Google Sends $100 Million to Journalism Collective in Exchange for Exemption from Canada’s Online News Act
A Key Milestone in the Federal Government’s Fight Against Tech Companies
The U.S. tech giant, Google, has sent the $100 million it agreed to pay Canadian news outlets in exchange for an exemption from the Online News Act to a journalism organization designed to distribute the funds.
Background on the Online News Act
The Online News Act is a legislation aimed at regulating how online platforms like Google and Meta treat Canadian news organizations. The act requires these companies to make significant payments to Canadian news outlets, which will be distributed by a new journalism collective.
Estimating Eligible Publishers’ Funding
Industry group News Media Canada estimates that publishers will receive between $18,000 and $20,000 per journalist based on their interpretation of the Online News Act. However, the collective has estimated eligible publishers will receive about $13,798 per full-time equivalent journalist employed based on a 2,000-hour year.
Verification Process for Funding Distribution
The collective’s board has contracted an accounting firm to develop a verification process and internal controls to ensure that the funding is distributed fairly among eligible news organizations. However, the exact timeline for this process is still unclear.
Media Organizations’ Plans for the Funding
Despite not having the money in hand yet, some media organizations have already made plans for the funding. For example, CBC News announced that it would use the money to add up to 25 journalists in more than a dozen communities ‘that are underserved by broadcast news outlets, with a focus on Western Canada.’
The Federal Government’s Motivation
The federal government previously said it pursued the Online News Act because Google and Meta have a combined 80 per cent share of the $14 billion online ad revenues seen in the country in 2022. Ottawa also said news outlets have seen their advertising revenues shrink, forcing layoffs, a loss of media coverage in small and rural communities and 474 closures of Canadian news businesses between 2008 and 2023.
Timeline for Funding Distribution
The collective has estimated eligible news businesses will receive a higher amount per claimed hour if some claimants are deemed ineligible during verification. The exact timeline for this process is still unclear, but the collective’s board has contracted an accounting firm to develop a verification process and internal controls.
Breakdown of Funding Allocation
Based on documents released by the collective last November, public broadcaster CBC/Radio-Canada will receive about seven per cent of the $100 million, less administration costs. Thirty per cent of the funding will go to broadcasters, while another 63 per cent will go to publishers.
Industry Response
News Media Canada’s chief executive, Paul Deegan, welcomed the news, saying ‘Google cash in the kitty is a welcome development.’ However, he noted that there are still many questions to be answered about how the funding will be distributed and which organizations will be eligible for it.
Conclusion
The distribution of the $100 million by Google to the journalism collective marks an important milestone in the federal government’s efforts to regulate online platforms’ treatment of Canadian news organizations. While some media organizations have already made plans for the funding, many questions remain about how it will be distributed and which organizations will receive it.
Further Reading
