By Canadian Press

Expert body calls for expanded rules to fix news-outlet tax credit status

Jul 18, 2019 | 1:43 PM

OTTAWA — The federal government should increase the scope of tax credits being made available to help small news-media outlets survive, an independent panel of experts recommended in a report issued Thursday.

The tax credit program being offered by the federal Liberals will not be enough on its own to prevent the disappearance of some news outlet, the panel said in a letter to Heritage Minister Pablo Rodriguez and Finance Minister Bill Morneau.

Especially vulnerable are “small local news media outlets that are not covered by the Budget 2019 measures,” the letter stated.

“Other support programs should be considered.”

Small publications should be allowed to count freelancers and independent contractors among their journalists in order to qualify as Canadian journalism organizations under the tax credit program, the report recommended.

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The program first outlined in the fall 2018 economic statement included refundable tax credits for qualifying journalism organizations, a non-refundable tax credit for subscriptions to Canadian digital news, and charitable status for not-for-profit journalism organizations.

Under the initial criteria, a news outlet would have to regularly employ two or more journalists to be eligible for the credits, and primarily provide original news content to a general audience.

To further aid smaller journalistic entities, and to better serve minority-language communities and support official language minorities, the panel urged the government to “immediately dedicate” a minimum of five per cent of the federal advertising budget towards written publications in those communities.

On a larger scale, the government should “commit to buying substantial advertising” in print and digital publications, the report concluded.

Rules determining who should qualify as a donor to a journalistic outlet with charitable status should also be expanded, the panel said.

“The current legislation excludes organizations such as Les Amis du Devoir, which have a long history of supporting journalism, and which could play an important role in the future funding of journalism,” the report said.

The report also recommended the Canada Revenue Agency be given responsibility for determining which organizations qualify for funding, with the aid of an advisory body.

The panel also strongly urged the government to ensure that any money or tax credits awarded to organizations go to support the creation of journalism and not to line the pockets of corporate executives.

Morneau included measures in his latest budget, worth an estimated $600 million, to support news media outlets that have faced a revenue crisis in recent years.

A panel of experts, comprised of representatives from newspaper and journalist associations and unions, was then appointed to help guide the government in determining how the tax measures should be implemented.

In response to the report, the government said it would move ahead with supports for journalism while ensuring there is no interference in the news content they produce.

“From the beginning, we have said that we will protect the independence of journalists by letting the industry determine the criteria and definitions,” Simon Ross, a spokesman for Rodriguez, said in an email.

“We will take all appropriate measures to continue respecting that independence.”

Terry Pedwell, The Canadian Press