On June 22, Bill C-18, the Online News Act, received Royal Assent despite vigorous debate in the House of Commons and concerns expressed by key stakeholders, notably from global tech giants, including Meta and Google.
What is the Online News Act?
On the heels of the government’s earlier success in pushing Bill C-11 or the Online Streaming Act through Parliament, Bill C-18—the Online News Act—comes as the second major legislative intervention by the Trudeau Liberals, delivering on the party’s campaign promises to level the playing field between Canadian content, the national news industry and global tech giants.
While the Online Streaming Act makes provisions for Canadian content on YouTube and other streaming platforms such as Netflix, the Online News Act establishes a new legal framework requiring social media platforms and search engines to provide fair compensation to Canadian news producers when sharing Canadian news content. Heritage Minister, Pablo Rodriguez, has explained the federal government is taking this action in response to concerns that advertising revenue has migrated away from Canadian news media to social media platforms.
The inspiration—Australia’s News Media and Digital Platforms Mandatory Bargaining Code Act
With the Online News Act, Canada’s Liberal-led minority government draws from Australia’s News Media and Digital Platforms Mandatory Bargaining Code Act (NMBC), which was put in place in 2021. The result: Google warned users the legislation would affect their ability to search, and Meta temporarily blocked all news content from its platform in Australia. Eventually, after amendments made the law less stringent, both organizations cut deals amounting to more than AU$200 million with multiple news companies to avoid mandated arbitration. In its first review of the NMBC, the Australian Federal Treasury positioned the legislation as a success.
Latest developments, fluid political environment
As was the case in Australia, both Meta and Google expressed significant concerns with the new legislative framework. Both platforms have conveyed their respective commitment to halt sharing Canadian news content once the legislation comes into effect. Meta’s response was communicated in an updated statement on June 22 reading, “today, we are confirming that news availability will be ended on Facebook and Instagram for all users in Canada prior to the Online News Act taking effect.” The timeline of this planned outage is currently unclear, though Meta has stated it is currently testing a feature that removes visibility of content for 5% of Canadian users.
On June 29, Google released a statement that reads, “when the law takes effect, we unfortunately will have to remove links to Canadian news from our Search, News and Discover products in Canada and that C-18 will also make it untenable for us to continue offering our Google News Showcase product in Canada.”
In response to the concerns and actions taken by Meta and Google, Prime Minister Trudeau has stated “the fact that these internet giants would rather cut off Canadians’ access to local news than pay their fair share is a real problem…it’s not going to work.” Aligning with the Prime Minister’s stance, Minister Rodriguez hosted a media conference on July 5, alongside opposition heritage critics, Peter Julian (New Democratic Party) and Martin Champaux (Bloc Québécois). While the three-party alliance confirmed the government’s intention to proceed with this Parliament enacted legislative framework, Minister Rodriguez committed to address the concerns raised by stakeholders in the regulatory process ahead.
Following this media conference, Heritage Canada issued a release emphasizing that the regulatory process would address the key issues raised by online platforms, including: establishing a financial threshold for the required compensation by social media platform to Canadian news outlets, relative to the market position; take into account existing agreements, and provide for non-monetary compensation.
What remains unknown and possible implications ahead
Provisions in the Online News Act only come into force once the government finalizes the prescribed regulations through a separate rule-making process, which will be led by the Heritage Minister. Given the newfound roles for this undertaking for both Canadian Heritage and the CRTC, regulatory development could prove to be lengthier than the estimated six months, which is set out as the earliest timeline in the legislation.
Despite this runway, companies active on news and social media platform must pay attention now and should not wait until a regulatory framework is developed. Staying attuned to new developments will be critical to adapting earned media or sponsored content amplification strategies to continue ensuring the best return on investment. NATIONAL is already seeing rapid development in this space including Minister Rodriguez announcing a moratorium on the federal government advertising on Meta’s platforms and Google. Companies like Bell, Cogeco and Quebecor have followed suit and announced a similar moratorium.
Longer-term implications will depend on the passage of the final regulations, including whether any compromises will be made in response to the concerns of tech giants and the Canadian public. Depending on the specifics of the regulatory framework and the resulting policies that digital news intermediaries roll-out in reaction to it, this new legislation could result in significant implications for individuals and organizations alike.
For the average Canadian, this could include having to access Canadian news articles through a VPN or outlet-specific apps and navigating changing platform policies. For advertisers this could mean increased costs as social media platforms seek to recoup the fees they will be required to pay Canadian news sources. From either perspective, there’s no doubt that as the government seeks to formalize how the Act is to be implemented, Canadians can expect changes to happen on the fly and with very little warning.
The way forward
To brace for impact and prepare for the regulatory framework that comes out of Bill C-18 and various platforms’ responses, NATIONAL recommends that leaders take the following steps in collaboration with their legal, digital, and media teams:
- Determine if your organization qualifies as an “eligible news business”. If your external communications include publishing blog-type articles that could potentially be covered by Bill C-18 as “news content,” it’s best to ascertain with your legal teams if your organization qualifies as “an eligible news business.”
- Assess sponsored content contracts and amplification strategies. Sponsored content placements with Canadian news outlets are still strongly recommended as an effective tactic given the opportunity for organizations to associate highly controlled messaging with the credibility and authority of prominent news outlets. In the context of Bill C-18, knowing that social media won't be a big driver for clicks, organizations must review agreements and understand how outlets plan to amplify content to their audiences. Moving forward, strong contracts should include avenues like native advertising or distribution through mobile apps to drive impressions and clicks as opposed to relying on social media promotion.
- Exclude news content links from organic social media posts. To ensure content isn’t blocked, adjust organic social media posts on Meta so they don’t include external links to news content. In the long term and as policies are solidified and finalized, this could include links to podcasts, videos or images that have the potential to be considered news.
If you would like to discuss the potential implications of Bill C-18 on your business, please reach out to Azin Peyrow, Senior Director, Public Affairs, or NATIONAL’s Managing Partner in your area.
