Google sends funds to journalism collective in exchange for Online News Act exemption

The Google News homepage is displayed on an iPhone in Ottawa on Tuesday, Feb. 28, 2023. THE CANADIAN PRESS/Sean Kilpatrick

Google has sent the $100 million it agreed to pay Canadian news outlets in exchange for an exemption from the Online News Act to a journalism organization designed to disperse the funds.

The U.S. tech giant said Friday that it had transferred the money to the Canadian Journalism Collective, a federally incorporated non-profit organization led by independent publishers and broadcasters.

Erin Millar, the collective's interim chair and the chief executive of journalism software firm Indiegraf, confirmed the receipt of the funds. The collective expects the cash to start reaching media businesses whose work was shared or repurposed by Google by the end of January.

The money's transfer marks a key milestone in the federal government's fight against tech companies that have swallowed up advertising dollars -- once dedicated to traditional publishers and broadcasters -- and have featured journalism on their platforms but have not had to compensate the companies creating the content.

The Online News Act aims to level the playing field by extracting compensation from search engine and social media companies with a total annual global revenue of $1 billion or more and 20 million or more Canadian average monthly unique visitors or average monthly active users. Google, along with Facebook and Instagram-owner Meta, are the only tech firms that currently meet these criteria.

Google secured a five-year exemption from the act by agreeing to pay $100 million a year to media organizations. Meta has avoided having to make any payments by blocking access to Canadian news on its platforms.

"Google cash in the kitty is a welcome development," said Paul Deegan, president and chief executive of industry group News Media Canada, in an email Friday.

Based on his interpretation of the Online News Act, Deegan estimates publishers will receive between $18,000 and $20,000 per journalist.

The collective has estimated eligible publishers will receive about $13,798 per full-time equivalent journalist employed based on a 2,000-hour year. Broadcasters will receive about $6,806 per eligible worker. That equates to $6.90 per claimed hour for publishers and $3.40 per hour for broadcasters.

Deegan and the collective's estimates differ because it is still being worked out which organizations are eligible for funding.

The act says qualifying organizations must produce news of "general interest" or on "current events" but not be solely focused on a lone industry or topic such as sports or arts. Organizations must also operate in Canada, have two or more journalists in the country and be a member of a recognized journalistic association or follow a code of ethics ensuring fairness, independence and rigour are applied to reporting.

"In the case that some claimants are deemed ineligible during verification, eligible news businesses will receive a higher amount per claimed hour," the collective's email said.

Documents the collective released last November outlining eligibility for the money show public broadcaster CBC/Radio-Canada will receive about seven per cent of the $100 million, less administration costs. Thirty per cent of the funding will go to broadcasters and another 63 per cent to publishers.

To get that money to journalism companies, the collective's board has contracted an accounting firm to develop a verification process and internal controls.

"That work is in progress, but we are not able to confirm a specific timeline yet," Millar said in a mid-December newsletter that she referred The Canadian Press to Friday.

The same update also noted the collective was drafting an agreement on which it planned to have recipients of the money provide feedback between Jan. 20 and 24.

Despite not having the money in hand yet, some media organizations already have made plans for the funding.

CBC News announced in November that it would use the money to add up to 25 journalists in more than a dozen communities "that are underserved by broadcast news outlets, with a focus on Western Canada."

"Over the coming weeks we will be finalizing locations and intend to fill the permanent jobs in early 2025," CBC spokesperson Chuck Thompson added in an email at the time.

The federal government previously said it pursued the Online News Act because Google and Meta have a combined 80 per cent share of the $14 billion online ad revenues seen in the country in 2022.

Ottawa also said news outlets have seen their advertising revenues shrink, forcing layoffs, a loss of media coverage in small and rural communities and 474 closures of Canadian news businesses between 2008 and 2023.

It estimated 69 per cent of Canadians access news online but only 11 per cent pay for it.

-- With files from Cassandra Szklarski

This report by The Canadian Press was first published Jan. 3, 2025.