Bill C-18, also known the Online News Act, is intended to support Canadian digital news sources by forcing large tech companies – namely, Google and Meta – to fairly compensate outlets for the ad revenue they generate through online news. The bill is now being debated in the Senate and is expected to be passed into law by the end of this month, although it may not come into effect until September.

The need for some kind of regulation to help news outlets in Canada is clear. In a round up of Bill C-18 he released in March, Brian Cuddy, SVP of responsible media solutions at Cossette Media, wrote that since 2012, Canada’s ad industry has grown from $10 billion to $12 billion annually, but newspapers had decreased from a $3 billion industry to struggling to stay afloat in a digital-first era.

“At the same time, as digital media has grown to over a $7 billion industry, we have seen $0.60 on every advertising dollar in Canada go to either Facebook or Google,” Cuddy says. “Despite the technology and data opportunity these companies offer, we still find less than 20% of industry investment ending up in Canadian pockets.”

In addition, Cuddy points to CMDC data that says, since the beginning of the COVID-19 pandemic, 53 Canadian news media publications have closed, 48 of which were community newspapers. Between the beginning of 2008 and April 2021, 448 news operations closed in 323 communities and more than 3,000 journalists have lost their jobs.

Sarah Thompson, president of Dentsu Media Canada, says her agency is fully supportive of both the legislation and the CMDC’s Media Manifesto, which calls for intentional advertising investment in quality journalism and local media across the country.

“The bill is designed to enhance fairness in the Canadian digital news marketplace and contribute to sustainability,” says Thompson. “That is something that we can completely get behind.”

The critical issue, though, is the potential for both Google and Meta to pull news from their platforms as a result of the bill. It would be difficult for Canadian legislators to directly regulate the companies’ ad systems, so it instead focuses on “tech giants” that distribute links to news content. This does, however, mean that the companies could step out of the act’s reach if they were to stop sharing news content on their platforms, something both companies have been testing.

Thompson says now is the time for marketers to consider the ramifications of this. Blocking access to credible Canadian news sources by companies like Meta will create a vacuum ready to be filled by misinformation and fake news, which could create an environment that puts brand safety at risk. It would also remove a key support for the distribution of content, a service the tech companies have widely touted in their opposition to the bill.

“This is an empowering moment in time for marketers to give very close attention to the outcome of what it means for their brands, what it means for society at large, and what it means to have control of how information is distributed,” Thompson says. “All of these should be topics of conversation if we’re leaning towards being responsible advertisers.” 

Even among those supportive of the aims of the bill, reactions to the bill have still been mixed. Aside from the methods with which it plans to regulate “tech giants,” industry leaders – in consultations, committee hearings and media appearances – have called for more transparency and equity in the bill, amid concerns that C-18 could be more beneficial to legacy media organizations that have the ability to strike deals with platforms outside terms of the bill (and which would no longer fall under its disclosure agreements), leaving small community newsrooms at a continued disadvantage. There have also been calls for better ease of implementation to prevent abuse and negative incentives for clickbait.

“As an industry, we have an opportunity and an ethical responsibility to invest our dollars in a way that sustains and strengthens our media ecosystem,” says Cuddy. “I agree that more can be done and am supportive of C-18 in principle, but I also understand some of the criticism in the mechanisms of the bill. It is important that its implementation creates an equitable outcome for all.”

Cuddy agrees the bill is flawed with questions around transparency, how the bill will come into execution, how the revenue is distributed and how individual news organizations are determined to be compensated. “It’s really important we get this right because it’s the opportunity to incentivize innovation, great work, and for Canadians to get access to critical news content. It’s also an important consideration for advertisers and the general brand safety of the environments their ads are appearing within.”

Ensuring that advertisers have access to trusted local news gives brands opportunities to drive their business and connect with local communities and real people, says Cuddy. “These platforms have become the arteries to which many Canadians access news. Restricting access to news for Canadians is a dangerous response – one Canadian advertisers shouldn’t tolerate.”

That said, he points out that Facebook and Google have introduced initiatives to mitigate the impact. Those include the Google News Showcase, powered by a $1 billion investment in news organizations globally and licensing agreements with over 150 Canadian publications. Facebook has invested $1 million in grants for local news and $1 million for fact-checking organizations, a $1 million donation to the International Fact-Checking Network and $300 million to news programs and partnerships.