The debate over regulating Google and Facebook took an interesting turn recently, when prominent Canadian nationalist Richard Stursberg teamed up with Kevin Chan, Facebook’s lobbyist in Ottawa, to publish an opinion piece in the Globe and Mail that maps out a regulatory path for our federal government.
The fact that Facebook CEO Mark Zuckerberg, who has been doing everything he can to resist regulation in Australia, is sending out his lackeys to push for regulation in Canada means he’s worried about what our government might do.
It’s a sign of the times that Facebook is signing on to some of the regulatory options that Stursberg put forward last year in his book, “The Tangled Garden: A Canadian Cultural Manifesto for the Digital Age,” such as making social media companies collect sales tax from Canadian consumers, the lowest of all low hanging fruit in this debate.
More substantially, Zuckerberg is now endorsing “closing the loophole” in Canada’s Income Tax Act. That’s a reference to including digital media like Facebook under the 40-year-old policy of restricting corporate tax write-offs for purchasing advertising in foreign media. As foreign media, Facebook would likely take a hit in the Canadian digital advertising space.
Even more interesting is that Facebook is now endorsing the OECD's push to establish a common tax on multinational corporations, after doing its best to avoid paying corporate taxes in this country for years. Yet this is unlikely to amount to much, as the OECD has been doing nothing for several years about social media companies, thanks to Zuckerberg’s patron, the United States government.
Chan and Stursberg also advocate for Ottawa to relieve Facebook of its self-regulation of hate speech and fake news by establishing government standards — provided, of course, that Facebook escapes liability for the crud that keeps gushing through its filters.
Most of all, Zuckerberg wants to kill the federal government’s plan to adopt Australia’s model of re-balancing the bargaining power between publishers and the social media giant for news content that is both voluntarily and involuntarily published on its platform. Zuckerberg acknowledges that “internet platforms (must) do their part to support a thriving news industry.” But how?
Stursberg and Chan put forward, “as an option,” a teaspoon of corporate largesse: last year, Facebook, which in 2019 took in $2.6 billion in Canadian advertising revenue that used to underwrite Canadian journalism, donated $1 million with great fanfare to fund eight journalists on 12-month internships at The Canadian Press.
The other news-funding option offered is Stursberg’s previous proposal to give publishers and broadcasters a corporate tax break for paying journalists. This is a good idea in principle, although cash-strapped news publishers aren’t paying much in corporate taxes these days, so there’s not much to write off.
Nowhere in their column is there an endorsement or rejection of a federal levy on social media companies to fund journalism. That was the recommendation of the federal government’s own expert panel earlier this year.
That news fund option won’t be on the table until our federal government puts it there. The Liberals have been reluctant to do so because of the opportunistic attack they weathered from the Tories over the 2019 journalism tax credit program. Conservative Leader Erin O’Toole has sworn to repeal even that program.
If Facebook has its way, it will continue, hand-in-hand with Google, to make bags of money monopolizing 80 per cent of the Canadian and global markets for consumer data and digital advertising. That will continue so long as the U.S. and Canadian governments offer big tech safe harbour from anti-trust. If you review Zuckerberg's preferred options carefully, you will discover that Facebook isn’t going to pay — but you will.