Bill C-18: An Act respecting online communications platforms that make news content available to persons in Canada

Tabled in the House of Commons, June 21, 2022

Explanatory Note

Section 4.2 of the Department of Justice Act requires the Minister of Justice to prepare a Charter Statement for every government bill to help inform public and Parliamentary debate on government bills. One of the Minister of Justice’s most important responsibilities is to examine legislation for inconsistency with the Canadian Charter of Rights and Freedoms [“the Charter”]. By tabling a Charter Statement, the Minister is sharing some of the key considerations that informed the review of a bill for inconsistency with the Charter. A Statement identifies Charter rights and freedoms that may potentially be engaged by a bill and provides a brief explanation of the nature of any engagement, in light of the measures being proposed.

A Charter Statement also identifies potential justifications for any limits a bill may impose on Charter rights and freedoms. Section 1 of the Charter provides that rights and freedoms may be subject to reasonable limits if those limits are prescribed by law and demonstrably justified in a free and democratic society. This means that Parliament may enact laws that limit Charter rights and freedoms. The Charter will be violated only where a limit is not demonstrably justifiable in a free and democratic society.

A Charter Statement is intended to provide legal information to the public and Parliament on a bill’s potential effects on rights and freedoms that are neither trivial nor too speculative. It is not intended to be a comprehensive overview of all conceivable Charter considerations. Additional considerations relevant to the constitutionality of a bill may also arise in the course of Parliamentary study and amendment of a bill. A Statement is not a legal opinion on the constitutionality of a bill.

Charter Considerations

The Minister of Justice has examined Bill C-18, An Act respecting online communications platforms that make news content available to persons in Canada (Online News Act), for any inconsistency with the Charter pursuant to his obligation under section 4.1 of the Department of Justice Act. This review involved consideration of the objectives and features of the Bill.

What follows is a non-exhaustive discussion of the ways in which Bill C-18 potentially engages the rights and freedoms guaranteed by the Charter. It is presented to assist in informing the public and Parliamentary debate on the Bill. It does not include an exhaustive description of the entire bill, but rather focuses on those elements relevant for the purposes of a Charter statement.

Overview

Many Canadians access news content through digital intermediaries. Bill C-18 would enact the Online News Act (the Act), which proposes a regime to regulate digital platforms that act as intermediaries in Canada’s news media ecosystem in order to enhance fairness in the Canadian digital news market. The Bill introduces a new bargaining framework intended to support news businesses to secure fair compensation when their news content is made available by dominant digital news intermediaries and generates economic gain. It seeks to support balanced negotiations between the businesses that operate dominant digital news intermediaries and the businesses responsible for the news outlets that produce this news content. If one party initiates it, a final offer arbitration process would be used as a last resort to address scenarios in which negotiated agreements are not reached. The Canadian Radio-television and Telecommunications Commission (the Commission) would support and oversee the administration of the regime.

Application of the Online News Act

The Act would regulate digital news intermediaries that make news content produced by news outlets available to persons in Canada. Search engines and social media services fall within the definition of digital news intermediary. Messaging services that primarily allow persons to communicate with each other privately would be excluded from the scope of the Act. The Act will only apply to digital news intermediaries if there is a significant bargaining power imbalance between the operators of a digital news intermediary and the news outlets producing the news content a digital news intermediary makes available. This will be determined according to statutory criteria, such as the size of the digital news intermediary and whether it occupies a prominent market position, and any regulations made by the Governor in Council. A digital news intermediary may also be exempted from the Act if its operator has entered into agreements with news businesses that satisfy certain conditions, such as providing fair compensation to news businesses and contributing to the sustainability of Canada’s news marketplace.

The Act will include criteria to determine which news businesses are eligible to participate in the bargaining process. To be eligible, a news business must be a qualified Canadian journalism organization or meet other statutory criteria that include operating in Canada and regularly employing two or more journalists in Canada.

A new bargaining regime to govern the making available of news content

The operators of dominant digital news intermediaries to which the Act applies would be subject to a new duty to bargain with eligible news businesses, which may bargain individually or as a group. This duty to bargain would arise when an eligible news business initiates bargaining with a digital news intermediary organization subject to the Act. The bargaining process could involve up to three sequential steps: bargaining sessions; mediation sessions; and final offer arbitration.

Final offer arbitration

When digital news intermediaries and news businesses do not reach agreements about making news content available through bargaining or mediation sessions, outstanding monetary disputes may proceed to a final offer arbitration process if at least one of the parties wishes to initiate arbitration. Under this process, an independent panel of arbitrators would select a final offer made by one of the parties. Arbitrators would be required to consider the value added to the news content in question by both parties and the benefits that each party receives from the news content being made available by the digital news intermediary. The parties could apply to a court to enforce the terms of an arbitral decision or negotiated agreement and recover any outstanding payments owing.

Freedom of the expression (section 2(b) of the Charter)

Section 2(b) of the Charter provides that everyone has freedom of thought, belief, opinion and expression, and includes freedom of the press and other media of communication. Section 2(b) has been broadly interpreted as encompassing any activity or communication, aside from violence or threats of violence, which conveys or attempts to convey meaning. Freedom of expression protects speakers as well as listeners. It may include all phases of a communication, from the maker or originator through supplier or distributor to receiver, whether listener or viewer.

A new and enforceable bargaining framework applicable to the digital distribution of news content has the potential to engage the right to freedom of expression in section 2(b) of the Charter.

The following considerations support the consistency of Bill C-18 with section 2(b).

Bill C-18 aims to enhance fairness in the economic relationship between news businesses and online platforms by enhancing the bargaining position of news businesses relative to that of large and dominant digital news intermediaries. The Act would not apply to digital news intermediaries unless there is a significant bargaining power imbalance. The goal is to support news businesses to negotiate and receive fair compensation when third parties with a dominant market position monetize their news content in a market environment that has been disadvantageous to news businesses. In this way, the measures seek to support the continued production and widespread availability of news content. This advances the fundamental values underpinning expressive freedoms in Canada, which include promoting the search for truth through the open exchange of ideas; participation in social and political decision-making; and the opportunity for individual self-fulfillment through expression. Consistent with these values, the regime will be accessible to a wide array of news businesses, including very small news businesses and those negotiating in groups. The Bill incorporates a broad definition of news content capable of accommodating significant diversity in the news sources and perspectives it seeks to sustain. The Bill also expressly provides that it is to be interpreted and applied in a manner that is consistent with freedom of expression, journalistic independence and the neutral treatment of news content by digital news intermediaries.

The bargaining framework created by the Bill applies to a range of ways in which digital news intermediaries may make news content or portions of it available.  This scope is designed to support the objectives of the Bill and its effectiveness in a dynamic digital environment.  Under the Bill, a digital news intermediary could make news content available by reproducing it or by facilitating access to the news content, including by generating links to news content.  Facilitating access to news content could be done through any means, including by way of an index, aggregation or ranking, all of which are methods used by online platforms to organize and distribute news content.  However, the Bill does not automatically or necessarily require digital news intermediaries to compensate news publishers when they make news content or portions of it available, including when digital news intermediaries generate links to news content.  Instead, the Bill gives parties the flexibility to bargain over compensation based on the nature of the content and how it is made available by the intermediaries.  In a complex and fluid market environment, the Bill approaches the broad range of ways in which news content may potentially be monetized – including to the benefit of digital news intermediaries, news publishers, or both parties to a negotiation – in a consistent and format-neutral manner.  In this way, the Bill is designed to avoid disruptions to the ways in which news content is currently made available and, in conjunction with its other features, to incentivize balanced and market-driven negotiations.

The Bill is carefully tailored to achieve its overarching objectives. News businesses are not required to participate; they may choose whether to bargain under the regime. The Bill contains measures to incentivize compensation arrangements that are negotiated between the parties. Dominant digital platforms may be broadly exempted from obligations under the Act if they independently negotiate agreements with news businesses. The Act provides that any such  agreements must not allow the freedom of expression and journalistic independence enjoyed by news outlets to be undermined by corporate influence.

Where the Act is engaged and negotiated agreements are not achieved, the regime relies on a final offer arbitration mechanism. This mechanism will resolve disputes on the basis of one of the parties’ final offers. It will be available only for monetary disputes and only where bargaining sessions and mediation have failed to produce a negotiated agreement. For the purposes of the Act, fair compensation is closely tied to economic and other gain. By requiring arbitrators to consider that digital platforms’ communication of news content can create benefits and value for both digital platforms and news publishers, the Bill clarifies that fair compensation should be assessed in a balanced fashion. Arbitrators would have the power to dismiss any offers that could cause serious harm to the provision of news content to persons in Canada or were otherwise inconsistent with the purposes of the Act. Digital platforms are also prohibited from engaging in any undue preference or perpetuating any undue disadvantage in relation to their dissemination of news content.

Role and powers of the Canadian Radio-television and Telecommunications Commission

The Bill would grant new roles and powers to the Commission. The Commission’s new responsibilities would include drafting a Code of Conduct to guide negotiations; determining which news businesses are eligible to participate; maintaining a list of digital news intermediaries to which the Act applies; determining when a digital news intermediary may be exempt from the regime because voluntary negotiated agreements satisfy statutory criteria; supporting the arbitration process; receiving complaints about various matters related to the framework; and applying administrative monetary penalties for non-compliance. The Commission would also have the power to draft regulations to govern various aspects of the operation of the Act.

The Bill authorizes the Commission to gather the information it requires to fulfil its responsibilities. Persons designated by the Commission may also order the production of records from a digital news intermediary operator or eligible news business where there are reasonable grounds to believe the records will be relevant to verifying compliance with the Act or preventing non-compliance. Parties who provide certain types of sensitive commercial information to the Commission, including trade secrets, may designate this information as confidential. Information designated as confidential would be subject to special use and disclosure restrictions backed by offence provisions. The Commission would have the authority to disclose designated information in the public interest, after considering representations from interested individuals and entities, or to disclose it to the Commissioner of Competition, where the Commission considers the information to be relevant to competition issues that have arisen. Both the responsible Minister and the Chief Statistician of Canada may request and obtain information submitted to the Commission, including designated information, for the purpose of performing their statutory functions.

Searches or seizures (section 8 of the Charter)

Section 8 of the Charter protects against “unreasonable” searches and seizures. A search or seizure will be reasonable if it is authorized by a law, the law itself is reasonable in the sense of striking an appropriate balance between privacy interests and the state interest being pursued, and the search is carried out in a reasonable manner. Because the information gathering, sharing and disclosure powers have the potential to interfere with privacy interests, they may engage section 8.

The following considerations support the consistency of these powers with the Charter. The information gathering, sharing and disclosure powers would not be available for penal purposes. Instead, these powers would be used to support the important regulatory aims of the regime – regulating digital news intermediaries to enhance fairness in the digital news marketplace and contribute to its sustainability. Privacy expectations will be diminished in this regulatory context. The Bill provides for the protection of confidential information. The restrictions on the use and disclosure of information designated as confidential would be backed by offences for non-compliance. Powers to gather, compel the production of, or disclose relevant information for regulatory or administrative purposes, rather than for the purpose of investigating offences, have been upheld as reasonable under s. 8. In reviewing the relevant provisions, the Minister has not identified any potential effects that could constitute an unreasonable interference with privacy as protected by s. 8.

Right to freedom of expression (section 2(b) of the Charter)

Section 2(b) may provide a limited right of access to documents in the possession of government bodies. Such access is constitutionally protected only where, without the desired access, meaningful public discussion and criticism on matters of public interest would be substantially impeded. However, even where a case for public access is established, access may be declined based on countervailing considerations. The limitations on public disclosure of confidential information submitted to the Commission have the potential to engage section 2(b) of the Charter.

The following considerations support the consistency of the prohibition restricting disclosure of confidential information with section 2(b). The Bill does not generally restrict public access to information submitted in the course of Commission proceedings. The restrictions on public disclosure would apply only to specific and limited types of information, such as trade secrets, where public disclosure could lead to harm. The prohibition on disclosure would not be absolute. The Commission would have the discretion to provide public access to confidential information if it determines that the disclosure is in the public interest.

Fair trial rights (section 11 of the Charter)

Section 11 of the Charter guarantees certain procedural rights to persons who have been charged with an offence. Its protections apply to proceedings that are “penal in nature” or that may lead to “true penal consequences”. True penal consequences include imprisonment and fines with a punitive purpose or effect, as may be the case where the fine or penalty is out of proportion to the amount required to achieve regulatory purposes. Section 11(d) guarantees the right to be presumed innocent until proven guilty according to law in a fair and public hearing by an independent and impartial tribunal.

The Bill would create offences for contravening the prohibition on disclosing information designated as confidential at Clause 55(2) and for contravening the prohibition on using information disclosed to the Commissioner of Competition for unauthorized purposes at Clause 55(6). While not punishable by imprisonment, the proposed offence provisions would provide for criminal charges, prosecution, and sentencing that could engage rights under section 11 of the Charter. In reviewing the relevant measures, no potential inconsistencies between the offence provisions and rights under section 11 have been identified.

The Bill would also create an administrative monetary penalty regime for certain violations of the Act. Persons designated by the Commission could issue notices of violation where they have reasonable grounds to believe that a violation has been committed. A notice of violation would include the act or omission giving rise to the violation, the amount of the penalty, and a summary of the person’s rights and obligations, including the right to make submissions to the Commission with respect to the violation or the penalty. The Commission would determine, on a balance of probabilities, whether the person committed the violation, subject to any undertakings accepted by the Commission.

Administrative monetary penalties under the Act could give rise to the possibility of substantial monetary penalties and therefore could potentially be perceived as impacting section 11 rights. The following considerations support the consistency of the administrative monetary penalty regime with the Charter. The proceedings leading to the imposition of a monetary penalty would be administrative in nature. The purpose of these penalties would be to promote compliance with the Act, not to “punish” as that concept is defined for the purpose of section 11 of the Charter. The penalties would not be subject to any prescribed minimums and would be determined on the basis of the compliance-related factors listed in the Bill. The Bill properly construed and applied would not authorize the imposition of a penalty that could give rise to “true penal consequences”.