On Monday February 14, News Media Canada chair Jamie Irving and president and CEO Paul Deegan appeared before the House of Commons Standing Committee on Finance to as part of the federal government’s pre-budget consultations.
Below is a copy of their statement to the committee:
On behalf of News Media Canada, our member publishers, and the 3000 journalists we employ, who inform Canadians across the country every day, we are pleased to participate in the Pre-Budget Consultations in advance of the 2022 Budget.
Canada’s news publishers are facing an existential threat, with Google and Facebook now taking about 90 percent of online ad revenues.
To put this in context, after peaking at $4.6 billion in 2008, Canadian newspaper revenues have fallen off a cliff, and now stand below $1.5 billion. During that same period, Google and Facebook have seen their combined Canadian revenue grow from a little over a billion dollars to over $8 billion.
And there is a direct link between the decline in newspaper ad revenue and Google and Facebook exerting a firm grip on the online advertising system – a system where these monopolies have their thumb on the scale. According to a group of state attorneys general, led by Texas, the CEOs of Google and Facebook personally oversaw an illegal 2018 deal that advantaged them in ad auctions.
These behemoths enjoy all of the benefits of being a publisher – without any of the obligations. They spread a few crumbs around, but they don’t employ a single journalist in Canada.
Since 2013, we have lost 300 trusted news titles in Canada. And COVID has made this secular decline even worse. Ad revenue was down about 35 percent in 2020 and more than 40 newspapers closed permanently since the start of the pandemic. As titles disappear, news deserts are created.
Across Canadian journalism, 1,300 jobs have been cut permanently since the beginning of the pandemic.
There is no one silver bullet to solve this problem, but there is one important step that you as parliamentarians can take, right now, to stop the bleeding and put us on a more stable commercial footing.
During the 2021 federal election campaign, the Prime Minister made a commitment to “introduce legislation, within 100 days, that would require digital platforms that generate revenues from the publication of news content to share a portion of their revenues with Canadian news outlets. This legislation would be based on the Australian model and level the playing field between global platforms and Canadian news outlets.”
Since 2013, we have lost 300 trusted news titles in Canada. And COVID has made this secular decline even worse. Ad revenue was down about 35 percent in 2020 and more than 40 newspapers closed permanently since the start of the pandemic.
The Australian model is simple, and it doesn’t involve taxpayer money. It allows news publishers to negotiate collectively with the Big Tech platforms and services to receive reasonable compensation for the content our Canadian journalists produce. If negotiations don’t lead to a fair settlement, it goes to baseball-style final offer arbitration.
The initial reaction from Google was to threaten that it would stop making Google Search available in Australia. Meta actually restricted people and news organizations from posting, sharing, or viewing news content on Facebook.
Australian Prime Minister Scott Morrison fired back, “We will not be intimidated by Big Tech seeking to pressure our Parliament as it votes on our important News Media Bargaining Code. Facebook’s actions to unfriend Australia today, cutting off essential information services on health and emergency services, were as arrogant as they were disappointing.”
The Australian Code is in place, and it is working for publishers large and small:
- So far, more than 30 agreements have been reached, including Country Press Australia, which represents about 180 smaller independent and regional titles.
- Public reports suggest that, in total, these deals with Google and Meta total several hundreds of millions of dollars per annum.
We expect our government to introduce similar legislation very soon. With all political parties in agreement on the overall direction, we are asking you to work with your colleagues to ensure it receives Royal Assent by the end of June.