CBC/Radio-Canada largely excluded, written media outlets receive bulk of funding from Online News Act

Nearly two-thirds of the entire envelope is reserved for written media outlets, including newspapers

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OTTAWA — CBC/Radio-Canada is largely excluded from the $100 million Google must inject into Canadian online news as the lion’s share of the funds is earmarked for newspapers and digital media platforms.

The public broadcaster, which is funded to the tune of $1.2 billion annually by the federal government, will be limited to seven per cent of the total value of the indexed fund, according to regulations governing the application of the Online News Act (formerly known as C-18) published on Friday.

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Since the fund is valued at $100 million in its first year, that means CBC/Radio-Canada’s share is capped at $7 million.

The regulations also limit the share available to broadcasters at 30 per cent, meaning nearly two-thirds (63 per cent) of the entire envelope is reserved for newspapers and digital media platforms.

As of now, Google is the only tech giant that meets the criteria spelled out in the Act that compels it to contribute to online news since Meta (which owns Facebook and Instagram) banned Canadian news links from its platforms earlier this year.

The controversial Act requires eligible social media and search engine tech giants that “make news content available” to reach commercial deals with Canadian news publishers (National Post’s owner Postmedia supported the legislation).

Heritage Minister Pascale St-Onge said Friday she thinks the regulations are “extremely good” for Canadians, democracy and the sustainability of Canadian newsrooms.

“Today marks the last day of the government’s work in implementing the Online News Act,” St-Onge said with a smile that betrayed her likely relief that the thorny file was finally out of her hands.

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She also said it didn’t “make sense” to exclude CBC/Radio-Canada from the deal despite critics saying it took money away from small, private media companies who don’t benefit from major federal funding.

“To exclude the public broadcaster completely, I believe and the government believes, would have devalued its essential role. But we set the cap at seven per cent because we are taking into account the realities of the private market,” she added.

In a statement, Google spokesperson Shay Purdy said the Act was “fundamentally flawed,” but that the company was happy the government acknowledged many of its concerns while drafting the regulations.

The regulations do not spell out how much money will be distributed to individual media companies. But they include two options for tech giants to meet their funding requirements under the new Act.

The first dictates platforms must negotiate individual agreements with news businesses or groups that meet the standards set out in the Act.

The second allows companies to apply for an “exemption” and instead sign a single agreement with a single group of news businesses to which they will pay a lump sum. That’s the case for Google.

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In late November, Google agreed with the federal government to pay $100 million in the first year (indexed thereafter) via a single agreement earmarked for a group of eligible media companies.

The regulations dictate that sum will be distributed to news businesses proportionally to both the caps set on broadcasters and CBC/Radio-Canada as well as the number of “full-time equivalent employees engaged in the production of news content.”

To be covered by the Act, tech companies need an annual global revenue exceeding $1 billion, operate as a search engine or social media platform that distributes Canadian news and has a minimum of 20 million Canadian users.

But the money from Google will not land automatically in news media outlets’ bank accounts as soon as the regulations kick in on Dec. 19.

During a background technical briefing for reporters on Friday, a senior Heritage Canada official said they expect Google to launch a 60 day “open call process” early in 2024 to identify interested media businesses. At the end of that period, it will publish a list of outlets that have responded to the call and embark on the contribution process.

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At the same time, Google has 180 days to signal to the Canadian Radio-television and Telecommunications Commission (CRTC) that it is captured by the Online News Act. At the end of that, the government expects the search engine giant to apply for an “exemption” that allows it to sign a single agreement with a group of media companies.

Small print and digital outlets can expect to receive about $17,000 per journalist that they employ, the official said.

The Heritage official said it will be up to media businesses to designate a single organization that will receive and distribute the funds to outlets based on their number of full-time journalists (which can include technicians, producers, etc.).

“It’s incumbent on the sector to come together, get themselves organized and create an organization or identify an organization that the sector is comfortable with and that will represent the sector as a whole,” he said.

Speaking to reporters in Vancouver, Prime Minister Justin Trudeau said conversations with Meta were ongoing but did not sound hopeful a resolution was in sight.

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“Unfortunately, Meta continues to pretend like it doesn’t have a role to play in the protection of our democracy, but we will continue to work with them because we find that journalists who work to keep people informed … should be compensated for their work,” Trudeau said.

In a statement, News Media Canada, which represents hundreds of publications, including National Post, celebrated the announcement and work done by St-Onge.

“Two years ago, in an attempt to thwart the need for legislation, large online platforms were picking winners and losers among Canada’s news publishers. Today, we have a solid regulatory framework with teeth that ensures Google compensates news publishers — large and small — for the exceptional reporting our journalists do, without fear or favour, on behalf of their fellow Canadians,” organization chair Dave Adsett said in a statement.

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