One year later, has the Online News Act actually helped the Canadian news industry?

The Online News Act aimed to help calm the financial seas for Canadian news organizations, but a year later the waters remain choppy with infighting, financial woes, and disappointment. On June 15, 2023, the House of Commons passed the Online News Act. The legislation was meant to financially support Canadian news organizations by forcing tech giants to pay for news article links posted to their platforms. The law was initially targeted at the two largest platforms in Canada, Meta and Google, who both threatened to ban Canadian news on their platforms in response.

By Aug. 1, 2023, Meta followed through and blocked Canadian news links on Facebook and Instagram — two of the largest social media platforms in Canada— to avoid the legislation’s reach. Without news links, the Online News Act does not apply to the company.

Now, a year after Meta first blocked Canadian news links and eight months after the Online News Act came into force, the landscape is nearly as difficult for news organizations as before the government’s latest attempt to support the struggling sector.

Meta’s news ban appears to only hurt Canadian news organizations, not Facebook. While the legislation is based on the premise that tech platforms benefit more than news organizations from news organizations sharing links, the opposite appears to be true. According to Meta itself, few people went to Facebook specifically for news before the ban and users are now more satisfied with the platform than before.

Research from McGill University and the University of Toronto backs this up. According to a study done six months after the news ban, the effect on Facebook of banning news has been small. Still, a total of 33% of Canadians say they still use Meta platforms for current affairs information and political engagement has remained relatively stable. Instead of posting news links users are sharing news article screenshots. As a result, the news is still being shared, just without news organizations making money from click-through page views.

News outlets appear to be the losers in the government’s gamble. National news outlets have lost approximately two-thirds of their engagement on Facebook since the news ban, while local news outlets have lost a devastating 85% of their engagement on the platform. Facebook was previously an important source of traffic as users could click-through to news articles shared on the platform.

The government’s initial estimate of $234 million in potential new revenue flowing to Canadian news organizations came crashing down to earth in December 2023 with the federal government’s deal with Google. In exchange for $100 million in annual funding to Canadian news, the federal government gave Google an exemption from of the Online News Act in the law’s regulations. With the deal, Google agreed to keep news links on its platform — saving Canadian news from the potentially disastrous consequences of being unsearchable on Google.

The calm financial sea Canadian news organizations originally forecasted has not materialized. With Meta sticking to its guns and banning Canadian news, the Online News Act is only generating the $100 million annually — from Google.

In February 2024, Bell Media partially blamed the Online News Act when it laid off hundreds of employees. The broadcast news industry will receive a maximum of $30 million from the $100 million the Online News Act generated; the remainder going to print and digital media. In the company’s 2024 annual report for shareholders, it admits the funding situation under the Online News Act remains murky.

“The amount of compensation that Bell Media may receive from Google is unclear, as is the timing of such compensation. It is also unknown whether Meta will stop blocking news links and subject themselves to the jurisdiction of the Online News Act. While Meta’s actions are having some negative impact on our news sites, the full impact that the legislative changes could have on our business and financial results is unknown at this time.”

In June, Google chose the Canadian Journalism Collective, a consortium of independent publishers, to administer the fund — to the dismay of legacy news organizations. According to CBC, the public broadcaster is capped at receiving $7 million of the funding, while other broadcasters will share $30 million and all other qualifying news outlets will share the remaining approximately $63 million.

The federal government’s plan to help stabilize the news industry’s finances may work out in the long term, but in the short term it has resulted in infighting, financial uncertainty and disappointment.

The future of the Online News Act isn’t set in stone. The legislation states in section 87 that the Minister must review its operation before the fifth anniversary of it coming into force. That means a review must be completed before December 2028, when there will have been at least one federal election and possibly a new government in power.

There is still an opportunity to chart a new course through the storm and to bring financial stability to the Canadian news industry.