The federal government of Canada has revealed its estimates for how much compensation it expects Google and Facebook to provide to Canadian media companies under the recently passed Online News Act. This legislation mandates that tech giants compensate media organizations for their use of Canadian journalism.
According to federal officials, Google would be required to offer $172 million annually, while Facebook would need to provide $62 million each year in compensation to meet the proposed criteria outlined in draft regulations released by the government. These regulations aim to level the playing field between Big Tech and Canada’s news media sector and specify which companies will be subject to the law.
Heritage Minister Pascale St-Onge, commenting on the proposal, stated that the goal of the Online News Act is to ensure that those benefiting the most from the Canadian market fall under its provisions.
The legislation will apply to companies meeting the following criteria:
- Total global revenue of $1 billion or more in a calendar year.
- Operation in a search engine or social media market that distributes and provides access to news content in Canada.
- Having 20 million or more Canadian average monthly unique visitors or average monthly active users.
Currently, Google and Meta’s Facebook are the only companies meeting these criteria, with Microsoft’s Bing search engine being the next closest to falling under the act.
Veronica Langvee, head of communications for Microsoft in Canada, stated that the company intends to comply with the legislation as it applies to their products.
However, Instagram and Threads will not be subject to the proposed legislation because they have not yet reached 20 million or more monthly Canadian users.
The Online News Act allows companies that meet the criteria to receive exemptions if they already contribute a specified amount, determined by a government formula, to Canadian journalism. This formula is based on the tech company’s global revenues and Canada’s share of global GDP, aiming to provide a contribution within 20 percent of the earnings of full-time journalists in Canadian news organizations. Companies can meet the criteria through both monetary and non-monetary compensation, although the draft does not specify what non-monetary contributions would be considered valid.
The draft regulations will undergo a further 30-day consultation period. However, Facebook and its subsidiary Instagram, which had previously blocked news content on their platforms in anticipation of the law coming into effect, expressed immediate disappointment with the proposal.
Rachel Curran, head of public policy at Meta Canada, called the proposal based on a “fundamentally flawed premise” and stated that it would not affect Meta’s decision to end news availability in Canada.
Google, while appearing more cooperative than Meta, also voiced concerns and threatened to remove Canadian news from its offerings. Google spokesperson Shay Purdy said they are carefully reviewing the proposed regulations to assess whether they address the structural issues with the legislation.
The government is advancing with the Online News Act because Google and Meta jointly control 80 percent of the $14 billion in online ad revenue in Canada in 2022. Meanwhile, news outlets have experienced declining advertising revenues, leading to layoffs, reduced media coverage in small and rural communities, and the closure of 474 Canadian news businesses between 2008 and 2023.
The government also highlighted that while 69 percent of Canadians access news online, only 11 percent pay for it. In response to Meta’s removal of Canadian news, the federal government withdrew $10 million in annual advertising spending from Meta’s platforms. Several news and telecommunications companies, including Quebecor, Bell Media, Torstar Corp., Cogeco, and Postmedia Network Canada Corp., followed suit.
Paul Deegan, president and chief executive of News Media Canada, praised St-Onge’s approach to the complex issue and was pleased with the provided clarity and predictability, stating that the regulatory framework appeared fair and balanced for all stakeholders.