Canadian publishers see traffic and revenue plunge as Meta blocks news over pay mandate

Small and mid-size publishers across Canada are suffering sharp drops in traffic and revenue as Meta has been locked in a standoff with the government over a law requiring that it pay news organizations for their content, according to a report.

Meta yanked news from Canadian publishers from Facebook and Instagram in August after Canada’s Parliament approved legislation two months prior that calls on Meta and Google to compensate domestic media outlets when they promote their news reports.

The bill — dubbed Bill C-18, or the Online News Act — isn’t set to fully take effect until Dec. 19. Meta, however, has already decided to stop sharing news from Canadian organizations rather than pay up, according to The Wall Street Journal.

“We’re literally being completely handicapped from making revenue, which was based on pushing news out on Facebook,” said Khaled Iwamura, the founder and CEO of local news site Insauga.com that serves the Toronto area.

Iwamura told The Post that up until August, when Meta started blocking its news links, 30% of Insauga.com’s traffic came from Facebook.

“Canadians can’t see any news on social media right now, including from international publications such as The New York Post,” Iwamura said.

Jeff Elgie, the chief of hyperlocal Ontario media company Village Media, said he has seen its traffic drop by about one-fifth across the company’s 24 websites since Meta’s link blocks began two months ago, according to The Journal.

A Google spokesperson confirmed to The Post that the company has yet to make any changes for Canadian users. In March, it conducted a five-week test of blocking news links, though business will run as usual until C-18 officially takes effect later this year.

“We continue to have serious concerns that the core issues ultimately may not be solvable through regulation and that legislative changes may be necessary,” a Google spokesperson said. “We have been and will remain engaged and transparent with the government about our concerns and will await the publication of final regulations.”

Elgie isn’t blaming Meta for his losses, and says it’s the Canadian government that’s at fault for not listening to Canadian news executives’ warnings that cracking down too hard on the tech companies would have grave repercussions.

“We [Village Media] never wanted this bill, nor did many other independent digital publishers,” Elgie told The Post.

“The premise of C-18 was flawed from the get-go, suggesting the platforms steal our content and give us nothing in return. This was false.”

Canadian Prime Minister Justin Trudeau has defended the government by pointing to governments in South America, Africa and Asia that have mulled passing similar legislation, according to The Journal.

“This is not an easy fight, but it’s the right fight to the end because if you don’t have quality independent journalism, then your democracy erodes,” Trudeau said.

“We’re simply asking that Meta be responsible. What they’ve chosen to do is block people from sharing articles…because they don’t want to pay for local journalists.”

Paul Deegan, the president and chief of news publisher lobby group News Media Canada, said “there is no question Meta’s ban is hurting our ability to invest in high quality journalism.”

“We believe there is a path forward that balances the needs of platforms and publishers, but mandatory bargaining and collective negotiation backed up by the teeth of final offer, baseball-style arbitration are non negotiable. That’s the only way publishers will get a fair deal that will allow us to reinvest in our newsrooms,” Deegan added in an email statement to The Post.

The Post has sought comment from Pascale St-Onge, the Canadian minister in charge of the Online News Act.

Under the new law, digital platforms must negotiate commercial deals and pay news publishers if they wish to share their news content. Should negotiations fail, the law calls for both parties to enter a binding arbitration to determine the appropriate compensation.

Canada’s government calculated that digital platforms would collectively be on the hook for coughing up $170 million to Canadian publishers for the 2023 calendar year.

Google would be responsible for roughly three-quarters of the amount, according to The Journal.

A similar groundbreaking law was first passed in Australia in 2021. In response, Facebook implemented a news ban in Australia at the time and only lifted it after the government agreed to concessions.

The compromise meant that Facebook and Google, the other main target of the law, would be unlikely to be penalized as long as they reach some deals with local media firms to pay for news. 

Representatives for Meta did not immediately respond to The Post’s request for comment.