Because legislators are voted into position, their only proven qualification is an ability to persuade people to vote for them. They don't necessary have good negotiation skills. In this case, I believe the legislators took a clearly adversarial position against Google and not being good negotiators thought that strong-arming Google by rejecting all of Google's suggestions and just forcing them to pay was going to work. Instead, Canadians will be directed to overseas news agencies and their local news industry will rapidly wither. Mistakes are a great way to learn.
Discussion
It shuts the country out from the world - would have made sense if it was some authoritarian state, but for free market, its going to hurt.
Also true on so many other aspects - random person who spent years convincing a selected group of people to get him/her to power will now decide on health policies, education, military and more that can radiate globally, that the person has no expertise or wide range of knowledge to begin with.
If you think about it, everybody is quite equal to each other, its the governments that differentiates how healthy / advanced / rich or poor the people are