Today’s fall economic statement from the federal government contained three items that are good news for the industry.
These three announcements are:
1) Access to Charitable Tax Incentives
2) A New Refundable Tax Credit to Support News Organizations
3) A New Non-Refundable Tax Credit for Subscriptions to Canadian Digital News Media
The three measures have a budget of approximately $595 million over the next five years.
There is little detail about any of the programs and there will be further information announced in the 2019 budget.
Access to Charitable Tax Incentives
The government will introduce a new category of qualified donee for non-profit journalism organizations that produce a wide variety of news and information of interest to Canadians. As qualified donees, eligible non-profit journalism organizations would be able to issue official donations receipts, which allows donors to benefit from tax incentives for charitable giving (including the Charitable Donations Tax Credit for individuals and deductions for corporations). As qualified donees, these organizations would also be eligible to receive funding from registered charities.
A New Refundable Tax Credit to Support News Organizations
The government will introduce a new refundable tax credit for qualifying news organizations. The new measure will aim to support Canadian news organizations that produce a wide variety of news and information of interest to Canadians. The refundable credit will support labour costs associated with producing original news content and will generally be available to both non-profit and for-profit news organizations. An independent panel will be established from the news and journalism community to define eligibility for this tax credit, as well as provide advice on other measures. Once established the effective date of the refundable tax credit will be set for January 1, 2019. There was no information in the announcement on the rate of the credit or the scope. This will be announced in the 2019 Budget.
A New Non-Refundable Tax Credit for Subscriptions
To support Canadian digital news media organizations in achieving a more financially sustainable business model the government intends to introduce a new temporary, non-refundable 15 % tax credit for qualifying subscribers of eligible digital news media. There is no announcement the effective date.
John Hinds, president and CEO of News Media Canada made the following statement on these changes:
“We are happy that the government has moved on this file and the announcements are substantial and address the issues that have been raised by the industry. They are heading in the right direction though there is substantial work to be done on the definitions and implementation. We are particularly happy that the government has focused on supporting independent journalism.”