$600M PLEDGE OVER 5 YEARS TO HELP NEWS MEDIA COPE WITH CHANGE.

Five-year plan to use donation, labour tax breaks

The government is pledging nearly $600 million over the next five years to help news organizations struggling to adapt to a digital age that has disrupted traditional business models.

Finance Minister Bill Morneau said the government wants to protect the “vital role that independent news media play in our democracy and in our communities.”

The plan in the government’s fiscal update allows non-profit news organizations to accept donations and issue tax receipts to donors. To be eligible, charitable journalism operations will have to release content for free under a creative commons licence, which the government hopes will have a knock-on effect for local news organizations that can post the stories or incorporate them into their own journalism.

The plan also includes a new refundable tax credit for labour costs at both forprofit and non-profit news organizations. To determine eligibility for the credit, the government plans to create an independent panel drawn from the “news and journalism community,” which will also “define and promote core journalism standards (and) define professional journalism.”

Paul Godfrey, the CEO of Postmedia, which publishes National Post and daily broadsheets in many of Canada’s largest cities, said that tax credit “could be looked upon as a turning point in the plight of newspapers in Canada.”

“I tip my hat to the prime minister and the finance minister. They deserve a lot of credit,” said Godfrey. “Everyone in journalism should be doing a victory lap around their building right now.”

Canadians who subscribe to eligible news media will also get a small break on their taxes. The plan includes a temporary, nonrefundable 15-per-cent tax credit on subscriptions.

The measures add up to a total five-year cost of $595 million and follow a fiveyear $50 million fund for local news in the 2018 budget. More information about the measures will be announced in the 2019 budget.

Although the government’s fiscal update offers more than 10 times more support for media than the 2018 budget, it still falls short of what some media advocates had hoped for. News Media Canada proposed an annual $350-million fund to subsidize individual journalists at publications providing civic or localnews.thefundwould support local journalism in larger centres, as well as thousands of communities with weekly newspapers that aren’t reached by the CBC.

The government’s plan leaves some other options on the cutting-room floor af- ter the Heritage department conducted a lengthy consultation process. The House of Commons heritage committee recommended last year that the government offer tax credits for news organizations making digital investments and the Public Policy Forum called for a tax on foreign companies, like The New York Times, selling digital subscriptions in Canada. Neither of those measures, nor the fund proposed by News Media Canada, were included in the government’s announcement on Wednesday.

The plan also doesn’t tackle the primary issue affecting print media in Canada: plummeting ad revenues. Canadian publishers have argued that foreign companies like Facebook and Google, which dominate the global advertising market, benefit from an unfair advantage by avoiding provincial sales taxes. A small business in Ontario, for example, would have to pay a 15-per-cent provincial sales tax to advertise with the local paper, but not when buying ads from Google.

The government has been keen to engage in partnerships with tech companies, among them a “culture strategy” announced last year that included a $125-million deal with Facebook to set up a news incubator at Ryerson University. That strategy also included a $500-million investment from Netflix to produce content in Canada over the next five years.

John Hinds, CEO of News Media Canada, said he was pleased with the announcement. “We’ve been asking for help and they listened to us. I think they delivered. It’s a substantive investment,” said Hinds.

EVERYONE IN JOURNALISM SHOULD BE DOING A VICTORY LAP.