It’s not often that the prime minister of Canada gets his lunch handed to him by a small-town journalist, but that’s exactly what happened last week in Sault Ste. Marie, Ontario, where Justin Trudeau sat down for an interview with Village Media Editor-in-Chief Michael Friscolanti. Trudeau’s visit to the Soo was to launch the country’s first “smart grid” green energy system, but Friscolanti also had questions to ask about other pressing local issues, like events at major employer Algoma Steel and the opioid crisis that plagues even this remote community of 70,000. Like any good reporter, however, he saved his toughest question for last, then gave his subject just enough rope to hang himself. It was about the Online News Act, which the government passed in June, prompting Facebook to quickly block news content across Canada rather than pay tens of millions for linking to it. It was a subject near and dear to both Friscolanti and Sault Ste. Marie, since it is home to Village Media, the country’s largest online news publisher with outlets dotted across the province. Friscolanti asked Trudeau if passing the Online News Act was the right move.
The prime minister answered that it was, because Google and Facebook had for years been making “massive amounts of money” off the work that journalists like Friscolanti do covering local issues. “Anytime someone shares a relevant local story, Google or Facebook, depending on where they share it, makes the ad profit off of that, which doesn’t go into your pocket.” The only problem with Trudeau’s explanation was that it was false, and Friscolanti knew it. Anyone clicking on a link to a news story posted on Google or Facebook would be sent straight to the publication’s website, where they would be exposed to its ads. They might even take out an online subscription to read more than just a few free articles a month. Google and Facebook actually did publishers a big favour by sending them readers, and small publishers like Village Media are suffering now without some of that traffic. If Google also stops running links to news stories when the Online News Act comes into force next month, it could cut traffic to Village Media websites by half, according to CEO Jeff Elgie. “This has been a bad bill from the start,” he wrote in an update to employees after the Online News Act was passed in June. “It was based on bad messaging created by others in the industry.” Recent revelations show that Elgie and other online publishers warned the government what might happen.
Friscolanti had caught the prime minister in a lie, and he didn’t hesitate. “I think we’ve learned the opposite is true: that we depended on Facebook and Google to help share our stories,” he told Trudeau. “There was value in that for us. Whereas some news organizations might have said what you’re saying is accurate, we believe the opposite. We were in partnership with Google and Facebook, they helped us, and now without them we’re hanging by a thread, Prime Minister.”
Trudeau might be forgiven for misunderstanding how online publishing works. More likely, as Friscolanti mentioned, he might have been led astray by what some news organizations had been telling him. As Elgie pointed out, there has been a lot of “bad messaging” coming from the industry. That would be the newspaper lobby assembled by former Postmedia Network CEO Paul Godfrey, which pushed first for the $595-million bailout that Trudeau’s government handed them in 2019, then for the Online News Act. The bailout, as I show in my book The Postmedia Effect, has most of all enriched the US hedge funds that somehow own 98 percent of Canada’s largest newspaper chain despite our supposed 25 percent limit on foreign ownership. They have taken about $500 million out of the company in payments on its massive debt, most of which they also hold, since taking it over in 2010. Now the country’s second-largest newspaper chain, Torstar, has also been taken over by high-finance wizards who are picking it clean with similar questionable tactics. That’s what is killing news media in Canada, not Google and Facebook.
There was a grain of truth in what Trudeau said. Google and Facebook do sell ads. That’s how they make such massive amounts of money because they do it so well by matching computer users precisely to advertisers with the mountains of data they have accumulated on all of us. Newspapers can’t compete with that, and now most of the advertising, which used to go to them, is going to Google and Facebook. Many newspapers actually pay Google a commission to sell ads on their websites because it finds them the most suitable eyeballs. Truth be told, however, Google in particular has been criticized, investigated and is even now on trial for some of the questionable tactics it uses in the automated instantaneous online auctions for the ads that appear on your screen.
But the messaging coming from both industry and government on the Online News Act has been troubling because much of it has been misinformation, which is simply mistaken, and disinformation, which is deliberately false. First it was that Google and Facebook were stealing news stories from publishers just by carrying links to them, which hardly anyone believes any more. Now, according to Trudeau, they’re stealing ads.
Pascale St-Onge, Trudeau’s latest pick for Heritage Minister, has been even more economical with the truth since being handed the hot-seat portfolio in July. First she pledged to stand firm on the Online News Act because “Canadians expect tech giants to pay their fair share,” which at least ran contrary to polling that showed twice as many Canadians wanted the government to be flexible than urged it to stand firm. She then tweeted in August that the Online News Act would ensure that smaller, local news organizations could bargain with the tech platforms and be fairly compensated for their work.
The sad reality is that the government’s own estimates show that most of the proceeds of the act, if Google and Facebook were to play along, would go to Big Media in Canada, mostly broadcasters including the government-funded CBC. An even sadder reality is that many smaller, local news organizations already have content licensing agreements with Google and Facebook, which they will likely now lose. According to University of Ottawa law professor Michael Geist, St-Onge is now similarly rewriting history with respect to the Online Streaming Act.
This all shows a clear pattern of prevarication which suggests that the Trudeau government listens only to powerful lobby groups and believes whatever they say, then pushes through legislation which it tries to then sell to the public through its messaging apparatus. When it comes to lies, however, Canadians won’t be buying it.
Marc Edge is a journalism researcher and author who lives in Ladysmith, BC. His books and articles can be found online at www.marcedge.com.