Catching Up on MediaPolicy.ca – A news strategy for Canada – St.-Onge replaces Rodriguez at Heritage – Canada and California – Spotify’s Pitch to CRTC

July 31, 2023

The American equivalent of Canada’s Online News Act Bill C-18 has been stalled in US Congress for two years and a new Bill, the “Community News and Small Business Support Act,” has been tabled in the House of Representatives.

The C-18 type legislation, Senator Amy Klobuchar’s Journalism Competition and Preservation Act, almost made it into law last year, fell off the order table, and was relaunched in the Senate Judiciary Committee in June.

However this new House effort, goes in a different direction from C-18 styled legislation and instead is a do-over of another unsuccessful Congressional Bill from 2021 . It relies on two major tools. The first is an advertiser subsidy: small businesses would get significant reimbursements for patronizing newspapers. The second is a federal wage subsidy for journalists (sound familiar?). It is co-sponsored in the House by a Democrat and Republican.

One should never be a pessimist, but getting a Bill like that past Kevin McCarthy, Marjorie Taylor Greene, and the Republican caucus in the House seems challenging.

Bringing this back to Canada, this page noted in June that Konrad von Finckenstein and Peter Menzies have proposed a news journalism strategy. It was recently reviewed by the University of Calgary’s Gregory Taylor. Today there is a continuation of the policy discussion posted by the Institute for Research on Public Policy, co-written by Ivor Shapiro, Senior Fellow at TMU’s Centre for Free Expression, and myself.

We are hoping the discussion continues, not so much as a back and forth argument but as something more like a chain-novel.

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Another Canadian media policy in the news is our Digital Services Tax that is scheduled to be implemented at the end of the year. The three per cent corporate revenue tax on digital media companies is part of a drawn out international effort to do something about Big Tech’s notorious offshore tax avoidance.

France and the UK have already implemented their DSTs. Canada and other countries agreed not to implement their DSTs so long as the Biden White House was trying to get the aforementioned McCarthy and Greene to play ball and replace the DST with a different tax regime that sees the Californian Big Tech companies pay corporate taxes in the jurisdictions their services are used, in proportion to local consumption.

The agreed upon deadline of December 31, 2023 is approaching and the US administration got most other countries but not Canada to waive the deadline and wait to see what happens in a deadlocked US Congress in 2024, reliably reported as an election year.

When Finance Minister Chrystia Freeland said no to a Canadian extension, the US ambassador to Canada dutifully threatened trade sanctions against Canada without specifying how the DST —which the US agreed is the default to their legislative inaction—is a trade violation. Some months ago Michael Geist published a blog making the same claim about trade law by quoting chapters of the CUSMA trade deal without saying how they applied.

The Globe and Mail editorial page chimed in this past weekend saying Canada should take no legislative action against Big Tech without global co-operation because we can’t take the retaliation. In characterizing Canadian policy efforts, the Globe suggests that the Online Streaming Act Bill C-11 and the Online News Act C-18 “force tech companies to compensate Canadian media for disrupting their business models,” statements that are arguably wrong (C-18) and clearly incorrect (C-11).

Instead the Globe says we should pursue data privacy legislation (we are, it could be more ambitious) and put more teeth in our Competition Act so that our regulator is as well equipped as its American federal and state counterparts that are waging a decade-long court battle against Big Tech market power (while doing nothing in US Congress).

The Conservatives, who made the DST the centrepiece of their election policy as an alternative to Bill C-11, have no comment.

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The recent shuffle in the Trudeau cabinet resulted in Pablo Rodriguez rotated out of Heritage and replaced by Pascale St.-Onge.

The waggish Paul Wells had this to say:

Pablo Rodriguez to Transport would seem to be yet another case of ministerial burnout on all those Web Giant-Killer bills that have become the torment of a succession of Heritage ministers. Pascale St.-Onge replaces him on the censorship ‘n’ subsidies beat, ringing a new variation on the eternal question: Why do they call it Canadian Heritage if only ministers from Quebec are allowed to do the job?

The “censorship ‘n’ subsidies” tag is a bit of a giveaway Paul, but I laughed.

On the other hand, Geist had this to say: “Pascale St.-Onge, the new Heritage Minister, was a lobbyist in the culture sector before her election to the House of Commons and is likely to welcome the big tech battle.”

Well if she’s a “lobbyist” she is in good company, although in fact she was an advocate representing Québécois journalists and media workers, having worked at La Presse for fifteen years and another ten at the FNC union. That probably makes her the most policy-wise Heritage Minister to ever assume the role.

St.-Onge wasn’t in the job a day before she signalled the government is going to stay the course on C-18. The full Facebook news throttle is rumoured to take place imminently.

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The CRTC keeps posting the blizzard of legal filings in its public proceeding to implement Bill C-11. The US streamers are miffed that CRTC Chair Vicky Eatrides chose, in their view, to put the horse before the cart by starting off with a consideration of a ‘basic initial contribution’ from the streamers into the various television and radio subsidy funds that legacy broadcasters currently finance.

The streamers, surprise, don’t want to pay anything (and collectively refused to submit a proposed contribution) on the grounds that the Commission should first decide if it is going to amend the 40-year definition of a ‘Canadian’ video program. That’s because the Hollywood streamers prefer to deliver their support for Canadian programming entirely as programs available on their own platforms —preferably with new CanCon rules more favourable to them— instead of sharing part of their contribution in a common pool of subsidies.

On the music side of the industry, the Globe reported that Spotify is repeating its previous warnings to the Commission that too much regulatory interference with their distribution model in the name of discoverability of Canadian songs might turn off consumers to the point that they resort to VPNs or pirated music.

Spotify probably doesn’t have to worry. Eatrides’ public notice of consultation already grants the streamers the opportunity to self-design their efforts to promote Canadian content, see paragraphs 77-81 of the Notice.

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Here’s a recommended read, The Hub’s Sean Speer on which way the Canadian conservative movement might jump: “The conservative consensus is over. The consequences for the Canadian Right will be profound.”

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