CBC to Gain Majority Funding from Online News Act: Experts

The Canadian Broadcasting Corporation (CBC) is set to reap the lion’s share of the forecasted $172 million in funds from the federal Online News Act, say industry experts. This raises concerns that the newly legislated move could sideline smaller publishers, further elevating the CBC’s dominance in Canadian news, reports the Globe and Mail.

Bill C-18, known as the Online News Act, got its royal assent in June and is set for implementation in December. The act intends to have major tech giants pay Canadian news organizations for sharing or linking their content. A look at draft regulations published recently indicates that compensations would be aligned with the number of full-time journalists a news outlet employs.

Peter Menzies, former vice-chair of the Canadian Radio-television and Telecommunications Commission (CRTC) – the federal body set to oversee the Online News Act – foresees the CBC, as Canada’s most significant employer of journalists, bagging the bulk of this funding. He expressed concerns about how this might perpetuate the CBC’s dominant stance, allowing it to employ even more journalists and in turn, attract more funding in the years ahead. “I’m a big fan of having a public broadcaster, but not a large commercial competitor eating everybody else’s lunch,” Menzies remarked.

The 2021-22 fiscal year saw CBC seeing $1.2 billion in governmental funding, slightly down from the $1.39 billion the previous year. Former journalist and current MP, Kevin Waugh, echoed Menzies’ concerns. “CBC from day one should have been excluded from funds from C-18,” he said.

Michael Geist, a research chair at the University of Ottawa, opined that the compensation system’s design inherently favours the CBC, sidelining independent outlets, especially those relying on freelancers or community content. The federal Heritage Department, however, has argued that smaller outlets will indeed benefit and will gain a collective bargaining edge under the new legislation.

Google, under the draft regulations, might be compelled to channel approximately $172 million annually into Canada’s news sector. Should Google fail to finalize compensation deals with diverse news groups, including Indigenous and French-language outlets, it risks being subject to mandatory arbitration and bargaining steered by the CRTC.

CBC spokesperson, Leon Mar, said the broadcaster is currently examining the regulations. He expressed belief in the act, stating it will bolster the sustainability of news organizations and ensure fair compensation, especially when the lion’s share of digital ad revenues currently flow to tech giants like Facebook and Google.

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