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November 14, 2022updated 24 Jan 2023 1:17pm

Facebook, Google and the Canadian government must set funding transparency standards for news

By Heidi Legg

Canada stands poised to become the second country after Australia to pass legislation – known as the Online News Act of C-18 – that will force Google and Facebook to pay for news. Here,  Heidi Legg, a Canadian-American who leads the research for the Future of Media Project at Harvard University, sets out why she believes transparency should be at the heart of Ottawa’s legislation.

As we watched the decimation of newsrooms across the world with the rise of search and social media, significant funding for most of Canada’s news outlets now comes from political entities and global giants – namely Google, Facebook, and the Canadian government itself.

This poses a significant problem and possible breach of ethics: How do we entrust newsrooms to hold these three heavyweights, that permeate our lives, accountable?

As foreign funding pours in, why expect new digital news outlets like Post Millennial, National Observer and Rebel News to be transparent about funders, if the three most influential forces in our daily lives are not?

The Canadian government needs to set the precedence and then enforce platforms to reveal their full giving, as they move to pass Bill C-18.

It was revealed by Ben Smith, formerly media columnist at the New York Times and now co-founder of Semafor, that Meta (AKA Facebook News Tab) had been paying the Times “$21m in pure revenue through a licensing deal that did not succeed in buying the tech giant any goodwill. (The Wall Street Journal will lose a deal worth $18.5 million annually, the Washington Post $14 million, according to a person familiar with the numbers).”

While Google, Facebook, and the government currently fund the Canadian media system, we have no clue whether it is random or fair. With all these NDAs, Canadians have are unable to measure who has major influence in the news ecosystem. That matters.

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Trust in journalism is at an all-time low, and a lack of funding transparency further feeds disengagement.

A robust and independent press is vital to democracy. Without shared facts, it is hard to govern.

In 2019, the Canadian government tried to correct this inherent imbalance between newsrooms and platforms, who hoard the ad dollars, with a $595m news media bailout in 2019 to help stop the bleeding. It also created the Qualified Canadian Journalism Organizations (QCJO) designation to receive payroll subsidies and tax breaks. But who and how much is granted is cloaked in mystery. The QCJO board argues that newsrooms applying for the status share all their financial details with Revenue Canada, and this is private. That should not preclude us all from knowing who and how much they fund.

Around the same time as the blood bath for decimation became apparent, Google launched its Google News Showcase to spend $1 billion globally to pay publishers. But each outlet must sign an NDA.

The list of Canadian news outlets funded by Google continues to grow. I understand why they take it. I just don’t understand why there is no governance around it so they we know how much.

Earlier this year, I indexed Canadian media ownership. A clear red flag emerged: Many private news organizations do not disclose, in real-time or ever, who funds, majority owns, or invests in the media company. Everyone from Post Millennial to The Logic, to Glacier out west hold back some funder intel. This is a problem. Media accountability starts with knowing who to hold to account.

The Canadian Periodical Fund has long doled out grants to various media newsrooms considered magazines but that funding is also questionable: Hockey News, Zoomer Media, and Maclean’s, each receive well over a million dollars per year and Les Affaires and Toronto Life, over $500,000.

Is there a formula for the $157,784 to Vancouver’s Modern Dog or the $253,594 to Canadian National Observer? Or how about $254,000 to the Narwhal, a digital nonprofit startup that was the first to be given Registered Journalism Organization (RJO) status that now allows foreign funding and aligns with the Liberals climate advocacy? Is funding at the whim of who is in power? It also begs the question… is anyone making actual independent revenue?

Which leads us to Bill C-18. Canada’s leading news outlets stepped up lobbying to urge Bill C-18, currently in its second reading in the House, to press Ottawa to impose a formula for fair payments for news from platforms. Like Australia’s code, it allows for “collective bargaining” by news organisations with the platforms. Bill C-18 has real promise for journalism in Canada.

We have deviated so far from the age where you could open the paper and see who was paying to keep the lights on. Today, people have no clue.

I believe this lends to the loss of trust. The irony is palpable. The one industry with a mission to hold power to account is restrained under NDAs. While some may not love that Bell, Rogers or the wealthiest families in Canada own the nation’s major press­­ – at least you know who to hold to account and that they are Canadians who care about their country.

I worry deeply when media funding becomes untraceable, hard to grasp, tech-heavy and foreign. Remember the Go Fund me for the Trucker protests?

As Canada looks to pass the bill, add a requirement for payment transparency and rule that a certain per cent goes to journalists’ salaries. The Canadian government must also reveal who and how much they fund in news. How else can we trust the system?

The current setup is strangling accountability and trust. It is way overdue to regulate Facebook and Google to pay for news. If Canada leads with Bill C-18, the whole world will seek to adopt it and give journalism a fighting chance. That is why the platforms are so desperate to stop it. We need radical funding transparency, and we need formulas. Otherwise, money will pour in from more anonymous sources in undisclosed amounts.

The fox guarding the henhouse never ends well.

An American-Canadian journalist, Heidi Legg has written extensively about the media landscape: The Fight Against Disinformation in AmericaA Landscape Study of Emerging US Models in Local News and a sweeping paper about Preserving America’s Thought Leader Magazines and How Trust Intersects With Subscription

Picture: REUTERS/Kevin Light

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