Relief for media, consumers
Measures include tax credits for digital subscriptions and some qualifying news outlets
Federal government will offer tax breaks to digital news subscribers as part of plan to support Canadian journalism,
OTTAWA— The federal government is giving a tax break to digital news subscribers, a refundable tax credit to news outlets and will allow non-profit media organizations to give charitable receipts to donors, all to help journalism in Canada.
The measures — which critics said would erode journalistic independence — were outlined in Wednesday’s economic update and will cost a total of $595 million over five years.
“We’ve made some investments to ensure that we continue to have an important free press to ensure that we have a strong and healthy democracy,” Finance Minister Bill Morneau told reporters.
Under Wednesday’s measures, the government will introduce:
A temporary, non-refundable tax credit that will allow subscribers to claim 15 per cent of the cost of subscriptions of eligible digital news media. This is meant to help support digital news organizations in achieving a “more financially sustainable business model.”
A new category of “qualified donee” for non-profit journalism organizations that will, in essence, give them charitable status to issue receipts for donations from both individuals and corporations. And it will open the door for foundations to provide financial support. This measure builds on a pledge in the 2018 budget.
A refundable tax credit for qualifying news organizations that “produce a wide variety of news and information of interest to Canadians.” The tax credit will apply to the labour costs associated with producing original content and will be open to both non-profit and for-profit news organizations. The measure will allow outlets to claim a portion of their labour costs. An independent panel drawn from the news industry will be established to define eligibility of the measure, which will take effect Jan. 1.
The action is a response to calls from the news industry for government aid in the face of dramatic declines in ad revenue that have forced layoffs and the closure of more than 200 news outlets. News outlets have sought government aid to help with the transition to new digital business models.
John Honderich, chair of Torstar, the parent company of the Toronto Star, praised the actions outlined in the economic update.
“I am very encouraged by these positive steps. They should significantly help the media sector as it transforms to a sustainable digital future,” Honderich said in a statement.
Conservative MP Pierre Poilievre told reporters that taxpayers’ money should not be used to support media organizations, especially in an election year.