In March, publishers got those details, and they seem promising.
“We believe that the focus on journalism is good,” John Hinds, the president and CEO of News Media Canada, which represents more than 800 print and digital titles throughout the country, told us last week. “Obviously it is not a ‘silver bullet’ but will go a long way to ensure that Canadians will continue to have access to quality journalism.”
A 25 percent tax credit for salaries
Specifically, the measures include a 25 percent tax credit for salaries of eligible newsroom employees of Qualified Canadian Journalism Organizations, with an annual salary cap of C$55,000 (equal to approximately 36,615 euros), for a maximum credit of C$13,750 (about 9,155 euros).
Employees must also work at least 26 hours a week to qualify. The initiative will apply to salaries after 1 January 2019. This credit is not available to broadcasters or to publications that receive funding from the Canada Periodical Fund (more on that in just a moment).
So, what exactly is a Qualified Canadian Journalism Organization (QCJO)? This is a new term, and broadly speaking, is a Canada-based and Canadian-owned news publisher whose primary function is the production and distribution of general interest news and information in written form. For full details on what qualifies as a QCJO, see this story from News Media Canada.
Benefits for news publishers large and small
Asked if these new measures would help larger publishers to a greater degree than smaller ones or vice versa, Hinds said: “I think the good news is that the measures are for the most part publisher agnostic, so there are no real winners or losers. Every publisher can have access to the journalism tax credit.”
However, he did note that “the one challenge that we are facing is from some of the very small publications, as the announcement requires that a publication have two full time journalists and some of our papers don’t. We hope to work with the government to change that. The cap on the tax credit at $55,000 presents more of a challenge for some of the larger metropolitan newsrooms as well, given that their salaries are higher.”
Likewise, smaller papers also benefit from the Canada Periodical Fund, and Hinds said some of them might elect to continue getting that funding rather than attempting to take advantage of the new tax measures.
“The Canada Periodical Fund provides about $10 million a year to small subscription based weekly newspapers,” he said. “About 250 very small newspapers receive the subsidy. I think most will continue to take it in favour of the tax credit though some may take the credit instead as there are more requirements for getting Aid to Publishers. The benefit of the subsidy is that it is an annual payment; the tax credit will likely take a year or so to process.”
Tax credit for digital subscribers
In addition, Canadian taxpayers can benefit from a new digital subscription tax credit that will allow them to claim up to $500 in costs for eligible digital subscriptions for a credit of up to $75 per year (or 15 percent).
Qualifying digital subscriptions are ones from that allow Canadian taxpayers to access content that is provided in a digital form by a Qualified Canadian Journalistic Organization.
Since publishers and digital subscribers won’t begin to see financial benefits of these measures until 2020, we will revisit this story to see how the initiatives for publishers are working out, and to find out whether the tax credit for subscribers is helping to increase digital subscriptions to news publishers.
For details about the new tax measures, see News Media Canada’s story about them by clicking here.