Google news deals won't pre-empt bill: minister

The Liberal government will push ahead with legislation forcing Big Tech companies to compensate news outlets for content despite the expansion of voluntary agreements like Google’s News Showcase, Heritage Minister Steven Guilbeault said.

Google launched its News Showcase program in the

United Kingdom on Wednesday and six days ago in Australia — where Google has been feuding with the government over proposed compensation legislation. The program pays publishers to curate and package the stories that appear in Google’s news products. In Canada, Google has signed deals with two publishers but the company has not yet launched the program.

“If Google wants to enter into business agreements with newspapers, it's totally legitimate for them to do that and vice versa,” Guilbeault said in an interview with National Post. But those voluntary agreements are “not what we're trying to do.”

The compensation system the government wants to put in place would go beyond companies that have chosen to enter deals with tech giants, and encompass “as much of the media sector as possible.”

Guilbeault added that although some companies are partnering with News Showcase, “those same media entities are calling on me to act and table legislation.”

“They too believe we should have a robust system that is not contingent on what Google may or may not want to do,” he said.

Guilbeault added other countries where such legislation is in place or in the works are also not changing their minds about legislation.

“I was in a meeting with both the French and Australian minister … yesterday morning. Certainly in the case of France and Australia, on the media side of things, their determination to continue is unwavering, just like ours, really.”

Google announced the $1-billion-US News Showcase program in October, which in Canada includes partnerships with Narcity Media and Village Media.

Google spokesperson Lauren Skelly said in a statement that News Showcase “is not currently live in Canada,” but the company is in “active conversations with other Canadian publishers. We look forward to launching the product here soon and playing our part in helping quality journalism thrive.”

Daniel Bernhard, executive director at advocacy group Friends of Canadian Broadcasting, said in his view Google is “clearly trying to pre-empt” rules that would require them to pay “a higher, fairer price to more people.”

He noted the News Showcase program is also “predicted on content that keeps the user inside the Google ecosystem, where they can continue to generate data for Google.”

John Hinds, CEO of publisher alliance News Media Canada said his organization is advocating for legislation where the “whole industry can negotiate with the platforms on fair compensation,” something similar to the Australian model. Postmedia, which publishes the National Post, is among its members.

“What we've seen is that voluntary negotiations wherever they've happened, whether it's in Australia or in France … have essentially failed,” Hinds said. The French system was only established after the government and competition authority mandated negotiations, Hinds said.

In developing its own model for news compensation, Canada can look to two major precedents, in France and Australia. In France, the approach is based on copyright law, while Australia has proposed imposing a collective bargaining framework that would force Google and Facebook to come to an agreement with the publishers on a flat rate. Both Google and Facebook have threatened to pull some services from the Australian market if the bill becomes law.

How similar Guilbeault's promised legislation will be to either of those models is unclear. He said the government is still working on the details, but the final system will have to account for Canadian regulatory frameworks.

“No matter how appealing the French to some or the Australian to others models may seem, we have our own sets of laws, regulations, institutions, practices that are different, so we can't just import a model,” he said. The Australian system is based on a regulator that doesn't exist in Canada, while the French approach would also have to account for Canadian copyright laws and regulations, and international agreements like the USMCA, he noted.

“It has to be tailor-made for the Canadian reality.”

Guilbeault said the legislation will “definitely” arrive sometime this year, though he added he's “really pushing” to table it in the spring.

That promised legislation on news outlet compensation is only one piece of a multi-pronged plan to regulate large digital companies the government has promised to implement in the coming months. Guilbeault introduced Bill C-10 in November, which sets up the Canadian Radio-television and Telecommunications Commission to begin imposing Canadian content and contribution rules on streaming services. He has also promised to soon introduce new legislation targeting online hate speech.

The government also expects to bring in more than $4.5 billion in new taxes on web giants. It will begin imposing sales tax on foreign digital services on July 1. The Parliamentary Budget Officer estimated Wednesday that measure will bring in $1.34 billion over five years.

The fall economic statement also promised the upcoming federal budget will include a corporate tax on companies providing digital services to take effect in 2022, which it estimated will bring in $3.4 billion over five years.