Tech giant battle means doom for small news outlets, Trudeau was warned

OTTAWA, Ont. — Prime Minister Justin Trudeau's lifeline for Canada’s struggling media industry could instead spell disaster, digital start-ups and freelancers warned his office as it was doubling down on the Online News Act.

Documents obtained by POLITICO through an Access-to-Information request reveal urgent appeals from freelancers and small news outlets who spelled out for top officials what would happen if they lost access to sharing news through both Google and Meta.

“Between Google and Meta announcing their intention to exit news, we now expect a catastrophic 60 percent reduction in traffic,” ZoomerMedia’s chief operating officer Omri Tintpulver wrote to the prime minister’s office and heritage officials. “Jobs are going to be lost. Soon. Entire divisions may also be lost.”

Zoomer Media reaches upwards of 10 million Canadians a month through its digital platforms that include blogTO and the Daily Hive, and holds conventional broadcast platforms as well, such as Vision TV and a few radio stations.

It asked Ottawa to redirect the money from the government’s halted marketing ad buys with Meta and Google toward publishers feeling the pinch.

As the clock ticks down to Dec. 19, the tripwire deadline that will spring the Liberal government’s Online News Act to life and prompt Google to follow in Meta’s footsteps by ending news sharing in Canada, a fuller picture has emerged of the behind-the-scenes jostling and dire warnings made by smaller players.

— Multiple warnings: During a more recent public consultation, Zoomer warned that “without a defined cap on liability, there's a looming threat of Google withdrawing from Canadian news, which would be catastrophic for digital-first news entities.”

Back in June, Village Media’s CEO Jeff Elgie warned the prime minister in a letter that losing both Facebook and Google news will “most certainly devastate what has otherwise been a thriving ‘new’ media sector.”

“The impact of an exit from just Facebook alone will likely result in the shutdown of 5 to 6 of our newer community news sites (which rely on audience developed using Facebook to develop to maturity), and the termination of roughly 30 jobs across our company.”

Village Media, a digital-only local news publisher operating in 21 communities in Ontario, warned that if the government does not get back to the table with Meta and assuage Google’s concerns, “there may not be a digital publishing sector left.”

Narcity Media Inc. told Ottawa during public consultations it lost 30 percent of its overall traffic since mid-August and took a 15 percent hit to revenue from branded content and advertising.

“This decline compelled us to lay off over 16 invaluable members of our social and journalist teams, a move that resonated negatively through our corporate structure and the larger community we serve,” it said.

Erin Millar, CEO of Indiegraf, a network of more than 100 small news organizations and startups, warned the PMO in a letter that the legislation could cause an “existential event” for many local newsrooms.

“Removing Canadian news content from these platforms will raise the barrier to entry for start-ups and chill news innovation, development and investment. It will harm small and Indigenous news businesses, and distort the playing field.”

— Smaller the player, the bigger the pain: Canadian illustrator Chelsea O'Byrne warned the Prime Minister’s Office in mid-July that her career hinges on contract work with such media companies as The Globe and Mail. She said she gains clients when her illustrations are shared through mainstream media over social media.

“Bill C-18 suggests that our government leaders are deeply unaware of the role that social media plays in today's freelance economy,” she said. “This bill is going to make it virtually impossible for freelancers like me to continue finding new clients while residing in Canada.”

Gabriel Ramirez, who co-founded The Bridge Canada, a small independent news outlet aimed at immigrants from Latin America, told Ottawa during a public consultation that Meta’s exit from Canadian news is “killing us.”

“Nobody is reaching or watching our videos,” she wrote in a regulatory submission to Ottawa.

Michael Kras, who writes about arts and culture for a small local start-up website in Hamilton, Ont., wrote to then Heritage Minister Pablo Rodriguez pleading for Ottawa to reach a “reasonable agreement” with Google and Meta.

“If companies like Meta make good on their promise to stop allowing news from Canadian media outlets on their platforms — as they've already started to do — this will mean the end of my job, my livelihood, and the same for countless others like me,” he said. “l’m sure you can imagine what a terrifying prospect this is for workers like me. It will simply be catastrophic for our industry.”

— Down to the wire: Heritage Minister Pascale St-Onge is staring down the clock with six weeks until the law comes fully into effect.

Google used its public regulatory submission to establish its lines in the sand. The company wants a firm liability cap and a clear number of how many news businesses the search firm would have to financially support.

It has argued for months that the law remains unworkable and the government has yet to address its biggest concerns.

But St-Onge maintains that backing down is out of the question and she still insists Ottawa and Google can reach an agreement over the fine details.

“We need to give time to certain legislative measures that were adopted last spring, which are in the implementation phase,” she told reporters in French Nov. 7, “then see the impact of these measures as well.”