New tax credit could provide access to online news sites for two months

A tax credit Ottawa promises to entice more Canadians to pay for online news will cover about two months of digital subscriptions.

Tax credit is one of three components of a $ 595 million boost over five years for the troubled media sector promised by Finance Minister Bill Morneau in last fall's financial update – as well as tax credit for content companies and offering charitable status to non-profit media organizations.

The tax credit will account for 15% of the cost of a subscription, although Finance Canada spokesman Jack Aubry says the actual amount that a person will save will depend on the cost of a subscription. ;a subscription.

For example, Aubry says that someone who pays $ 200 a year to access an online news site would be entitled to a $ 30 tax credit.

According to him, the government believes that tax credit is needed to encourage more Canadians to subscribe to online news and help the media transition to a more sustainable business model.

John Hinds, CEO of News Media Canada, which represents the newspaper industry, says there is no quick fix that will save the Canadian press industry in its fight for the transition to digital, which resulted in a drop in advertising revenues and the abandonment of subscribers.

But before the government's announcement, Hinds said several newspapers had questioned their readers about the idea of ​​a subscription tax credit and he was well received.

"It's about encouraging people to pay for the news and taxing them to do it," he said. "Part of the challenge we've had as an industry is that people do not want to pay."

Tax credits to encourage behavior are common, with a focus on different types of activities, from homeownership to volunteering. But they do not always work.

Buy media?

In 2017, the Liberals abolished a tax credit for public transit pbades introduced by the former Conservative government in 2006 to encourage citizens to use buses and buses more often. trains. Two separate studies on this credit, one from the University of Ottawa and the other from St. Mary's University, in Halifax, determined that the The impact of credit on the use of public transit was minimal or even nil.

The tax credit is supposed to be temporary, but no additional details have been decided. Hinds says that there are still many details to be determined, such as eligible subscriptions, if you can claim it for more than one subscription and if there is a maximum benefit per household.

The cost of digital subscriptions varies considerably by site. Some offer one payment per item, others access daily, weekly, monthly or annual, still others offer online access to buyers of the print version.

The government intends to appoint a group of journalists in a committee to recommend the eligibility and parameters of the media package, but it seems that there is no more details about this before the next federal budget.

Conservatives are stirring up the government's media package, saying the Liberals are trying to buy reporters before the next federal election. Hinds said it would appear that critics of the package are less concerned about the subscription tax credit because it targets media consumers directly rather than journalists.

However, a spokesman for Conservative leader Andrew Scheer said the party's biggest concern was the composition of the committee that will decide which organizations are eligible for any part of the package.