Canada's government will stop buying ads on Facebook and Instagram, Heritage Minister Pablo Rodriguez announced Wednesday, as a feud heats up with tech giants over a new media compensation law.

The Online News Act, adopted by parliament last month, requires digital giants like Google and Meta to make commercial deals to compensate Canadian news outlets when users access articles through their products, or face binding arbitration.

Meta, the parent company of Facebook and Instagram, announced soon after the bill passed that it would take measures to block Canadian news for users on its platforms in the country.

Rodriguez described those actions on Wednesday as "unreasonable" and "irresponsible."

"This is why today we are announcing that the government of Canada will be suspending its advertising on Facebook and Instagram," he said, estimating the cost to Facebook and Instagram at around Can$10 million (US$7.5 million) a year.

Google has also announced it will take similar actions to resist the law.

The two companies, who dominate online advertising, have been accused of draining cash away from traditional news organizations while using their content for free.

"Canadians are not going to be intimidated by American billionaires who want to undermine our democracy," said Prime Minister Justin Trudeau, adding that his government would not back down from its decision.

According to the Department of Canadian Heritage, more than 450 Canadian media outlets have closed their doors since 2008.

An October 2022 report by Canada's parliamentary budget watchdog estimated the Online News Act would see Canadian newspapers receive about Can$330 million per year from digital platforms.

Canada's measure builds on Australia's New Media Bargaining Code, a world first, which made Google and Meta pay for news content on their platforms.

California legislators are also aiming to enact a similar policy.

AFP signed a five-year agreement on "neighboring rights" with Google at the end of 2021 for the internet giant to pay for content from the news agency.

It also signed two commercial deals with the platform.