Independent media calls Bill C-18 'a corrosive, poisonous thing' for journalistic integrity

Since 2019, Parliament has subsidized outlets deemed 'qualified' by the Canada Revenue Agency, worth up to 25% of the annual payroll or $13,750 per newsroom employee.

  • By Alex Dhaliwal
  • June 05, 2023
  • News Analysis
Independent media calls Bill C-18 'a corrosive, poisonous thing' for journalistic integrity
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While testifying on Bill C-18, the Online News Act, Ottawa's top lobbyist informed the Senate Transport and Communications committee that news media needs government — a revelation that surprises no one.

"We need them," said Paul Deegan, CEO of News Media Canada, on account of "market failure" caused by dwindling readership and revenues.

"We need a solution, and that's why we've come to the government even though we would like to stay as far away from the government and the CRTC as possible. But we do need them," he told senators.

Deegan testified on May 30 on Bill C-18, which would compel tech giants Google and Meta to pay newsrooms a portion of ad revenues from linked stories. The CRTC would determine which outlets would qualify, reported Blacklock's Reporter.

"We represent all…right down to these independents," he claimed, adding that not all independent newsrooms are members of the News Media Canada lobby group.

Since 2019, Parliament has subsidized outlets deemed "qualified" by the Canada Revenue Agency, worth up to 25% of the annual payroll or $13,750 per newsroom employee. The $595 million bailout program expires on March 31, 2024, according to Blacklock's Reporter.

However, not everyone is thrilled with the government intruding on the media.

"Everything about this bill is a disaster," said Jen Gerson of Calgary, co-founder of the online newsletter The Line. She called government meddling in the media a "poisonous thing" for news media integrity. 

"Any kind of government funding to media where you have the entire media market to some degree dependent on legislation or government funding will inherently damage not only trust in media but media itself," said Gerson. "It is a corrosive, poisonous thing. I am sure there is a business school word for it."

"When your competitors are all picking up the subsidy, you have to compete," she continued.

Jeff Elgie, CEO of Village Media, testified to senators that his business would cease if Meta and Google stopped linking news stories from his publication. He said this "is a much worse outcome" than having tech giants surrender a portion of advertising revenues under Bill C-18.

"Google and Facebook represent over 50% of our total traffic," said Elgie. "Google is around 30% to 35%, Facebook as of [May 30] is roughly 17% depending on the market we're discussing. If that traffic is lost, the business will be over."

Village Media publishes 25 local news websites across Ontario, reported Blacklock's Reporter.

Deegan also called Meta's move to limit 5% of Canadian users from viewing and sharing news a "kick in the shins." 

"Meta's decision to 'unfriend' Canada by denying access to trusted sources of news for some of their users, as wildfires burn and when public safety is at stake, is irresponsible and tone deaf," Deegan told CBC in an email.

In February, Google blocked 3.3% of Canadian users from viewing news links for five weeks. It impacted more than 1.1 million IP addresses.

Deegan warned that if Facebook blocks news sharing, it will restrict public access to reliable information.

"What would be left on their platform? They're the plumbing of social media, and you have clean drinking water, which is news. But then you have all sorts of sewage: the misinformation and disinformation," he said. "What this bill is about is ensuring that local news survives."

Senators from the communications committee also asked about the state broadcaster CBC getting federal and commercial advertising. 

"The CBC should be free of commercial advertising," Deegan told senators, calling Ottawa to spend more money advertising in newspapers, including local papers.

"We need the feds to step up," he continued. "Federal ad dollars shouldn't be going to the CBC, and frankly, private-sector ad dollars shouldn't be going to their news and current affairs properties."

According to the Canadian Taxpayers Federation (CTF), the number of CBC staffers taking home six-figure salaries has increased yearly since Justin Trudeau became prime minister.

During the 2015/16 fiscal year, 438 full-time CBC employees took home six-figure salaries that cost taxpayers about $59.5 million.

By the 2021/22 fiscal year, the CBC had 949 full-time employees who took home six-figure salaries, costing about $119.5 million. 

"Taxpayers don't need all these CBC employees making six figures," said Franco Terrazzano, Federal Director of the CTF. "What value are taxpayers getting from all these extra CBC staffers with big salaries?"

Despite operating during financially feeble times, internal records uncovered through an access-to-information request revealed the broadcaster did not cease expansion efforts during the COVID pandemic. 

Employees of the state broadcaster earning an annual salary exceeding $100,000 rose 14% in 2020/21 and 13% in 2021/22. This led to 220 more employees receiving a six-figure wage after the pandemic.

Additionally, they issued $51 million in bonuses and pay raises during the pandemic, with only one employee receiving a pay cut.

"The CBC shouldn't have doled out bonuses while taxpayers lost jobs and businesses during the pandemic," continued Terrazzano. "If the CBC has enough money to hand out millions in bonuses and raises during a pandemic, taxpayers shouldn't be forced to fork over more money."

The broadcaster cost taxpayers $1.2 billion in 2021, which included $21 million in "immediate operational support" to ensure its "stability during the pandemic." Ottawa also allocated "$42 million to help CBC/Radio-Canada recover from the pandemic."

Canada Media Party News Analysis
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