Ottawa, Google reach deal framework over Online News Act. What to know

Click to play video: 'Online News Act: Canada caps how much private broadcasters will get from Google deal'
Online News Act: Canada caps how much private broadcasters will get from Google deal
WATCH: Canada is capping how much money private broadcasters will get under a $100 million deal with Google. Heather Yourex-West explains – Dec 15, 2023

Google will pay $100 million annually to Canadian news organizations as part of a new deal struck with Ottawa over the Online News Act, Heritage Minister Pascale St-Onge says.

St-Onge said on Wednesday the tech giant’s financial support, which will be indexed to inflation, is for a wide range of news businesses across the country, including independent news organizations and those from Indigenous and official-language minority communities.

Click to play video: 'Google and Ottawa reach annual $100 million agreement over Canada’s Online News Act'
Google and Ottawa reach annual $100 million agreement over Canada’s Online News Act

Google, which is owned by parent company Alphabet, had expressed concerns to Ottawa about the Online News Act and said if they were not addressed, it would remove news links from its search engine by year’s end.

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“Google wanted certainty about the amount of compensation it would have to pay to Canadian news outlets,” St-Onge told reporters in Ottawa.

“Canada reserves the right to reopen our regulation if there are better agreements struck elsewhere in the world.”

Click to play video: 'Ottawa unveils proposed regulations for Online News Act'
Ottawa unveils proposed regulations for Online News Act

The Online News Act, which became law in June, is set to take effect Dec. 19. It will force digital giants like Google and Meta to negotiate deals with Canadian news publishers to compensate them for work that is shared or otherwise repurposed on their platforms.

Google took issue with the formula in the draft regulations that would determine whether a company contributes enough of its total estimated Canadian revenue to media outlets to qualify for an exemption from the law.

Federal officials have estimated Google would need to offer about $172 million per year to meet that threshold, while the annual price tag for Facebook would be $62 million.

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Google said that figure is much higher than the $100 million it was expecting based on a previous estimate that a senior official with the Heritage Department had given a House of Commons committee last December.

Click to play video: 'Meta to remove news from all platforms in Canada within weeks'
Meta to remove news from all platforms in Canada within weeks

St-Onge on Wednesday said Google will have the option to work with a single collective to distribute its annual $100-million contribution to all interested and eligible news businesses, based on the number of full-time equivalent journalists engaged by those businesses.

In addition to its financial contribution, Google has indicated it will continue to make programs available for Canadian news businesses, such as training, tools and resources for business development and support for non-profit journalism projects.

Ottawa said Google has provided assurances that Canadian news businesses will continue to be treated commensurately with their global counterparts.

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“If for some reason that is no longer the case, Google has agreed it will discuss the matter with both the government and the industry with a view to resolving any concerns,” the government said.

St-Onge added more details will be shared once the regulations are published ahead of the Online News Act enactment.

Kent Walker, president of global affairs at Google and Alphabet, said in a statement Wednesday Ottawa has addressed the company’s “core issues” with the Online News Act.

“While we work with the government through the exemption process based on the regulations that will be published shortly, we will continue sending valuable traffic to Canadian publishers,” he said.

Click to play video: 'Trudeau says Canada won’t be  bullied as Meta tests news blocking'
Trudeau says Canada won’t be bullied as Meta tests news blocking

Prime Minister Justin Trudeau said the Google deal will “resonate around the world.”

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“This is a deal … that is going to resonate around the world, as countries and democracies struggling with the same challenges that our media landscape in Canada is facing, are going to look at this,” he said.

“We’re very pleased we were there.”

Meanwhile Meta, the parent company of Facebook, has said the legislation is based on the false premise that it and others unfairly benefit from news content.

Meta moved to end Canadian-created news availability on its platforms in Canada. Many Canadian publishers, including Corus Entertainment – the parent company of Global News – responded by suspending advertising on Meta platforms.

“This shows that this legislation works, that it’s equitable and now it’s on Facebook to explain why they’re leaving their platform to disinformation and misinformation instead of sustaining our new system and participating in the viability of our news sector,” St-Onge said.

Click to play video: 'Discussing Bill C-18; the Online News Act'
Discussing Bill C-18; the Online News Act

St-Onge has previously said Google has kept a more open dialogue with the government.

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Paul Deegan, head of News Media Canada, a lobby group for Canada’s newspapers and magazines, said in an Oct. 12 statement it agrees with many of the issues raised by Google.

Deegan’s welcoming of Google’s concerns contrasted with his comments in February, when he accused the company of “bullying” after it carried out a short-lived test that blocked news access to a small percentage of Canadian users.

The Canadian news media landscape has changed significantly over the past decades. Publishers say advertising revenue has been eaten up by U.S. tech giants, forcing them to reduce operations in what industry watchers say will negatively impact Canadian society and democracy.

— with files from Global News’ Mackenzie Gray and The Canadian Press

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