Google and Facebook could foot the bill for 30 per cent of the cost of creating news in Canada under the Liberal government’s legislation, the Parliamentary Budget Officer said in a new report Thursday.
“We expect news businesses to receive from digital platforms a total compensation of $329.2 million per annum” under Bill C-18, the PBO estimated.
Google and Facebook have both pushed back against the legislation, which is supported by many large, mainstream news organizations, including Postmedia, publisher of the National Post.
“This estimate appears to be grounded in a set of assumptions and talking points, with no basis in the legislation itself, the facts of the news industry, the realities of digital advertising or our current value exchange with news publishers,” Shay Purdy, a spokesperson for Google, said in an emailed statement.
Paul Deegan, president of the publishers’ association News Media Canada, said in an email a “third of newsroom editorial expenses sounds like a figure that is fair to both platforms and publishers.”
He said newsrooms depending on Google and Facebook for that money wouldn’t compromise journalistic independence.
“A good number of larger Canadian news publishers have been able to negotiate content licensing agreements in the past 18 months, and there has been no compromise on coverage,” Deegan said. “Publishers don’t bow to advertisers and they won’t bow to platforms.”
Marla Boltman, executive director of advocacy group Friends, said in a statement that “as misinformation continues to run rampant and erode public trust, this much-needed cash injection into our collapsing news sector couldn’t come at a better time.”
“If Google and Facebook want to continue to make billions in ad revenues off the backs of Canadian made news content, it’s time they start paying for it,” Boltman said.
The PBO said it expects news organizations to spend “about $20.8 million in transaction and compliance costs for negotiating their first deals.” The cost of implementing the bill would be $5.6 million per year over five years, but the government expects the CRTC to implement a cost recovery process that would fund the program after the $8.5 million allocated in this year’s budget runs out.
The PBO said it expects “it would be more expensive for smaller businesses to negotiate and comply with the legislation because most would need to hire external expertise, while for large companies, internal capacity likely already exists.”
A coalition of more than 100 smaller news outlets has expressed concerns about the legislation and proposed a number of changes, such as a transparent, universal funding formula.