Hon. Paula Simons: Honourable senators, on January 12, Postmedia, the country’s largest newspaper chain, released its first-quarter fiscal update. The quarter begins in September and ends November 30, and it has traditionally been the most lucrative one for Canadian newspapers since it includes the back‑to-school period, Black Friday and the run-up to Christmas. But, this quarter, Postmedia’s numbers were bleak — a net loss of $15.9 million.

Twelve days later, the other shoe dropped. The company announced that it would be laying off 11% of its editorial staff across the chain. That means paring already gutted newsrooms right down to the bare bones.

Those cuts weren’t the only blow. Staff at the biggest Prairie newspapers — the Edmonton Journal and the Edmonton Sun; the Calgary Herald and the Calgary Sun; and the Saskatoon Star Phoenix and the Regina Leader-Post — were told that they would never come back to their once-vibrant newsrooms again. The newsrooms have closed. The few staff remaining will work from home, as they have been since the start of the pandemic.

The Calgary Herald building, a hilltop landmark, has been sold to U-Haul. It’s almost too on the nose to be real. The Saskatoon and Regina buildings are also for sale.

Now, Postmedia has a complicated lease agreement, which means it can’t divest itself of its Edmonton site so easily. For now, the elegant five-storey building, which sits on one of downtown Edmonton’s most historic corners, stands empty and abandoned — a ghostly reminder of the days when newspapers were powerful forces for community and democratic good.

Of course, it’s not only Prairie papers that are in trouble. Postmedia papers in St. Thomas, Sarnia and Owen Sound, Ontario, are now publishing only three days a week. And just this week came the parallel announcement that New Brunswick’s major papers — the Telegraph-Journal, Moncton’s Times & Transcript and Fredericton’s Daily Gleaner — would be daily no more, publishing only thrice weekly.

These papers — like so many across the world — have had their economic model derailed by digital disruption. Their advertisers, large and small, have moved to online sites, such as Craigslist, Kijiji, Autotrader, Instagram, TikTok, Twitter, Google and Facebook. Their subscribers have stopped paying — either because they were happy to get their news for free online, or because they could no longer see the value in paying more and more for papers that were shrinking and shrinking each passing year. More than that, local newspapers are facing fierce online competition for their readers’ attention. Once upon a time, papers had regional monopolies — not just on advertising, but on our time and our interest.

Today, Canadians can access the news of the world in real time, whether their tastes run to The Guardian, Le Monde and The Washington Post, or to Fox News and the Daily Mail. Whatever your taste, there’s a news site for you. You are no longer limited to getting your news from your daily paper, your hometown radio station or your local supper-hour TV newscast.

Meanwhile, new digital competitors are popping up across the country trying to serve readers who are interested in specific topics or specific points of view. Many of these publish award‑winning journalism about the climate — about Parliament, about social and technological issues — but they have a reach and an ecumenicism that they cannot match that of the broadsheet daily paper.

In some ways, Canadians have never had as many options to be informed. Information from around the world is literally at our fingertips. But, in other ways, we have never known less about what is going on in our own cities and towns without local reporters to cover city council and school board meetings, without local investigative journalists digging into local scandals, without local feature writers telling local stories.

And so now we have before us Bill C-18, which is designed to throw a lifeline to struggling news sites, large and small, all across the country. The premise is deceptively, intoxicatingly simple. Google and Facebook have lots of money. As Senator Miville-Dechêne has told us, they have pockets full of it. They dominate the Canadian advertising economy. The government estimates that those two companies alone command 80% of Canada’s advertising market, and they surely share links to Canadian news sites — links they don’t pay for. So why not ask them to pony up to support the newspapers, newscasts and news sites because advertising revenues have evaporated?

The bill requires Facebook and Google to enter into negotiations with news organizations: from the very largest, to tiny papers with owner operators, to Indigenous and campus radio stations. If they can reach private agreements, they will be exempted from the bill’s provisions. But if those exemptions are not granted, companies will be required to enter into binding, final offer arbitration.

It’s a tempting proposition, especially when promises are being thrown about that Bill C-18 will force Google and Facebook to pay for 20 to 30, even — as Senator Harder suggested this week; the first I have heard that number — a full 35% of the operating costs of Canadian newsrooms. The Parliamentary Budget Officer, perhaps more modestly, has estimated that the program should bring in about $329.2 million a year.

But the idea that we can or should force two American tech giants to underwrite the independent news upon which Canadians rely is a logical and ethical fallacy. The bill seems premised on a core proposition that the reason print media outlets have lost their revenues is that Google and Facebook are somehow stealing news stories and then monetizing them to sell ads, but this is a fundamental misunderstanding of how digital advertising markets work.

Facebook’s algorithm privileges content that generates engagement, and a story about the Kamloops school board or a Senate debate isn’t sexy or juicy enough to do the job. Sadly, yes. A 2021 study for Nieman Lab found that less than 4% of posts viewed in the Facebook news feed actually linked to news stories, and since then Facebook — pivoting to video to fend off the challenge of TikTok — has retooled its algorithm to show people even less news.

Jean-Hugues Roy, Professor of Journalism and Media Economics at Université du Québec à Montréal, estimates that Facebook made $198.8 million in revenues stemming from Canadian journalistic content in 2022, but that was actually down from $210 million in 2021.

Professor Roy posits that, of that sum, about $99.4 million could be shared with the Canadian news industry. But even that rather rosy estimate will be far from enough to subsidize the costs of newsrooms across the country — and especially not if that sum keeps declining.

For its part, Google doesn’t post ads on its news site at all. Google News makes no money. It’s really there as a loss leader to keep people on the site longer.

It’s not that Google and Facebook benefit hugely from sharing news: They get little or no direct economic benefit from sharing news content.

Google and Facebook are advertising behemoths who dominate the internet and the advertising market with an unrivalled and unprecedented power. According to the Transnational Institute, in 2021 Google was the most visited website in the world, with monthly traffic of 92.5 billion visits. YouTube, which is owned by Google, is the second most visited site, with 34.6 billion monthly visits. Facebook comes third, with 25.5 billion visitors a month.

The only Canadian website that ranks in the top 20? Pornhub, with 3.3 billion visitors a month, gives them the peculiar distinction of attracting more views than Reddit or Bing.

Yes, Google and Facebook have a stranglehold on eyeballs and advertisers. I’m not asking for you to sympathize with them. I’m just asking whether it’s sensible to demand that they underwrite Canadian newspapers, magazines, broadcasters and news sites, including tiny websites whose work is almost never shared or indexed on those social media platforms at all.

More than that, I’m asking if it’s wise. How independent can the Canadian news media be if they are so deeply beholden to the goodwill and future economic success of two foreign corporations?

Back in June 2021 when we were debating Senator Carignan’s Bill S-225, a bill with parallels to Bill C-18, our Transportation and Communications Committee heard from the witness Edward Greenspon, the former editor-in-chief of The Globe and Mail, who was by then the President and CEO of the Public Policy Forum.

Here’s what Mr. Greenspon told us in 2021:

. . . inviting the platforms to negotiate deals with individual publishers can badly distort the information marketplace. People have expressed concerns for decades that advertisers influence news agendas. In fact, it was rare to find an advertiser that had enough of a market share, more than 1% or 2% of a publisher’s total revenues, to do so. In contrast, I can well imagine a platform accounting for 10% or more of a news organization’s revenue under this system. They have massive public policy agendas of their own, including tax policy, regulatory oversight, data, et cetera.

He went on to warn us, “You are here to strengthen the independent press, not to create new dependencies.”

We should heed his advice now. With Bill C-18 we are creating an even greater economic dependence and giving Google and Facebook even more power than they already have over what we read and what we see — and, indeed, what we think.

The mechanisms proposed in Bill C-18 render us even more vulnerable to their corporate decisions, decisions over which Canadians will have absolutely no control.

As we watch the slow-motion meltdown of Twitter, accelerated this week, it seems to me naive — nay, foolhardy — to assume that Google and Facebook will be golden geese whose golden eggs can sustain our free press in perpetuity. If and when Google and Facebook are no longer cool or fashionable or trustworthy, where will that leave us?

I have many other questions about the bill as we move toward committee study. Realistically, how much will small, rural and ethnocultural or Indigenous papers and radio stations actually benefit from this program even if they negotiate collectively? How much should we want to subsidize large players such as Rogers or Bell Media or failing legacy firms like Postmedia, especially if that makes it harder for innovative start-ups to compete with them?

What guarantees do we have that companies will spend their subsidies to increase news coverage as a net increase as opposed to paying down debt or rewarding their executives? Is it reasonable, as the Parliamentary Budget Officer estimated, for CBC and Radio-Canada — already funded by the government — to receive, by far, the largest share of this new money? What will be the impact on our respect for copyright law and the principles of fair use and to our obligation under the Berne Convention, given Bill C-18’s somewhat cavalier hand waving away of traditional copyright protocols?

And are we comfortable giving unprecedented new regulatory powers to the CRTC to intervene in the business of print journalism and to require mandatory media codes of ethics, given the free press has never before been subject in any way to the authority of the CRTC?

My friends, I was a professional journalist in this country for 30 years. I believe that responsible journalism is essential to the health of a civil society. It’s easy to look at the crisis in Canadian journalism and exclaim, “Something must be done!”

Well, this is something, but what will it actually do? Not, I fear, what we would like.

Thank you, hiy hiy.