The federal government has put a price tag on how much it would like to see Google and Facebook spend under legislation that requires the tech giants to compensate media companies for Canadian journalism.

Federal officials estimate Google would need to offer $172 million and Facebook $62 million in annual compensation to satisfy criteria they鈥檙e proposing be used to give exemptions under the Online News Act, a bill passed over the summer that will force tech companies to broker deals with media companies whose work they link to or repurpose.

Draft regulations released by the government Friday outlined for the first time how it proposes to level the playing field between Big Tech and Canada鈥檚 news media sector, and which companies it will apply to.

鈥淭he goal of it is to make sure that those that benefit the most from the Canadian market fall under the bill,鈥� newly minted Heritage Minister Pascale St-Onge said in an interview after the proposal鈥檚 release.

The government said companies will fall under the legislation if they have a total global revenue of $1 billion or more in a calendar year, 鈥渙perate in a search engine or social media market distributing and providing access to news content in Canada鈥� and have 20 million or more Canadian average monthly unique visitors or average monthly active users.

For now, Google and Meta鈥檚 Facebook are the only companies to meet the criteria, though officials said Microsoft鈥檚 Bing search engine is the next closest to falling under the act. Instagram and Threads won鈥檛 be captured by the proposed legislation because they have yet to reach 20 million or more monthly Canadian users, officials added.

鈥淲e know how technology evolves or how the market changes, sometimes at a rapid pace, and we want to make sure that this bill is relevant in five and 10 years,鈥� St-Onge said.

Companies meeting the criteria can receive an exemption from the act if they already contribute an amount laid out by a government formula to Canadian journalism.

The formula is based on the tech company鈥檚 global revenues and Canada鈥檚 share of global GDP. The government believes the calculation will deliver a contribution that is within 20 per cent of the earnings of full-time journalists working in a Canadian news organization.

Companies would be able to satisfy the criteria with both monetary and non-monetary compensation. While the draft does not specify what non-monetary contributions would count, officials said training and advertising could wind up meeting criteria.

The draft regulations will be subject to a further 30-day consultation, but Facebook and Instagram parent company Meta, which blocked news on its platforms in anticipation of the law coming into effect at the end of the year, immediately expressed its disappointment with the proposal.

The draft is based around a 鈥渇undamentally flawed premise,鈥� said Rachel Curran, head of public policy at Meta Canada.

鈥淎s the legislation is based on the incorrect assertion that Meta benefits unfairly from the news content shared on our platforms, today鈥檚 proposed regulations will not impact our business decision to end news availability in Canada,鈥� she said in a statement.

Google, which St-Onge has painted as more co-operative than Meta, has also threatened to pull Canadian news from its offerings.

鈥淲e鈥檙e carefully reviewing the proposed regulations to assess whether they resolve the serious structural issues with C-18 that regrettably were not dealt with during the legislative process,鈥� Google spokesperson Shay Purdy said in response to the draft.

The two companies have long lobbied against the legislation, with Meta claiming news is a tiny fraction of its business and removing it would result in little revenue loss for the social networking giant.

Google鈥檚 president of global affairs Kent Walker, meanwhile, has said the legislation 鈥渆xposes us to uncapped financial liability鈥� and claimed the company being targeted just because it shows links to news, 鈥渟omething that everyone else does for free.鈥�

But St-Onge maintained the legislation is a 鈥渞easonable and predictable path forward for both media platforms and newsrooms.

鈥淭his is what we have said that we do,鈥� she said. 鈥淚 think we delivered on finding a way forward that should please everyone.鈥�

The government said it is pushing forward with the act because Google and Meta have a combined 80-per-cent share of the $14 billion in online ad revenue seen in the country in 2022.

At the same time, 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.

The government says 69 per cent of Canadians access news online but only 11 per cent pay for it.

After Meta made good on its threats to remove Canadian news, the federal government pulled $10 million in annual advertising spend from Meta鈥檚 platforms. News and telecommunications businesses Quebecor, Bell Media, Torstar Corp., Cogeco, and Postmedia Network Canada Corp. replicated the move.

Paul Deegan, president and chief executive of News Media Canada, praised St-Onge鈥檚 deft approach to the 鈥渢ricky鈥� issue and was pleased it provided 鈥渃larity and predictability.鈥�

鈥淣o regulatory framework is ever perfect, but clearly she has strived to be extremely fair and balanced to all stakeholders, he said in an email.

鈥淭his is something everyone acting in good faith should be able to live with.鈥�

This report by The Canadian Press was first published Sept. 1, 2023.

Tara Deschamps, The Canadian Press