Senate Hearings on Bill C-18 – A Look At Hearing 5 (Segment 2)

We are continuing our special coverage of the Senate TRCM Bill C-18 hearings. This hearing covers the second segment of hearing 5.

The TRCM (Transport and Communications) committee hearing on Bill C-18 is continuing. The hearings have already begun drifting to smaller stakeholders who are hoping to have their voices heard on this – many of whom are basically lobbyists. Not a surprise since the Bill C-11 was also similarly dominated by lobbyists as the government pushes to ensure that anyone who has a heartbeat that agrees with their agenda gets heard. This much more than anyone who would have the audacity to question the legislation.

Before we get into this hearing, we wanted to showcase the previous hearings we covered to date.

Past Hearings Covered

Hearing 1 – Heritage Ministry officials / Lobbyists (1) / Konrad von Finckenstein
Hearing 2 – Missing/Not Available
Hearing 3 – Michael Geist / Peter Menzies / Lobbyists (2) / The CRTC
Hearing 4 – Alphabet / Google / Meta / Facebook

In the first segment of this hearing, we heard from lobbyists. Indeed, it probably should have been a slam dunk hearing for Bill C-18 supporters who were hoping for some kind of credibility win to start building momentum for this bill. For those supporters, though, that hearing wound up being a giant faceplant with supporters contradicting themselves, giving conflicting thoughts about the bill, and just not even having a firm grasp of what the bill even is about. So, it’s probably not a surprise that this got so little mainstream media attention as that was probably a hearing that they all hope goes unnoticed. So, we now move to the second segment to see what all was said in that hearing.

As usual, if you want to just follow this hearing through the video we are watching as well, that video can be found here. This coverage goes through the second half of that video. So, with that, let’s take you inside this hearing.

Opening Remarks

Derek Fildebrandt of the Western Standard opened with his remarks. He said that his organization is highly unlike the large corporate media that has lobbied for this bill. As a so-called qualified Canadian journalism organization, they are eligible to receive the full suite of taxpayer subsidies that media are entitled to in Canada, but they refuse to accept them. They believe that for media to be independent, they must be independent of the state. While the legacy media cry poor and claim that they are unable to make ends meet in the challenging environment in their industry, they have thrived. They have gone from a small group around his dining room table in 2019 to the most read publication in Alberta. They have a large news room in their Calgary headquarters bustling with activity and breaking original stories every day. They have bureaus in Vancouver, Edmonton, Regina, and Ottawa and they did it all without the help of the government.

He continued by saying that he is there today to plead the government to stop forcing their help on them through Bill C-18. One of the most critical ways that they were able to grow so quickly is the availability of platforms like Facebook to deliver their content to potential readers at no cost. Facebook made it possible for startups like theirs to get their products in front of potential customers without the need for large costly delivery operations.

Fildebrandt continued by saying that his first job was as a small town paperboy. In the winter, he would even deliver newspapers with a makeshift dogsled with his husky. The local paper paid him to deliver their product to their customers. In 2023, Facebook is the new paperboy, albeit a very rich one. They deliver their product to their customers, but they do it for free, but greedy newspaper executives not content with the existing massive bailouts to their failing business models have come cap in hand to the government for even more.

What they got, Fildebrandt said, was Bill C-18 which would fore Facebook and Google to pay them for delivering their content to their customers. If the government had passed a law in 1995 requiring paperboys to pay the local newspaper for the privilege of delivering their products, he obviously would’ve quit. It should come as no surprise that this is what today’s paperboys, Facebook and Google, have promised to do. Of course they will not pay the legacy media for helping the legacy media. It’s asinine.

There will be no free money, Fildebrandt added, from these tech giants. They’ll simply turn off the news in Canada and independent media will become collateral damage for their greed. They never asked for this bill and they were never consulted in it, but they will have a massive source of their traffic turned off as Facebook and Google retaliate for this naked rent seeking operation. Bill C-18 should be killed, but he understands that the senate would rather amend legislation rather than defeat it.

Fildebrandt said that here’s his ask. Please amend the bill to ensure that those of us who are not trying to grift their way to profitability are not collateral damage. Please amend the bill to make it explicitly opt in so that only media that want to partake in this shakedown are included. Importantly, this includes removing or amending Section 51 which prohibits Facebook or Google from treating news outlets differently. This is important because platforms should not be required to shut down content from media outlets like the Western Standard that are not trying to fleece them. Let Goliath fight with Goliath, but do not require that the Davids here get caught in the crossfire of their squabble. One of the most important principles of their common law is that the government can’t force two unwilling parties to enter into contracts with one another against their will, but that is precisely what Bill C-18 attempts to do.

A free press, Fildebrandt continued, must be free to enter into its own contracts of its own free will and governments only role whatsoever must be in upholding those contracts in court. More subsidies direct and indirect from taxpayers or other industries will not save the legacy media. Competition, adaptability, and innovation will, if anything, can. All these lifelines thrown to big media do is stifle startup new media to compete. Parliament has no place in regulating the media. The state has no place in the news rooms of the nation.

Fildebrandt thanked senators for hearing him out and said that he begs of them to let the remaining free press be free and please, for the love of God, stop trying to help us.

Evan Jamison of the Alberta Weekly Newspapers Association then opened with his remarks. He said that the passage of Bill C-18 is important to the media landscape in Canada and can help shore up sharp declining revenues at many newspapers, especially the larger ones. There is, however, significant concern among their membership regarding the level of support it will deliver to smaller publishers. They’ve heard encouraging reports out of Australia regarding deals signed by publishers of all shapes and sizes, however, there’s a lot of secrecy around those deals and the level of support given to any given news outlet.

Jamison continued by saying that they have seen various levels of support that could come from Bill C-18 and where most of those funds will end up. Considering the estimates and the nature of the value exchange calculation between publishers and platforms, it appears that revenues for small and medium sized outlets could be very low. They are also concerned that the major platforms will try to reduce the value of these deals as similar legislation is considered in different jurisdictions as many different countries are looking at this and the costs will accumulate among the platforms. (Don’t worry, the platforms won’t accumulate costs when they pull their support from news links from Canada and other countries. That’s when you get all the nothing you deserve out of this.)

It appears, Jamison said, that Meta has avoided new deals with news outlets. They have also stated that they will stop hosting news content if Bill C-18 is passed in its current form. The move would significantly reduce the level of funding flowing through Bill C-18 and impact traffic to many news sites (and the fault for that would rest on the supporters of Bill C-18). Google has stated that their news showcase is not a fit for small and medium sized publishers. google and Meta has stated that the gain little revenue directly from news. However, there is a strong argument that news adds value to their platforms even if its not direct. More time on site, more data from users, etc. (Keep dreaming, dude. You’re still living in fantasy land.)

We must all keep in mind, Jamison said, that digital worlds and platforms are constantly evolving. It is difficult to say what platforms and technology will be dominate into the future. Governments in private lawsuits around the world are challenging the platforms out of concern for anti-competitive practices and privacy and misinformation (and Bill C-18 does nothing to address this). How will recent ongoing developments in generative artificial intelligence impact this bill and the news operations it supports. It’s a very quickly moving field.

Jamison said that he is very encouraged to see amendments to the bill allowing non arms length owners to qualify. there are many of these small operations across Canada and they are often the only source of news in the communities they serve. They are also concerned by the timelines projected by the CRTC – upwards of two years to facilitate arbitration. This is far too long given the precarious state of their industry (you’re SOL on that one.) As it has been pointed out in previous hearings, there are no single solution to support all news outlets. The business model and the scale in which they operate vary greatly. It is a very diverse industry serving many diverse communities. What may work on a national scale with a broad audience may not fairly work in a small town with a limited pool of interested readers.

Jamison continued by saying that the situation is dire for many news outlets. Some may blame this on the newspapers inability to adapt when they get described as legacy or dinosaurs married to the old way of doing things (thus far, that is an accurate description.) This isn’t the case. Many operators are experimenting with business and distribution models. Newspapers are often early adopters of new technology (I guess that explains the attitude that the internet will just go away on its own, then). The problem is that there isn’t a clear path to success especially for smaller local publishers. Good journalism takes time, is expensive to produce, and ephemeral in nature. While there are some encouraging signs that new models are evolving, it is too early to know their longevity and what types of communities will be able to support them. They often hear about the latest and greatest model only to have them fail after a period of time (so the media is just sitting this one out, so much for experimenting with models.) They can also vary greatly in the quality of news they produce. Simply regurgitating news releases isn’t enough (yeah, the legacy newspapers really need to stop doing that along with reprinting wire services reports, but that’s not likely to happen because they are all about doing things as cheaply as possible.)

We must, Jamison said, rebuild and strengthen news outlets that have been decimated by revenue decline (Good idea, we’ve been waiting decades for the newspapers to do that. They are free to start any time.) We need not only to preserve what exists, but also fund adequate resources for quality news and information to local communities. Not just for existing players, but new ones as well – in digital or printed form.

Jamison said that they support Bill C-18 (and shooting themselves in the foot), but think more is needed. Through the expansion of proven existing programs in addition to others, the government has long supported local media publishers and recently through special measures for journalism. The Local Journalism initiative has been very important for many of their members serving rural and underserved communities in general, but that program is not necessarily set to go on permanently.

Perhaps other funding programs, Jamison said, such as the subscription refundable tax credit could be a real benefit for small weekly newspapers, helping to restore subscription revenues that have steadily drained away over the past 10 to 15 years. Today’s non-refundable digital news subscription tax credit largely benefits large metropolitan daily newspapers. Other things that have been brought up would be perhaps a tax on digital advertising sold in the Canadian market could be redistributed through a fund to Canadian news outlets. Advertising has long supported journalism. Working with Canada Post to improve delivery times and reduce costs, especially for rural areas.

Jamison further said, Canada Post has become a significant competitor for flyer distribution. Perhaps they should be required to support local journalism so they are part of the solution, rather than the problem.

As has been echoed by many other witnesses in this committee, Jamison continued, they fundamentally believe that quality news coverage, however it is served, is vitally important to communities and they are encouraged by government efforts to support their industry in their great time of need.

(Some of the suggestions started off pretty reasonable. Tax credit and funding programs aren’t a terrible idea. The problem is that his ideas got progressively worse and, ironically, undermined the need to Bill C-18. A tax on digital advertising for journalism is a bad idea because advertising is used to serve more than just news organizations. It isn’t fair for non-news organizations to be forced to subsidize one particular operation and would very likely pull revenue from smaller organizations within the sector and hand it to the larger players. So, it’s an unworkable idea.)

(When he talked about demanding that Canada Post subsidize the news industry, it really shows the true colours of what is being demanded. They want Canada to go back to the bad old days where we didn’t have the luxuries afforded by modern technology. They feel that the whole world is beholden to their interests and that everything that can generate revenue should be stolen and siphoned off to their operations because they feel entitled. They are clearly pushing for naked corruption of the system and that suggestion alone pretty much blew any and all credibility that the guy had.)

Nicole Doucet of the Coalition of Canadian Magazines opened with her remarks. She said that they have to conserve the wealth of our uniqueness and our identities. She then spoke about eligibility. She said that what they are suggesting is that there should be an “or” instead of an “and” in meeting the eligibility requirements. She suggested withdrawing 27(1)(b)(iii). That would allow them to participate in the legislation itself.

(The section itself reads as “produces news content that is not primarily focused on a particular topic such as industry-specific news, sports, recreation, arts, lifestyle or entertainment, and”. Probably little wonder why the magazines themselves want this removed. Weirdly, for different reasons, it’s a section that I am concerned with in regards to websites as websites are also focused on specific topics of interest thanks largely to how the internet works. Magazines have similar situations. So, for vastly different reasons, I’m on board with removing that as a requirement – not that we’ll get that of course.)

Nicolas Lapierre continued on with the statement. He said that magazines are a source of high quality journalism (uh huh, sure, that’s totally believable) and they often provide a unique take on important events, yet they don’t get the funding. He said that magazines reflect our culture and society and is a very important source of education for Canadian’s.

Doucet continued the opening statement by saying that they have listened to the other witnesses and note some concerns about the elephant in the room that is AI. There can be twists in the same way that would affect their identity.

Lapierre said that on that note, two editors they know have used AI to produce a magazine of a 136 pages in 2 days. So, technology is really out of control.

(I would disagree that this is the elephant in the room. the elephant in the room is the prospect of Google and Facebook dropping news links altogether, thus blowing up the entire sector.)

Questioning the Witnesses

Senator Julie Miville-Dechene turned to Fildebrandt and noted that he said that he wanted an opt-in clause. Other media has talked to her about this. How about an opt-out clause in Section 27? Because she understands that the CRTC can decide at any point who’s in. So, would he be satisfied with an opt-out clause for media like themselves?

Fildebrandt responded by saying that it would be an improvement over the current bill, but his concern is in his discussions with Meta and Google that their retaliation- he really hates having to sit there and defend two companies that he really doesn’t like, but he’s not here to defend them, they are just the least bad guy in this (I know the feeling all too well) – but they are going to retaliate for this as they have the right to do and as he would expect them to do. They’re probably not going to go through a list of thousands of Alberta publications. He knows some of the senators there have Substack pages. Those could very plausibly be considered news to some extent – or at least opinion on news, caught within media, then blocked on those platforms.

In his discussions with Meta and Google, Fildebrandt explained, they’re not going to hire a whole team of people to crawl through every page and say ‘well, these guys have opted out, these guys have opted in’. They’re just going to blanket ban it. It’s why if they make the bill opt-in, it makes it possible for us to contain this fight between the Goliaths – to those who want to have the fight. He doesn’t want to have to fight and he shouldn’t have to enter into the ring and say that by default, he shouldn’t have to be in the ring. He shouldn’t have to walk into it if he doesn’t want to walk into it.

He supposes, Fildebrandt added, an interesting alternative, to take the advice of one of the previous witnesses, and he will voluntarily be labelled as a “hate group” if that will get them opted out of this bill. (I honestly don’t blame him for making that comment. I mean, if I had a choice between being labelled as a hate group and being completely scrubbed off of search results and banned from social media completely, heck, even I would take the label.)

Senator Miville-Dechene thanked him for that short answer. She then turned to the magazine representatives with a few maybe difficult questions. When you look at the definition of what constitute news, and she knows that it depends, to an extent, on interpretation, but to include magazines, what does that mean? Does that mean Macleans, which is an information based magazine? She doesn’t know about what type of research they have done about that. How can they think that a magazine like (French title that I’ll probably never spell correctly) which is just a set of pictures of the stars in Quebec. It’s very popular, it’s very much read, but does it contain news? Perhaps, but maybe not. How can you bring those two together? When you speak to magazines in quotations marks because that can include a magazine that includes gossip (same thought I had, actually), about stars, plus hard news. How can that be included?

Lapierre responded that he could, perhaps answer the question partially. If you look at other magazines that do journalism and do news as well, you always have to confront this type of bias about gossip magazines-

Senator Miville-Dechene pointed out, but they exist.

Lapierre responded by saying that, yes, they do, but you can’t neglect the others because of that particular kind of content.

Senator Miville-Dechene asked if it should be a case-by-case basis.

Lapierre responded by saying that, well, case-by-case, maybe so. Yes, to his mind, but (French magazine example), you could go to their editorial room to see who’s reading the text. Who is going over it. Does it meet journalistic standards? He thinks that there are other people that write those texts. They’re general interest texts.

Senator Miville-Dechene said that those people who are writing it do fall under the description. The second part of her question deals with news. Are they magazines?

Lapierre responded that, yes, there are news magazines, definitely.

Senator Miville-Dechene responded by saying that, so it’s not all magazines that would be excluded of the various types. Would some be covered?

Doucet responded by saying that it would be fewer than 10. (time expired)

Senator Paula Simons commented that there is such nice Alberta representation today. She wanted to start with Jamison and Albert. They have expressed support for Bill C-18, but also pointed out that smaller newspapers like theirs and like the ethnic media groups they’ve heard from earlier this morning, may be disadvantaged in comparison to the Goliaths, to use Fildebrandt’s term. They also offered other things that they thought would be more targeted and useful to small publications like theirs. Bill C-18 obviously doesn’t include a fund model, but she can’t help but think about, when she listens to them and previous witnesses from the minority language and ethnic press, that there surely must be a more tactical surgical way to support smaller publications rather than forcing them to bargain with Meta and Google.

Jamison responded by saying that, yeah, there is a lot of debate amongst the industry with different players because, like they said, it’s very diverse. He spoke at length about diversity and the uncertainties of Bill C-18. When you look at smaller publications, what does that value exchange look like? What support is actually going to come from that? On the other side, they have members that have existing deals with platforms. There’s a lot of unknowns with Bill C-18 for smaller, low traffic publications in small communities.

Senator Simons turned to Lapierre and said that there are a lot of magazines in this country that combine news and lifestyle. She’s thinking about Toronto Life, (another French example that I probably won’t spell correctly) in Montreal, Edify in Edmonton. Has the government provided any information on how might be classified?

Doucet responded by saying that they don’t have any specific information about this. They have asked Heritage to see who they see as eligible, but they are saying that it’s going to be the CRTC that decides and they should be speaking to them (heh, good luck with that). It is going to be at another step. They want to talk about it now because if they take out the article on Section 27, article iii, that is going to help them to bring in more magazines, as Senator Simons said – Mainly Toronto Life and others that also do current affairs – also popular culture, but also serious subjects.

Senator Simons said that Fildebrandt was in the room when the last witnesses talked about the need for a code of ethics. As he knows, back when she was a journalist and he was a politician (she laughed) we’ve changed roles here. It’s really important that the press be free to report without fear or favour. She realizes that she is putting him in an awkward position since he has stated very plainly that he does not wish for the help of Bill C-18. What challenges does he perceive in his new role as journalist with the idea of the CRTC deciding who is legitimate and who is not?

Fildebrandt responded by saying that we already have so-called Canadian qualified journalism organization status that they applied for as a joke just to see what would happen. He had no intention of accepting the subsidies, but they did get it and the kind lady at the CRTC asked if they would like help filling out the forms for the different subsidies and he said, ‘no, it was all a gag.’ He thanked the CRTC for it. There are challenges-

Senator Simons asked if he meant the CRA.

Fildebrandt apologizes and said that he meant the CRA. There are challenges- (time ran out)

Fildebrandt joked that the chair was cutting off a journalist and former politician.

Senator Rene Cormier turned to Doucet and Lapierre. Clearly, according to the current bill, how many magazine members would be eligible and if changes to Bill C-18 would be accepted, how many would be eligible? Figured please.

Lapierre responded by saying that they could come back to Senator Cormier with the figures, but presently, he would say that it would be the majority with the changes they are proposing would be eligible.

Senator Cormier said that on the question of exclusion, for specific types of magazines, they want to see that removed from the bill? Can Lapierre explain why?

Douce responded by saying that she thinks that the press in general that covers these subjects than what magazines do is target certain subjects. They are working towards the same end. When you look at a newspaper, or when you look at a magazine, it may reference lifestyles as well as news. So, it’s difficult to see the place that the magazines would hold within this type of legislation. It would have to be more specific.

Senator Cormier then turned to Fildebrandt. He explained that their funding model (interpreter stammered possibly because the Senator may have been speaking too fast?) How does Fildebrandt assess the revenues that they get in terms of advertisements and how much does he get from subscriptions?

(Sounds like Cormier was asked to repeat the question.)

Senator Cormier said that he wanted to know how to evaluate the amount of money they get from publicities and from subscriptions.

Fildebrandt responded by saying that revenues are split. It varies from month to month, but on average, they are roughly 50% subscriptions, 50% advertising. It’s fluctuated over time. It’s taken them a long time to build up their capacity to sell their advertising. He’s not entirely without sympathy for media that have talked about the collapse of advertising model. Google has come in- when they first starting building the Western Standard, they tried building the Google Ads that auto-populate from Google. They just paid pennies on the dollar. It wasn’t worth it. It just made the website look ugly, they gave virtually no money, so they took them out. They had to painstakingly, over the years, build their ability to directly sell ads to customers. That is very difficult work. He hates it. It’s very difficult to find people that are good at that, but it is necessary to do for the media if they want to have any form of advertising side of it. Conversely, they absolutely need subscriptions. It’s roughly 50% of their revenue. They refer to it as memberships, but subscriptions, same thing, and, not to make this a commercial, but it’s $10 per month, they have a limited paywall mechanism in place so that, between those two horses, fund their operations.

Senator Cormier said that, from what he sees from the advertising income Fildebrandt gets, he has reached independence even if United Conservatives take out ads, he is, journalistically, independent. He is not affected by those ads that are on his site.

Fildebrandt responded by saying that if they are willing to pay ads at their posted rate, they have offered to sell ads to the Alberta New Democrat Party, other smaller political parties. They have private businesses that advertise, not for profit organizations. Now, the independents, Senator Simons and others who have been around the business know that you have to do your very best to have a firewall in place between your advertisers and your news rooms and, most journalists know, particularly in smaller publications where it’s not hundreds of people in a building where you can psychically separate each other. Back in the 90s, the advertising department would never meet the news department. You have to try your very best to have a firewall in place, but it is impossible to 100% separate it and any publisher who tells you otherwise is probably lying. It’s one reason why direct government funding of the media is so dangerous and now the proposal in Bill C-18 to bring in the tech giants to fund the media is dangerous.

No one advertiser, Fildebrandt adds, makes a critical portion of their revenue. The government is making them pay 33% now.

Senator Cormier said that his time is running out and he didn’t want the chair to cut him off.

Senator Andrew Cardozo said that he wanted to take a step back and ask a general question. Certainly, Fildebrandt has made the case for the bill not going into effect and and he would like to get Jamison’s thoughts about what the future of their media is in online media and artificial intelligence. Doucet, how does she see the future in their media in terms of AI and its use. He asked Jamison to give a larger picture if this bill doesn’t go into effect.

Jamison responded by saying that they’ll see continued decline and continued loss of papers in many of their communities. He thinks that there are a lot of operations that are running on the ragged edge as it is (and Bill C-18 will easily finish them off once news links are no longer supported). They will just continue to see that decline in advertising, increasing cost of production in the physical world putting out more newspapers and more closures without more intervention. You have to bear in mind that when you look at their membership, they’re secondary of tertiary sources of news in the world. People are looking at the Globe and Mail or the New York Times for that very high level national or international coverage. Then you get into the provincial side of things, and then you get down to your local community. They are all fighting for attention. People’s limited attention span. It makes it especially difficult when you start serving smaller and smaller communities. It’s really difficult to understand how that’s going to affect them in the proliferation of content and the difficulties it’s going to cause in the reporting, sussing out what is true and what isn’t true – especially when you get to generative AI video and whatnot. It’s just going to make reporting ever more difficult and it’s just going to create ever more content for people to have to sift through.

Senator Cardozo asked what he makes of the dinosaur argument, he doesn’t mean to be rude, but some will say that their dinosaur mission is to let you go.

Jamison responded by saying that this is where people need to take their time and actually look at what their people are doing. Many of their members have digital agencies, digital operations, they run in both worlds that many successful models. With the Globe and Mail, they still print papers. Although they are very successful on the digital side, it’s a matter of serving your readers wherever they are. If they thought they could just get away with digital, he wouldn’t go through the headache of having to distribute newspapers every day. It’s a major challenge and major expense, but in the digital world, it’s very difficult to attain enough advertising revenue, especially in smaller markets – much how Bill C-18 is going to fund small publishers (with very little money), they are not high traffic. When they’re writing about what is happening in the tiny village of Bonnyville, Alberta, it’s generally to the people of Bonnyville, Alberta who are interested in that, but it’s very important information to those people in that community. They’re not trying to reach the broad Canadian audience.

(This is the circular argument that drives me nuts. The whole, ‘we’re losing advertising revenue!’, ‘why?’, ‘because our advertising revenue is dropping!’, ‘why not go digital then?’, ‘We don’t want to!’, ‘OK, well just continue what you do, then.’, ‘But digital is taking away our revenue and audience!’, ‘Then make a website!’, ‘But we don’t want to! We are just entitled to all the money they are making after!’, ‘Well, if the money and audience is there, why not build a website?’, ‘We don’t want to!’. You can lead a horse to water, but you can’t make it drink. If they feel that they want to carry on with business as usual, then they are entitled to it. If it collapses on them, then that’s their own fault. They made the choice, why should the internet pay for their poor business decision making?)

Senator Cardozo then turned to Doucet for her answer.

Doucet responded by saying that they share the same opinions. What will be true and what will not be true? What is of particular concern to her, she can see in the Canadian press, there are scholarships. It is almost as if it has infiltrated Canadian press. There are CRTC bursaries that are being offered and she thinks that magazines will continue to exist, but we are in a time of change in terms of just paper or not. All Canadian citizens are not really comfortable with the digital world (I can tell by all the smartphones everywhere.) So, they turn to papers still.

Lapierre said that he just wanted to add that the dinosaur model does operate and people think it doesn’t (well those operators certainly are making a strong case that it doesn’t.) there are dinosaur models that try to move towards digital models, but weren’t able to do so successfully. so, you have a two speed type of model. So you have one that is digitized and one that is hard copy paper. So, it is difficult to juggle those two models, but to come back to artificial intelligence that Senator Cardozo brought up, it is coming on so fast that it is scary. As he said, he spoke about a magazine that was created in 5 days, a 136 page long magazine. People aren’t being hired because AI can do it faster and that is actually happening now. When we are talking about time lost, it’s just too late. It’s already too late. It’s the matter of speed – at the speed of technology and that is making their publishers afraid.

(In my experience, what a number of hard copy news outlets – and broadcasters for that matter – do is simply do the barest of minimums when it comes to having an online presence. They take out a domain, install WordPress or Drupal, buy the most popular theme or look, and copy and paste everything onto their website. They just assume that this is the extent of what you need to do. Some may get a social media presence, but that’s about it. I worked for one organization that was told, rightfully, by head office to start working on a web presence. They hived off a portion of their budget so the business could hire a digital journalist to start working on that.)

(In response, management followed through and hired someone, but right after they were hired, they got that person to simply act as another journalist for their broadcasting operation. I spoke to some others about how that is a terrible way of handling it because when you are a dedicated online position, you are busy from sun up to sun down working on the site. Whether it is sharpening the SEO on news stories published, working social media to build up a presence, or constantly researching new techniques to help make your website sing and dance, you are working on just web stuff. Management in the business didn’t see it that way and simply treated it as some frivolous nice to have activity, but not critical to their success. So, it’s really little wonder why the web presence didn’t take off to the point where a large source of their revenue came from the web after. I suspect many operations doing a digital transition fail simply because management didn’t treat the internet as something to take seriously – even in 2023. I should’ve had no shot at building a website with a bigger presence than an organization that has a whole journalism team, yet I pulled that off several times already – yet I’m the crazy one who doesn’t know what he’s talking about. Go figure.)

Senator Peter Harder said that before he gets into the question, the previous panel and commentary (reference to hearing 5, segment 1) expressed concern that the small ethnic or small rural newspapers and media may be disadvantaged to the programs such as the ones that they are discussing. He just wanted to put on the record that in Australia, which is the basis of this, although somewhat adjusted, in Australia, there are larger organizations that did not succeed in reaching agreements and the small organizations that did and if you look at the highest per journalist payment, it was to the Australian Country Press which has 180 rural newspapers and publications that gained the larger proportion of subsidies per journalist. Just for the record. He thinks it’s important to not just look at the big numbers for the implications of the free press that will hopefully be put in place (also for the record, the small independent newspapers otherwise got largely screwed over in the process as well – just for the record).

Senator Harder then turned to Jamison and asked if he could describe in a little more detail the drop in overall revenue that he experienced. He also expressed concern about the overall time it will take to implement this regime should parliament pass it. He would like a little more commentary from him about what the pace of decline is and how they could shorten the introduction of these measures even if they don’t manage them as a senate individually, we can collectively underscore, to the government and the importance of moving faster in inertia. (Sounds like the death of journalism can’t happen soon enough for the Senator.)

Jamison responded by saying that he doesn’t have the exact numbers sitting in front of him at the moment. They could gather and look into that. This has been a rate of decline over many years – more than a decade (it’s almost as if there are other factors associated with that not tied to the internet). They’ve seen online classifieds being one of the first things that were really hit and so on and so forth. Going over the years, they’ve seen an industry that has been decimated over a long period of time and one that’s been grappling and adjusting over time and one that’s been experimenting in different advertising models and different ways of doing things. They’ve seen a lot of members disappear. This one give you exact numbers. Their association used to have over 120 members. Now, they are just over 90. Some of that because of aggregation of small towns into regional titles and some things just disappearing over time.

With the Australian side, Jamison continued, no one really knows. This is the problem with great uncertainty and what that means to smaller publishers because from what they already know about offers and deals that have happened already, it’s generally built around traffic. The online platforms generally work around traffic. Selling advertising ads against many eyeballs (it’s almost as if it’s about advertising to people that will actually see those ads or something crazy like that). Small newspaper sites don’t drive a lot of traffic. Like he was saying before, it’s just what is of the interest of a local small community. they serve local communities. They are not trying to reach very broad audiences across Canada or even the province. It’s great uncertainty about what this actually means when they look at some of the forecasts that have been done for Canada because the legislation is a bit different and he believes that the platforms are going to treat this a bit differently as they look at their exposure across many different jurisdictions.

It’s not just Canada and Australia that is looking at this, Jamison said, it’s many many different countries from around the world. The platforms are either going to, as Fildebrandt said, and has been indicated by their own witness testimony, they are going to walk away from news, but also that they are going to try to drive much harder bargains because they are looking at how much this is going to cost them across the world as this type of legislation rolls out and becomes extremely expensive. They just don’t know how that’s going to affect them and the kinds of deals they are able to achieve might be quite a bit different than what’s been seen in Australia.

Dennis Merrell of the Alberta Weekly Newspapers Association chimed in. He said that just to put in some numbers to the question from Senator Harder, the decline has been slow and steady over 10, 12 years. As an example, their association has been involved in what they describe as national advertising and having a place in newspapers. In 2010, 2012, it would have been in the $14 million a year annual range. Today, it’s maybe $1 – $2 million. So, in terms of that form of advertising, the decline has been something like 70% – 80%. Locally, what he hears from publishers is that it’s probably more like 30% – 50%. They’re still operating on far far less than a few short years ago. So, it’s pretty dire. (typically, that’s the result of a business model that isn’t working. You had more than a decade warning, yet corrective measures were either insufficient or non-existent.)

Senator Donna Dasko turned to Doucet and Lapierre. She said that just a point of clarification: are they asking for all magazines to be covered in this bill or just for some? If it is just for some, which ones? If they could just describe that because she’s not exactly clear.

Doucet responded by saying that they have the law as they proposed, but they know that for the first criteria, when they talk about taxes, it’s quite easy to get to the list of eligible businesses. They think they are fewer than 10. She can’t give her all the information because some information is confidential, but it’s fewer than 10 she would say. If she could add clause iii to add magazines-

Senator Dasko said that, rather than talking about clauses, if she could describe, rather than talking about clauses, does she want all magazines or just some and if she could describe which ones-

Doucet gave an example of a magazine (French magazine, doubt I’d spell it right), (magazine example) is a magazine about consumer affairs. What kind of laundry machine you should buy or whatever. So, it really is a consumer affairs magazine. It doesn’t deal with opinions, it really deals with facts and logic. She talked about (another French magazine example) because it is a magazine that is really important for young people and to get people interested in science. She then handed it over to Lapierre for other examples.

Lapierre responded by saying that he does have other examples, but to the question, if he can answer it, is that, right now, there is a minority – less than a minority of their members that would be eligible. Now, as he said to Senator Cormier, it would be the majority (I think he meant to say that if their proposed amendments were adopted that the majority of their members would be eligible). They want to include every single magazine that they would represent, but if they could get more involved, he thinks it would help the industry and he thinks it definitely helps their members.

Senator Dasko commented that they are going well beyond news (indeed they are), is that correct in terms of what they are looking for? Because this is supposed to help news operations. So, they are saying any type of interest? (well, if there is an effort to include radio stations that don’t produce news, then their ask isn’t that far out of the, well, insane upon insane ask of demanding for payments for news links)

Lapierre responded by saying that this is correct. It goes down to definition of news and general interest content. That’s where they stand is where they go in-depth in a subject, that’s their specialty with magazines. They do cover news, though a minority of their membership does cover news on a day-to-day basis, but they still do it. As of right now, he doesn’t think they would be eligible. (I think this is where their argument begins to sink into the abyss.)

Senator Dasko said that they think they should be? (Lapierre said “yes”) So, let’s just say Chatelaine magazine, they have some news, but it’s almost 90% lifestyle. Does he feel that they should be magazines (talk over talk, I didn’t get the last of her question)

Lapierre responded by saying that, but newspapers have different categories of content in them, right? You get sports in newspapers (which is also news).

Senator Dasko said that, so he is looking to cover almost all magazines because there is a lot of magazines in this country. (Senator Dasko started laughing, probably realizing the absurdity of the ask.)

Lapierre responded by saying, correct.

Doucet said that they are saying that there is more capacity than they think between newspapers and magazines. They are doing more and more of the same thing in a different way. So they are saying that the law, as it is proposed, is too narrow to include some magazines that could be important. She apologized to not having the list of 400 magazines to make eligible. (400!?) If they are really talking about eligibility now, it’s another step, she thinks it’s going to be after.

Senator Dasko said that she understands that, but it’s the mechanics of this- (time ran out)

Senator Bernadette Clement said that, full disclosure, she loves dinosaurs and pterodactyls. She was a papergirl decades ago. She delivered the Montreal Star. She turned to the Coalition of Magazines. So, in a small market of Cornwall, Ontario, they have a couple of magazines like Cornwall Living and Perch Magazine. A blend of news, blend of lifestyle, very limited editions. They sit in news stands and restaurants for a whole year. People love them and they sit in their homes and they go in depth into local issues. She guesses that her question is, Meta was there last week (reference to hearing 4, segment 2) saying that they would cut off links to news. How does that impact their industry? Their industry is very important to local communities. Does what Meta affect them? To they have any comment on that? (Easy, it’s going to hurt them.)

Lapierre responded by saying that he did read Meta’s threat. Absolutely. Many of their publishers, they use those platforms and some of those contents appear on those platforms without even publishers posting them (something was set up to automate the process then because they don’t scrape the information). So, short answer would be yes, absolutely. It will affect them. To what capacity, that has yet to be defined, but it will be a hard hit on their industry.

Senator Celment asked Doucet if she had anything to add.

Doucet said no. She said that she thinks the web giants shouldn’t be managing their news, nor magazines or local news. Their local coverage as compared with national coverage. They support what is there.

Senator Leo Housakos said that he guesses with the couple of minutes he has left has to do with the CBC which, of course, gets over a billion dollars a year in government funding. Simultaneously, they compete in the same marketplace that your magazines or local newspapers are competing for advertising dollars. Now we have a bill which would be giving them additional funding from digital giants in order for them to compete. Of course, he’d like to know what the witnesses views are on that.

Fildebrandt responded by saying that this is sort of a follow-up question that he didn’t quite get to from Senator Simons about the challenges that they are facing. The biggest challenge is, by far, they face at the Western Standard at least is that their competitors are subsidized with their own tax dollars. They are a relatively small company paying taxes to Ottawa that are then being redistributed to their competitors. So, for instance, the CBC- he isn’t going to get into what people thinks about them, but they are clearly a competitor. While they are technically a broadcaster, the distinctions between what is a broadcaster, a magazine, a newspaper, they are irrelevant today. He fought with the Workers Compensation Board about if the Western Standard is a magazine or a newspaper. Well, they are kind of neither. They used to be a magazine at one point, but they had a fight over it because they are trying to determine what their premiums were. They are all the same thing. They are all online. Some have a physical manifestation with a CRTC license, some might have a physical print product, but you can’t tell the difference with them any more.

The CBC, Fildebrandt continued, is not just competing with CTV and Global, they are competing with the Edmonton Journal, the Western Standard, the Toronto Star, but then PostMedia, the Heralds, the Journals, the Suns, they are competing with them as well and they are doing so with our tax dollars against us. Bill C-18 wouldn’t necessarily be our tax dollars against us, but we are still giving a leg up to their competitors over them – theoretically if the money is actually there. He is very skeptical that the money would actually be there. They are just going to be collateral damage in the fight between them. If there really is anything that Ottawa can do to help independent publishers, the innovative ones, guys who are selling light bulbs, not candles, is to stop funding the candle industry. Stop trying to advantage their competitors over them with our own tax dollars and let nature, let the market, sort it out.

Lapierre said that he is not there to open a debate, but some of the competitors that he is talking about are some of his members who are barely keeping their head above water. He thinks it’s crucial for democracy to have many voices, not just one. So, to him, it’s crucial to have help, to have as many voices as possible. That’s through some funding and-

Senator Housakos said that his question is about concentrating so much capital into just one voice. How do you help out the other voices?

Doucet responded by saying that she sincerely think that Radio Canada/CBC are both very important for democracy and that voice is going to remain essential for many many people – for facts to speak to them.

Senator Housakos thanked the witnesses for being there and, with that, he adjourned the hearing.

Concluding Thoughts

Probably the first thing that sticks out for me here is the juxtaposition of several legacy lobby groups crying poverty and the Western Standard who points out that they are doing just fine. I mean, as far as their testimony is concerned, they aren’t actually doing anything particularly revolutionary or novel, either. They built up their own advertising model and paired it with subscriptions. All this is something that the legacy media has done for decades now. Yet, the legacy media, sitting there in the exact same room, are sitting there saying that this is all just too darned hard and the government should intervene and save the day for them. It’s staggering the difference. The answer to a lot of their problems is sitting there, right next to some of them even, saying that success can be found online. If anything, the other witnesses should be exchanging cards and asking Fildebrandt for advice. Problem solved at that point.

With respect to Doucet and Lapierre, it was weird to more or less agree with the stripping of 27(b)(iii) as that would also benefit small website operations like Freezenet. Unfortunately, their arguments pretty much went straight down the tubes when they pretty much stated how they want to include all or most magazines, even those that don’t actually produce news to any great capacity. It’s already bad enough that “spoken word” radio can apply without even producing a line of news, but now there is an ask for magazines that also provide little to no news be included in this? No wonder senators couldn’t help but laugh at that.

Of course, this also speaks to the point of including way too many players to the eligibility list. Everyone and their dog is demanding money. There’s only three possibilities that come from that: either Google and Facebook drop support for news links (highly likely. I agree with Fildebrandt on that one), that players only see a couple of dollars because the pool is absolutely congested with eligible players, so everyone gets pennies, or the ask of dollars goes up (which would only further encourage the platforms to leave, see possibility one). When the magazine witnesses noted that they have over 400 members, that really worked against their argument quite a bit. The math is already awful and adding in more players is only going to worsen the issue.

Finally, there’s Jamison. In his full throat support for the bill, he ended up making the argument that his organization members are simply entitled to money. He goes on and on about how his members are often serving small communities that don’t have broad reach and appeal. Yeah, no kidding that’s a problem. At the same time, he is demanding money from the large platforms. For what reason? He feels their members simply deserve more money because they’re important to them, darn it! To me, the entitlement factor is extremely annoying.

I mean, I look at my site and I can admit that the revenues are low. I have almost nothing to work with, but I am finding ways of gradually increasing the audience which is helpful. I can say that this sucks, but my response is to work on making the content better and more attractive to an audience. I don’t sit here and say, “gee wilkers! I only make this much money, but I personally think I should make this much money! I better go running to the government and say that I deserve the added money because there is a discrepancy with how much I make and how much I think I should make!” That is an absolutely toxic attitude to have and if the government had any sense, it would look at me and say, “Yeah, right, whatever. Either ask about something the government could actually do to help that is reasonable or pound sand.” Yet, these media outlets feel that the world should bend to their will and their own version of reality where they are the most important people in the room and their roles in society are sacred and should be propped up at all costs. It’s all very frustrating.

Of course, that leaves Fildebrandt. I’m not entirely on board with the coverage his organization has offered on his site. Some of it is a little bit embellished at times. At the same time, though, I think his performance in the hearing was very spot on. There was nothing that I really disagreed with. He ended up being the smart guy in the room, pointing out what should be obvious. A great example is his point about how Bill C-18 could very easily hurt his business because Google and Facebook could drop news links altogether.

This is a very real threat for many online publications because they basically put everything into reaching audiences on those platforms. There is nothing wrong with that because it’s a very fast way to grow an audience. Unfortunately, it sounds like, as a result, they have more or less become dependent on those platforms to reach audiences. My advice to the Western Standard is to start looking for ways of adjusting the business model to be less dependent on news links altogether. It would be a very painful process and the payoffs are probably a fraction of what you would get with the status quo with news links, however, it would increase your chances of survival. I would rather survive and be a shadow of my former self rather than instantly go bankrupt, personally.

So, think of things like offering information on local businesses, or calendars for local events, or other ways of serving the community with added features. Think about features that fits well with topics of coverage for your news organization. Unless Google drops non-news links for these publications (which would be shocking to me), then you still have the option of showing up on normal search which still pulls in a nice amount of traffic. I know because I have almost zero presence or marketing on platforms, yet I am a top 2 million website on the internet that actually pulls in a decent amount of traffic for the manpower the site has. Either way, the time is now to put together a contingency plan because I think we both know where this debate is headed to eventually.

At any rate, supporters are struggling to come up with a coherent reason why this bill in particular is the right approach. I haven’t seen a coherent argument up to this point and that argument has yet to materialize still. It’s always just been about, “I think I’m important, so gimme money and give it to me now!” To me, you gotta do much better than that to even remotely be convincing here.

Drew Wilson on Twitter: @icecube85 and Facebook.