Peter Menzies: Extortion, Dependency, and Media Welfare: The Liberals’ Bill C-18

Online News Act (Bill C-18) is now under review in the Senate. (Kaspars Grinvalds/Shutterstock)

Commentary

Twenty years ago, the newspaper I worked for turned an easy $50 million-plus a year in profit. Less than three months ago, its building was sold and remnants of its once-bustling newsroom work from their homes. Its owners increasingly depend on federal government assistance, the latest version of which, the Online News Act (Bill C-18), is now under review in the Senate.

The news lobby has no apparent qualms that this bill will create a media industry dependent upon the good graces of the two most imposing powers in the lives of citizens these days: Big Tech and Big Government. They claim, unconvincingly, that Facebook and Google have been “stealing” their journalism and must pay them—through C-18—hundreds of millions in annual compensation.

So how did we get from those proudly profitable and ruggedly independent days to an industry begging the government for corporate welfare? Prior to the worldwide web, 30-40 percent of major dailies’ revenue came from classified advertising. Before Kijiji, society’s cavalcade of births, deaths, marriages, and engagements passed through those pages, along with Help Wanted ads, plumbing, carpentry, and other services.

Thanks to upstart online entities such as Craigslist and Kijiji, that money was the first to disappear. According to an article in the Harvard Business Review, by offering online ads for a pittance—sometimes nothing at all—Craigslist saved American consumers $5 billion in just its first seven years. Which means it cost newspapers the same amount, with proportional impacts in Canada.

Newspapers had no response. Nor did they when car dealers, real estate agents, grocery stores, and others discovered they could sell directly to customers through their websites. Concurrently, Google and others developed search engines that assumed the role of matchmaker between buyers and sellers and then along came Facebook where people could announce their OMG I said Yes! engagements, the births of their children, and the deaths of their parents.

The business effects were devastating. The relentless culling of jobs began in the first decade of the century following the acquisition by Canwest Global Communications Corp. of most of the nation’s big newspapers. After Canwest’s collapse and the creation of Postmedia Network Canada Corp., the “efficiencies” became even more pronounced. The overall headcount of newspaper employees in Canada is difficult to determine but between 2014 and 2020, employment at just four locals of UNIFOR (Canada’s largest private-sector union, which includes “media workers”) dropped by 45 percent.

The more eyeballs moved online, the more advertising followed and the more jobs disappeared in newsrooms. Almost 500 Canadian newspapers (many of them weeklies) have died. On the bright side, more than 200 online news platforms have started up. But they lack lobbyists, which means it is the aging dailies that remain the focus of the political class.

To the entrepreneurial class, this is madness. Jen Gerson of The Line calls the tottering dailies “little more than a zombie in nun’s drag.” But as it turns out, zombie drag queens have plenty of pull on Parliament Hill. Representatives of legacy news organizations successfully lobbied Ottawa for $119 million annually through a labour tax credit. They then scored $10 million a year—now doubled to $20 million—for something called the Local Journalism Initiative. Some critics warned they’d soon be back for more.

“More,” as it turned out, was already in the works in Australia. There, Rupert Murdoch accused Facebook/Meta and Google/Alphabet of “stealing” his products and the Australian government responded with legislation imposing a News Media Bargaining Code forcing the web giants to pay up. Facebook responded by banning links to news stories.

After a week-long kerfuffle, the government amended its legislation and Meta/Facebook began making private commercial deals with news providers. Last year, Facebook expressed dissatisfaction with the outcomes and hinted at not renewing its deals. And while many Australian news organizations assert that more journalism jobs have indeed been created, just two months ago Murdoch’s News Corp. announced it would cut 1,250 positions.

The Canadian government’s enthusiasm for implementing something similar remains undiminished. So much so that, after newspapers did all the legwork, broadcasters waded in to influence the structure of Bill C-18. As a result, according to the Parliamentary Budget Officer, they will take home $249 million of the $329 million he estimates C-18 will generate annually for news providers from the web giants. The two largest beneficiaries will likely be the CBC and Bell Media, leaving a mere $80 million for legacy newspapers bleeding millions.

In February, Google began a widely publicized assessment of what the impact might be if it de-indexed Canadian news websites. The touch was relatively light, using its options through a series of “experiments” that denied 4 percent of its search engine users access to Canadian news results.

And then last month, to the news lobby’s dismay, Facebook announced it would stop (to use the publishers’ terminology) “stealing” and will no longer permit links to news stories once Bill C-18 passes. At this point—and with numerous non-partisan experts declaring C-18 an utter disaster—it appears that the best this chaotic legislation can offer is palliative care for geriatric organizations incapable of adapting to change.

The original extended version of this article recently appeared in the C2C Journal.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.