Google and the federal government have reached an agreement over the controversial Online News Act (Bill C-18) that will see the tech giant keep Canadian news links in its search results and compensate publishers for their use.
The last-minute deal—just three weeks before the search company was set to remove Canadian publishers from its products—averted a looming crisis that could have significantly hampered Canadians' ability to access news and information, a move that would have far-reaching ramifications across the country's digital advertising ecosystem.
The last-minute deal—just three weeks before the search company was set to remove Canadian publishers from its products—averted a looming crisis that could have significantly hampered Canadians' ability to access news and information, a move that would have far-reaching ramifications across the country's digital advertising ecosystem.
According to a statement from Minister of Canadian Heritage Pascale St-Onge, Google will continue to feature links to Canadian publishers in its results, and will compensate news companies with annual payments worth $100 million a year.
"Following weeks of productive discussions, I am happy to announce that we have found a path forward with Google for the implementation of the Online News Act," said St-Onge in a statement issued this afternoon. "This will benefit the news sector and allow Google to continue to play an important role in giving Canadians access to reliable news content."
She said Google will have the option to work with a single collective to distribute its annual payout to all interested and eligible news businesses, with the amount received determined by the number of full-time equivalent journalists.
Google has also pledged to continue making programs such as training, tools and resources for business development and support for non-profit journalism projects, available for Canadian news businesses.
Quoting a government source, the CBC reported that the federal government and Google agreed on the regulatory framework earlier this week. "Having taken this first step with Google is important," said the CBC source. "It is one more solution to ensure the viability of the media and restore a balance between commercial platforms."
Google had announced its intention to remove links to Canadian news from its search results shortly after Bill C-18 passed in June. It lambasted the legislation as "unworkable," describing it as a "link tax" that "breaks the way the web and search engines have worked for more than 30 years."
In a blog post, vice-president of government affairs and public policy Cris Turner said that the bill presented an "unprecedented requirement that platforms pay for simply showing links to news, something that everyone else does for free."
Meta, the other tech giant targeted by the Online News Act, followed through on its threat to block news on its Facebook and Instagram platforms in the summer, leading to an impasse that has stretched on for four months. Google originally planned to follow through on its intention to block news links when the bill takes effect on Dec. 19.
Both members of the duopoly had contended that they send vital online traffic to publishers, with Meta claiming that Facebook Feed alone was responsible for more than 1.9 million clicks in the 12 months to April 2022. It said that the traffic it sent to publisher sites equated to more than $230 million in "free marketing."
However, publishers have claimed that the digital platforms now dominate the digital advertising market by using their content to capture ever larger audiences.
While the deal ensures new revenue for them, publishers contacted by The Message were not commenting publicly on Wednesday. In an email, Torstar spokesperson Bob Hepburn said the company will hold off on making a statement "as we are waiting for the final regulations to confirm key details."
And Postmedia, which operates major dailies including the National Post—which earlier this year ran a column by political consultant and commentator Warren Kinsella accusing Google of "pilfering and profiting from news they don't produce"— said that it, too, was not ready to respond.
In a statement, CBC/Radio-Canada called the deal "a very important step towards building a healthy news ecosystem for Canadians," and said it is encouraging for companies and news company's around the world who are facing the same challenges. "We look forward to the next steps in these discussions," it concluded.
While acknowledging that putting $100 million back into the Canadian media ecosystem represents "progress," Dentsu Media Canada president Sarah Thompson renewed her calls for Canadian brands to pursue a more mindful media investment strategy.
"This can be bigger, up to $350 million, if every Canadian brand were to shift media investment into Canadian owned and operated media," she wrote on LinkedIn.
Her comments were echoed by Canadian Media Directors' Council president Shannon Lewis, who said that while Google's plan to invest in Canadian news represents a "positive step," and signifies the government's responsiveness to business community concerns, advertisers need to be more cognizant of the importance of supporting local media.
"[I]t is imperative for us, as leaders, to recognize that more needs to be done and to act swiftly," she said in an emailed statement. "While we commend the intent and actions of Google, it is also crucial for our advertising industry to realize the value of investing in local media. As economic activity shows signs of slowing down, it is essential that we prioritize and strengthen Canadian media."
While the government's standoff with Meta remains unresolved, the deal with Google means Ottawa prevents an escalation of the feud that threatened to cause significant disruption in how Canadians get their news, and potentially further starving publishers of vital site traffic and its attendant advertising revenue.
'"A sustainable news ecosystem is good for everyone," said St-Onge. "News and journalism serve to inform communities, drive civic engagement and counter the rise of disinformation. Access to news helps Canadians fully benefit and participate in democratic society. With newsrooms cutting positions or closing entirely, the health of the Canadian news industry has never been more at risk."
