It was a freezing Tuesday evening in Fergus, Ontario — around negative-6 degrees Celsius.
But the local newspaper’s publisher, Dave Adsett, stepped out of the hockey rink and braved the cold for an after-hours phone interview.
Adsett wanted to be heard clearly, as he explained the benefits of a new law requiring Google to pay for news content it benefits from in Canada.
Final details of the Online News Act were released Dec. 15, including a provision requiring roughly two-thirds of the proceeds go to written media like newspapers.
“I think it will give us a fighting chance going forward, I think it will be very helpful in terms of improving journalism,” he said.
Adsett is the second-generation publisher of the Wellington Advertiser, a family-owned weekly print and daily online newspaper.
Since July Adsett has also chaired News Media Canada, a trade group that lobbied for the news act and could potentially lead negotiations with Google in 2024.
With Google and Facebook taking an estimated 79% of digital ad dollars in Canada, it’s been tough for newspapers to survive and build sustainable businesses online.
Wanting to save journalism that’s essential to democracy, the government introduced tax credits in 2019 to help preserve newsroom jobs and passed the Online News Act in June.
“Canadian news businesses continue to produce content that attracts web traffic and adds value to digital platforms, while seeing their advertising revenues dwindle as a result of the market control exerted by large digital platforms,” a government analysis of the act said.
The act is intended “to address the growing imbalance between digital platforms and news businesses in Canada by establishing a bargaining regime to ensure news businesses are fairly compensated for the news they produce,” it said.
Details released Dec. 15 specified that broadcasters should receive at most 30% of the proceeds and the Canadian Broadcasting Corporation no more than 7%, since it’s largely government funded.
“These caps ensure an appropriate distribution between broadcasters and the written press, reflecting the latter’s high dependence on digital platforms for distribution of their news content,” an explanatory document said.
Facebook-parent Meta may be subject to the policy if it ends a news blockade it placed on its Canadian sites, to avoid paying publishers.
The policy was modeled on a policy Australia passed in 2021, leading to a revival of newsroom staffing there, and the U.S. Journalism Competition and Preservation Act that has bipartisan support but has yet to pass Congress.
Like Australia, Canada is using a carrot and stick, encouraging platforms to negotiate with publishers or face stricter regulation and arbitration.
Canada was seen as a bellwether for the progression of this approach in other democracies looking to save their news industries.
“Countries around the world are actually — and I heard this again when I was overseas — people saying, ‘Stand strong because this really matters,'” Prime Minister Justin Trudeau told a CBC host in September. “This is not an easy fight but it’s the right fight to be in.”
That fight involved threats and blockades by Google and Facebook and shifting political alliances, including a conservative bloc that initially embraced the policy then flipped to the side of tech giants.
It’s a familiar template to those following developments in Australia, Congress and California, where the Los Angeles Times reported that Google spent a record $1.5 million this year lobbying as the state considered a version of the policy. That was nearly 10 times more than Google spent during the same period, January through September, last year.
That spending included $1.2 million to fund a nonprofit group that ran ominous video ads smearing the California Journalism Preservation Act as a tax increase, the paper reported.
The two Silicon Valley companies also dilute support within the news industry by giving temporary grants to some outlets and making content deals with a few large publishers. Left behind is most of the industry, including thousands of local outlets that will never get a fair deal from the online gatekeepers unless the government intervenes.
Because those two companies have outsized influence on digital advertising and news distribution, publishers have no choice but to use their platforms, even if they’re shorted. This dependence was highlighted in Canada when some digital outlets were hobbled by Facebook’s blockade.
The pushback succeeded in softening Canada’s policy and capping Google’s yearly cash payments at $100 million Canadian, plus inflation. That’s down from $172 million expected in June and $750 million that an economist estimated the company owes news publishers.
Meanwhile Adsett watched every other community paper in his area fail, after family owners gave up and sold to chains that eventually shut them down. He said the Advertiser is the county’s last remaining community paper.
“Over the last 10 years they’ve closed, the latest one closed in the fall, the last remaining one,” he said. “So the small proprietors sold to the corporates, and then of course they did their thing and the next thing they’re gone and we’re left trying to pick up all the pieces.”
Being family-owned, the Advertiser is more willing to take a longer-term business view and less profit, and invest more in journalism.
“We’re committed to doing that, and the public I think is grateful for that, and we’re just happy to keep doing our jobs,” he said.
As competitors folded, the Advertiser added two more reporters, bringing its newsroom to seven people. Now it will be looking to add another.
“There’s no doubt,” Adsett said, “that Google money is going to add to that capability.”
Brier Dudley on Twitter: @BrierDudley is editor of The Seattle Times Save the Free Press Initiative. Its weekly newsletter: https://st.news/FreePressNewsletter. Reach him at bdudley@seattletimes.com.
