these organizations, sole media organizations that they don’t have to file such a report with the CRTC in the context of mediation? What would Boltman propose?

Boltman responded by saying that they should all be treated the same. The ones in collective bargaining that are already covered, but she would like to see individual parties also covered.

Senator Harder turned to Geist and noted that he suggested that there might be another policy direction available for funding. Is this simply a dispute with the federal policy approach? Australia has a model that is not unlike Canada’s proposal and it has not experienced the concerns that Geist has expressed with either treaties or competition law or the Berne Convention. Is he raising concerns, which are legitimate concerns, he’s not disputing that, to reinforce Geist’s policy preference? Also, how does Geist weight the right of Parliament to make a policy choice that Geist may not agree with, but nonetheless, move forward despite the concerns that Geist has expressed?

Geist responded by pointing out that, with respect to Australia, Senator Harder cited international conventions, Australia doesn’t reference limitations and exceptions. So, there’s a reason why copyright concerns are found in the Canadian bill that aren’t found in Australia. Australia does not include that kind of provision. Australia has also had the affect where the Code actually hasn’t taken effect as Senator Harder knows. There are differences of opinion of how effective it’s been. Certainly, he’s sure that when the Senator’s hear from Mr. Sims, he’ll tell you how great it is. There are others who have looked at it and have expressed some concerns. To FRIENDS’s point, the Australian model with regard to transparency has been even further lacking in transparency. It is just primarily speculation around this.

Geist added that, as for differences of opinions, in some instances, he has experienced first hand some of the concerns he has raised. For example, he has had op-eds that were critical around the Minister on this bill – approved internally and killed by one of the large papers because it wasn’t consistent with the kind of messaging they wanted to have. So when he says that there are concerns around press independence, he thinks that is very real. When he sees the government say that they are concerned about ensuring press independence and ensuring the CRTC isn’t overly involved in this, ensuring that there is a sustainable approach to this, but at the same time, doesn’t create some of these harms and create some of these linking issues he’s raised. He’s suggesting the fund because he thinks that that actually solves some of these questions.

Geist continued by saying that he thinks you can make the case that there are still other ways. If there is the view that we got to find a mechanism to get these large companies to contribute, a fund actually goes a long way to creating this a bit more arms length, it addresses the transparency related concerns because now we are not focused on these secret deals. We have upfront what is being contributed, and we have money going to actual journalism. Not to executives, not to hedge funds, (that’s a major concern I have with this bill as well) not to companies that may not even produce news, but rather those regardless of size or scope or where they are in Canada who are producing journalism.

Senator Harder said that he thinks we’ve all experienced what we thought were excellent articles that haven’t passed the screen despite the encouragement of others (that’s not what happened. The article was approved and then axed for political reasons). He then asked how Geist looks at what the UK is contemplating and how Europe has approached this, and indeed in the United States: the JCPA (the JCPA is a disaster in so many ways, it’s ridiculous.) is very much in this space as well. How does Geist judge their approaches?

Geist responded by explaining that the US approach has started to move in a certain direction and then, obviously, did not go forward (Briefly, Republican’s tried to turn it into an anti-moderation bill which, at one point, caused the bill to be effectively shelved). Perhaps they’ll revisit that and find a mechanism to move forward. He thinks that it’s clear that many countries are experiencing these same issues. We are obviously not alone. People are looking for solutions and Australia was a certain first mover and people are certainly looking for something, so we find ourselves following that Australian approach. Frankly, he feels that we have an opportunity to put forward something that is more effective that deals with some of the real negative implications of that Australian model or now, the Bill C-18 model that might well prove to be a more popular approach around the world. One in which the goal is to fund journalism. Lets find a way to fund journalism, but not have the intervention type issues that this creates.

Senator Harder said that the policy choices that the Parliament has agreed upon, would Geist not see Bill C-18 as an improvement on the Australian model, in part, for the reasons of transparency?

Geist responded that he thinks that there are some elements of transparency where we just heard witnesses talk specifically about all the problems of transparency. He’s not convinced that the government can claim that this is some victory for transparency when we just heard a very strong submission saying that transparency is still severely lacking in the bill. Fundamentally, he guesses that the bill’s negative implications are so significant, that it’s hard that this is an improvement on that bill.

Senator Pamela Wallin turned to Menzies and Geist, saying that her question is generally about the impact of government and control over access to information. She is a believer, given her past history, in free speech and free expression. However, that is a two way street. It’s not just about what we get to say, it’s about what we get to hear. This bill troubles her because she believes it has great potential to restrict access of citizens to information. If the streaming services stop carrying the news because of this link taxation system. Are the two witnesses concerned about the reduction or the constraint and restraint on ideas of information?

Geist responded that his concern is what is a fairly likely outcome of this bill which is that large platforms directly affected by this will stop or find ways to stop the news sharing so that they will extricate themselves as being defined as digital news intermediaries (DNI’s). He thinks that Facebook has been entirely consistent since this bill was introduced in saying that it’s just not a significant part of their platform. So they would stop doing that. He thinks that there are people who clearly use Facebook for news. He thinks that the concerns are even greater with respect to Google for them to move forward. Of course, people do rely on it.

Geist said that he also wants to point out that we are moving closer towards generative AI type systems. If you compare, for example, what you get with ChatGPT vs what you would get on the Bing where there is some citations and links back to some of the underlying sources (one of the senators was seen in the wide shot with arms crossed and turned away from Geist. How classy). The idea that we have a bill, one that doesn’t even include generative AI because it’s not indexing and it’s not linking. Even further, we would actually not encourage providing citations because once you start providing those citations in those links, you potentially wrap yourself in this bill if you were to be included as a DNI strikes him as so counterproductive. We want to ensure that people get both reliable information. There are ways to counter that misinformation and they can find those reliable sources. Once you start saying mandated payment for links, you are actually diving in precisely the other direction.

Menzies jumped in and said that it’s difficult to see how Meta would come to any other conclusion. The only rational thing for them to do is to exit. You don’t have to like that, but it’s just the sensible thing for them to do from a business perspective. It’s a small portion of their business. For Facebook, it’s not like Twitter where you go there to fight about politics with people, you go there to share pictures of your grand children and that sort of stuff.

Menzies continued by saying that the impact of that would most likely be on innovation and the start ups. He doesn’t think that it would be a huge impact on the existing products, but if you are a startup, Facebook was always free or very inexpensive way to introduce yourself to the local market through the targeted advertising. So, that would be too bad. In that sense, Bill C-18 would have a negative impact on that.

In terms of the longer term, Menzies added, he thinks Dr. Geist made the point earlier that in 5 years, there might not be any more links. We might have entirely different technology in search engines. So, Bill C-18 is largely redundant almost already if it’s purpose is to be based on links. There is an unfortunate consistency and he has sympathies for the people trying to build policies around it, but if you just kept it simple and looked for a different way of compensating things, you might, in the long term, get much better outcomes because, right now, people are going to go out of business because other people are getting subsidized, and that’s distorting the market. So, the government really needs to sit back and rethink this whole thing and have a proper national news industry policy.

Senator Wallin noted that we’ve heard from Senator Harder about this being about policy choices and the policy choice seems to be about subsidizing failing industry, not subsidize journalism – but it also puts every journalistic organization in this country in a conflict of interest because they’re dependent on this income to do the job. (Senator Wallin ran out of time.)

Senator Donna Dasko turned to Menzies and noted that he felt that, if this bill were to go ahead, that if this bill were to go ahead that only companies whose primary business is news should be included. What does that mean? Does that mean we are just down to news radio who this is supposed to be benefiting from this? She just would like clarity on that as it would exclude many many news organizations, so she wanted Menzies to elaborate on that.

Menzies responded by saying that the problem we are experiencing right now is that the technological shift revolution we are going through that undermines the platforms that are able to support journalism. Journalism never really supported itself. Journalism is always subsidized by classified advertising or some other form of advertising. Journalists hate to hear this, but there is no money in journalism (I would actually argue that there is almost never sufficient money in journalism. You can very easily make money doing journalism. The problem is that it’s not financially stable enough to support people most of the time.) It can play a very important part of the newspaper or any other certain platform, but it needs some sort of subsidy. So what you need to be working towards here is making sure you have platforms that are capable of supporting news as it is. He would suggest that platforms such as (TTV?) make lots of money in areas other than news. The CRTC has always expected them to use some of that profit to subsidize news. Same with Global. Same with others.

So, Menzies continued, this is the way you would go with it. If you are going to sustain a viable news industry, you have to have an incentive for people to get in to a primarily news business. You won’t do that by giving Bell Media more money or giving the CBC more money because the CBC is already the biggest competitor for digital advertising revenue out there. Got bless the CBC because he thinks that it has a vital role to play, but it’s not a public broadcaster right now, it is a publicly funded commercial broadcaster. That is distorting the marketplace.

Senator Dasko said that if you look at the data in terms of where Canadian’s get their news, and Reuters did a survey last year, they found that, for Canadian’s, the top sources for news for English Canadians, are CTV, CBC, and Global. Whether that be offline or online, it’s the same three top sources. For French Canadians, it’s Radio Canada and TVA. So, it says quite clearly that these are vital sources of news for Canadians. How can we remove CBC when we are looking at the most important sources of news for Canadians? Even though these broadcasters do other things, but news is one of the things that Canadians are using these networks for? Therefore, it would seem that a bill that’s supposed to be directed at news organizations, giving them compensation, would have to include these organizations under its reach.

(Personally, if you are capturing such a huge portion of the attention of the Canadian population and are still not financially viable, then there is something fundamentally wrong with the organizations business model. It’s that simple. It’s not like Bill C-18 is the only thing that could possibly fund these organizations.)

Geist responded by saying that he is reminded of the song “One of These Things is Not Like the Other”. One of these things doesn’t belong. That’s the public broadcaster. They are not the same. When he hears FRIENDS say, ‘well, in an ideal world, it would be fully public funded and you would never need these sources’, well, you never get there. If you don’t provide a rationale for the CBC to exist where it is different and you meet certain public interest rules. Senator Dasko’s data highlights it, that people rely on it. That’s a good thing. For news, that’s a very good thing, but he doesn’t think that means that it should be included here. It’s the opposite. It highlights that there is now a powerful rationale for why we should be funding a public broadcaster. That makes it different from those other private broadcasters and private sources. Then what is essential is to ensure that as many Canadians as possible have access and awareness to that information. So, we shouldn’t be throwing up barriers to access to that information that we both view as reliable, credible, and is publicly funded. We have already paid for it.

Menzies said that he would suggest that the way to go with the CBC, if you want a good public broadcaster, have a good public broadcaster. The problem is, right now, CBC is running newspapers out of business. Most of the newspaper industry appeared before the House of Commons Heritage Committee in 2016 to caution the government against giving the CBC because they were just going to- (time ran out).

Senator Andrew Cardozo turned to Boltman and asked her to carry on that discussion. Regarding the role of the public broadcaster, he wondered if she could drill down a bit deeper. What is the role of the public broadcaster in terms of news and why does it need this subsidy. Is there something about the current times where we have massive growth of misinformation and disinformation? Is there a possibility for the public broadcaster to be playing a more important role in that? He also asked Menzies about the fund model. He mentioned the idea of a national news policy and he’d like to get his view on that.

Boltman responded by saying that they believe that the best antidote to misinformation is editorial and rigorous journalism (that is the second time I actually agreed with her. Impressive. In fact, that’s how I’ve rolled for nearly two decades of work, now.) that is provided by both public and independent media news. That includes the CBC. They ask uncomfortable questions, they hold leaders to account, they provide a check on those who provide misinformation. So, if done correctly, Bill C-18 would go a long way to ensure that we have a healthy news ecosystem (No it won’t. It will murder the news ecosystem and create monopolies from a tiny number of news sources.) that exposes us to information from these diverse sources. So, again, that includes private and public sources including the CBC. All of which will help build trust in the news media and all of this will help battle misinformation. (This is a classic case of falsely attributing an otherwise good premise to something to something – in this case, Bill C-18 – that is barely even relevant to the premise.)

Andrews added that, as it was mentioned earlier, the CBC remains a vital source of information and one of the most consulted sources of news information online and on television. She thinks there is a conversation we are having about the CBC being included in the framework and, as it stands, the CBC is not 100% publicly funded (largely, though), it does use advertising dollars to top up it’s budget. In the current circumstances, it’s in techs best interests that CBC’s news content is valued and recognized within the framework of Bill C-18 (no, as Geist said, it’s simply a sign that it needs the public funding. Again, the lobbyists are making that logical leap and have yet to justify why Bill C-18 is the solution to anything including why the CBC needs to be in there, competing with these supposed dollars with privately funded media outlets.) She said that FRIENDS asked for an increase in Parliamentary appropriations that CBC gets so that it becomes less reliant on advertising dollars. It’s a government commitment. It’s in the Ministers mandate letter. That conversation has not yet happened. As it stand, the CBC should be part of the Bill C-18 framework (There has yet to be justification for this.)

Menzies commented that one of the problems you are dealing with here is the CBCs role in the marketplace. CBC should be a public broadcaster and it should not be competing for commercial revenue – with the rest of the industry. It is using their tax dollars and their revenue that is more helpful for all to go to the private sector and, add funding to the CBC if you want to do that, that’s probably the easiest way to solve that problem. In terms of a fund model and a national news policy, it has to be multi-faceted. Right now, we actually have a system where we are actually creating a long term dependency for the news industry which will only be trusted by the public, and therefore useful, if it is viewed as independent. Right now, we are creating a long term dependency on the good graces of government and the outrageous profits of big tech. He doesn’t think that the average person on the street trusts either of those, and associating strongly with both of those is not going to build trust in the news industry which is not helpful.

So, Menzies explained, what you need to do is build a national news policy that values independence, that values innovation that’s going to be needed to get us through this difficult time and trust.

Senator Fabian Manning turned to Geist and said that we’ve been hearing about the demise of local news for years and hearing it again this morning. Indeed, even larger news organizations have been closing. We’ve seen that a lot with Bell Media and Rogers buying up all the outlets. In many markets, they own all of the radio outlets between the two of them. So, how much is the responsibility of local news is because of Facebook and Google and how much is the doing of corporations who will now receive more money who will provide less? Also, is there any guarantee that the money they receive will be invested back into news? (for me, this is one of the million dollar questions because, at the moment, the way I interpret the legislation, is that the government is effectively handing a blank check to the large media corporations with zero strings attached. For all we know, the money will just wind up paying for some multi-millionaire’s next private island.)

Geist noted that Senator Manning raised several issues. First, even Ripley acknowledged it during his appearance. The challenges this sector has faced is multi-faceted. It’s not just about platforms. We could go back to Craig’s List. We could go to a range of impacted revenues. He also thinks that the notion that somehow the success of those companies is built on the success of news is just an obvious fallacy (totally agree). News is just not that important to these services and while they have captured ad revenues to be sure, it’s because they offered a better ad model, not because they are offering news on those platforms (bingo!). That’s the reality of the economics behind this. We have seen these closures. We have also seen the same studies that point to 400 odd closures to the last decade or so have highlighted at least a couple of hundred news startups that have entered into this space.

So, Geist explained, we have to recognize that there is innovation taking place. That doesn’t mean that the government can’t act, but we are seeing these newer players come into the marketplace and, quite frankly, he thinks that this legislation harms their ability to be competitive (it totally does). Many of them didn’t want this (I most certainly didn’t want Bill C-18). They’ve had little choice but to participate in it because they say, ‘how else are we going to compete if our main competitor is, say, the CBC in a local market and, suddenly, we are now in a market where the CBC is not just publicly funded, but also Google and Facebook funded?’ So, they’re participating in this.

Frankly, Geist continued, he thinks that the government has taken some innovative approaches such as local journalism finding with the tax credits systems. We didn’t really allow them to play out in the way that it might have and he does worry that by trying to steer the majority of this money to large legacy players, notably, to large companies like Bell and Rogers, we end up in an environment where some of those innovative players are not going to survive just because the deck is even further stacked against them.

Senator Manning noted that a lot of the discussion in today’s world is about trust in the media. We hear comments about fake news and it’s constant. Senator Manning talked to ordinary people who say that they don’t believe a thing they hear on the news anymore. He’s just wondering about Bill C-18 and governments trying to restore that trust or, at least, that they’re cemented. He’s just wondering how Geist sees Bill C-18 – and any other witness who wants to answer, how will Bill C-18 restore and strengthen the trust in news? Do you see Bill C-18 doing any of that?

Geist responded by saying that he thinks it does the opposite. He thinks that it undermines trust in a couple of important ways. One, he thinks it undermines trust because it does skew coverage. It may be the case where a couple of people have had op-eds cancelled. He thinks anyone who fairly looks at the coverage of this bill within mainstream media will acknowledge the blurring of editorial and the business interests of many of these entities which ultimately undermines trust in these entities because they put their business interests on the front page as editorial.

Further, Geist added, by invoking Google and Facebook as essentially saying that they want as much as 35% of our news outlets costs funded by these two companies – how can we trust the coverage of those companies when they are so dependent on them? It’s why he put forward the fund model where we create a system that is arms length between where the funding is coming from and who directly benefits. The way we’ve established this now, you could have companies that can survive, but he’s not sure that they are going to be trusted when people know that two thirds of their funding come either from Silicon Valley or the federal government.

Menzies chimed in and said that he might add that the entire news industry depends on trust. It’s a primary commodity. Without trust, it has no hope. It’s always advertised itself- so, you know, ‘this evening, watch Senator Manning’s most trusted news’. That’s always been the platform behind it. Anything that undermines trust, even if it’s 10% or 20% of the population and even if you don’t agree with it, it’s going to kill the business. That undermines trust.

Boltman said that, if she may add, that’s why FRIENDS is calling for more transparency in this bill because lack of funding transparency would only feed this distrust. Canadian’s should have a right to measure the levels of trust in their news ecosystem. If it is 30% or 35%, Canadians need to know about that and we need to look no further than the recent public outcry of Twitter mislabelling English CBC News to show us that Canadian’s value the independence of their news media and a little more transparency in this bill will help accomplish that and will help accomplish trust.

(If we ended up with something like that, then I would be tempted to post screenshots of the transparency reports proudly showing zero search results for Freezenet via CTRL+F, honestly. I don’t think we’ll get that far, but it’s still a tempting thought.)

Senator Leo Housakos thanked the witnesses for the compelling testimony. The message is crystal clear of all three of the witnesses that we have a government that’s pumping more than $1.2 billion into a broadcaster to allow them to compete in the marketplace that soaks up a lot of revenue at the expense of independent news media outlets. His concern is that we have been allowing this to perpetuate for a number of years with this government, supported by parliament. We’re doing it without any sort of hesitation. We;re encouraging them to compete and we are consumed by it, but when we look at the ratings, and no one has touched upon that, can someone explain to him how a government can give so much to a news outlet that has so little in terms of ratings compared to independent news outlets across the country?

Andrews responded by saying that there is multiple polls out there that show that CB remains one of the top most consulted platforms on television. Internal polls, she said, showed that and they offered to give those polling numbers.

Menzies said that where CBC is at, if it were purely public, experiences some success. He’d say that the English and French radio services which are not commercial tend to do every well in their markets. Where they are failing is where they are commercial. The commercial view distorts your view.

Geist commented that we’ve put a lot of money into this, there has been promises for more, but he thinks the mistake is that, well, rather than put public dollars in them, let’s get Google and Facebook to fund it. At the end of the day, it undermines the whole rationale for a public broadcaster. People do value it, he listens to it, and others do and value it for reliable credible information, but it’s hard to be that when you are turning over a bunch of your funding to US based tech giants – and it’s hard to do that when its indistinguishable from other sources. Instead, we ought to ask how do we leverage that $1.2 billion and one of the ways we do that is to ensure that it is as broadly and readily accessible as possible and that it is not the same as you would find on a Global or CTV in some of the media markets and what this bill does is say that there is no difference, we just want to see these guys pay up.

Senator Housakos said that, for clarity, his question wasn’t about polling or surveys, it was about ratings of the CBC and people’s trust in the CBC. No one is questioning the $1.2 billion funding they get. No one can question the quarterly ratings and he wanted to make the distinction that they are significantly different between CBC Radio French and CBC English.

Senator Miville-Dechene commented that Radio Canada has high ratings in certain fields, so we have to make distinctions and, also, she doesn’t think there is a consensus at this table about Radio Canada.

Senator Housakos thanks the witnesses and adjourned that part of the hearing.

Concluding Thoughts

One thing I did find interesting is just the fact that I agreed with anything at all with FRIENDS on this given that we are pretty much on opposite ends of the spectrum on this debate. I agreed that the antidote to misinformation is journalism and I agreed that the legislation’s transparency is lacking. I don’t think FRIENDS really went down a path that really went far enough. I’d say that there needs to be a mechanism in place to ensure that the funding that would theoretically come out of this should actually go to journalism instead of padding executive bonuses.

There needs to be a way to ensure that the organizations don’t just find a way to shuffle the money around so that the funding indirectly just goes to executive bonuses and hedge funds. I’ve personally already suggested ways such as tying money received to actual new expenses in furthering journalism. I think anyone working in any of these news operations would either cynically sigh or find the concept infuriating that after their organization receives a stack of cash that nothing internally changes, yet a few weeks later, the boss is showing off his new Rolex watch or sports car afterwards. This is the sort of thing I really really don’t want to see happen in as a result of this bill. Some might think that adding all these requirements is excessive and that media organizations can be trusted. The thing with that is that you are basically trusting an entire sector. Sooner or later, you are going to encounter a less than trustworthy executive team somewhere along the line. It’s practically math that sees this crop up sooner or later.

Another takeaway is that there seems to be this persistent logical gap of identifying a problem of funding and just jumping to the conclusion that Bill C-18 is the solution. The justifications used are always building trust in the media or media is worthy of receiving such funding. Yet, as Geist highlighted towards the end, Bill C-18 does the exact opposite of building trust in the news sector. If someone like myself sees this positive story about Facebook, is it because there is an objectively positive thing happening within Facebook or is it because Facebook is paying a huge portion of the news organizations expenses? This easily challenges that trust in the sector.

Of course, the overarching problem, and Geist and Menzies touched on it, is that there is that massive threat that Facebook and Google are just going to drop news links altogether. If the platforms go that rout, and the odds are that they will, then everything about funding and transparency reports and restoring trust in the news sector and more becomes a moot point. Filling the void of ‘what on earth did we do this for?’ would be regret and numerous media outlets being significantly hurt by all of this. You don’t suddenly choke off a large percentage of your overall traffic without there being consequences. The worst thing about it is that everyone in the sector suffers because of it, not just he big players.

Overall, it was a fascinating hearing, though a bit too heavily focused on the CBC in my view. Still, it was a great hearing with a lot to talk about – as is clearly shown by the nearly 10,000 words for this analysis.

Drew Wilson on Twitter: @icecube85 and Facebook.

6 thoughts on “Senate Hearings on Bill C-18 – A Look At Hearing 3 (Segment 1)”

  1. Here is a good source for financial information about broadcasters:

    To see results for individual services select download for Individual Discretionary and on-demand. For conventional TV download the first item. For reports on Bell, Corus and other broadcasters go here:

    The page for CP 24 is interesting it shows pre-tax profit has increased from $15.5 M in 2017 to $27 M in 2021, so not all news organizations are hurting.

    The conventional report shows TV stations spent $388 M on news in 2021.

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