I'm no Meta defender but I'm also very confused about what the legislators thought the law was supposed to do.
Cui bono?
The law was supposed to siphon funding from foreign companies to Canadian media, who the Canadian government are in bed with. That's why it doesn't appear to make sense: it's not public-benefit lawmaking, it's plain ol' corruption. Same as the earlier Australian law (there, it was Rupert Murdoch leaning on the Coalition government which he largely kept in power with his local media empire).
It's why the Canadian government is so apoplectic about it; Meta's unexpected pushback exposes the law to scrutiny it simply cannot withstand, and highlights a rather unsavoury side of the government in having ever passed it.
I suppose it was to protect the (online) newspapers? In a more general way, not let the internet become facebooknet?