The announcement of a deal struck between the Trudeau government and Google over Bill C-18, seeing the tech giant pay out $100 million to Canadian news outlets brings about a flurry of concerns regarding how that money will be divvied out.
Bill C-18, also known as the Online News Act, was first passed in June 2023 and mandates that tech giants like Google and Meta compensate Canadian news outlets for news content posted on their platforms.
Initially, Google responded to the legislation by threatening to remove all news content and links from their platforms as a way to opt out of the payment, giving the Trudeau government a deadline of Dec. 19 to propose a better deal.
On Wednesday, they announced an agreement that would see Google pay out $100 million to media outlets annually.
Meta however, removed all news links and content several months ago and have stuck to their guns in their resolve to not comply with Bill C-18.
With the Google deal now finalized, many wonder how the outlets and which ones will receive funding under the new agreement.
“We’re pretty close, by my estimation, to a 50 percent wage subsidy on journalist salaries up to $85,000 per year,” said Rudyard Griffiths, executive director of the Hub.
Prior to the recent agreement, Canadian Qualified Journalism Organizations could already receive the Canadian Journalism Labour Tax Credit which offers refundable tax relief of 25% up to a yearly cap of $55,000, per eligible newsroom employee.
The government announced that it will increase that tax credit up to 35% with a new annual cap of $85,000 per newsroom employee, under their Fall Economic Statement.
According to Griffiths’ estimation, with the government’s new federal tax credit in combination with Google’s $100 million, soon almost half the salary of a journalist making $85,000 will be paid out by these two entities.
This would mean that the Trudeau government has basically attained their goal of subsidizing 50% of the salaries for Canadian journalists.
“What does it mean long term when as much as half of the newsroom costs of private media organizations, not the CBC, will be paid for by government support?” asked Griffiths. “This likely is not going to be positive for the ongoing challenges that mainstream media is facing in terms of declining public trust in the very news and information that they produce.”
Canadians have consistently been losing trust in the news media over the past several years, according to numerous polls.
A survey conducted in 2023 revealed that Canadians who trust the news had fallen from 55% in 2015 to 40% in 2023 and this new deal is only likely to put further strain on public trust in the media.
“They’re paying half of the bills of the very newsrooms that are extensively there to investigate them, challenge them, and report on their policies and prescriptions for society,” said Griffiths.
Canada’s Research Chair in Internet and e-Commerce Law at the University of Ottawa Michael Giest said that money that is paid out under the Online News Act will likely only benefit the legacy media outlets, rather than smaller, independent organizations.
“The parliamentary budget officer tells us 75 percent of the money goes to the broadcasters, radio, and television largely based on the way it was structured,” said Geist, speaking before the Committee as a witness.
“Personally, I think it was a mistake to think that, at a minimum, if the goal was to support the core and what we would think of as newspapers or digital publishers. And that’s where the focus of the legislation ought to have been,” added Geist.
The details of just who will benefit from the new deal with Google remain unclear as newer startups may not be given the same treatment as legacy media.
Eligibility for the Canadian Journalism Labour Tax Credit is adjudicated by the Canadian Revenue Agency (CRA), whereas the Canadian Radio-television and Telecommunications Commission (CRTC) will be handling the funding from the Google agreement.
“There will no doubt have to be some interesting decisions that get made about what the CRTC thinks original news content is,” said Griffiths. “My sense is that you would probably want to allocate the funds as close as you can on a qualified journalist per organization basis.”
