Friday , September 30 2022

A new tax credit could pay for two months access to online news sites



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A Ottawa tax credit promises to encourage more Canadians to pay for online news will cover approximately two months of a digital subscription fee.

Fiscal credit is one of the three components of a five-year impetus for the media industry that was promised by Bill Morneau, Finance Minister in the last fiscal update week, along with tax credit for news companies with labor costs , content and charity status to non-profit media organizations.

The tax credit will be 15% of the cost of a subscription, although Finance Canada spokesman Jack Aubry says the real value of the dollar someone will save depends on the cost of a subscription.

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

He says the government believes fiscal credit is needed to encourage more Canadians to subscribe to online news and help media organizations move on to a more sustainable business model.

John Hinds, CEO of News Media Canada, who is the newspaper industry, says there is no "silver bullet" to save the news industry in Canada as it faces the transition to digital, which saw advertising revenue decline and subscribers abandon vessel.

But before the government announcement, Hinds says several newspapers have asked their readers about the idea of ​​a tax credit for the subscription and found that it was well received.

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

Tax credits to encourage behavior are common, from home ownership to volunteering promoted by offering various loans. But it does not always work.

Buying from media?

In 2017, the liberals eliminated a tax credit for public transit passes, which was introduced by the former conservative government in 2006 to encourage people to use bus and trains more often. Two separate studies on that credit, one from the University of Ottawa and another university of Saint-Mary in Halifax, determined that there was no impact on the use of transit as a result of credit.

The subscription tax credit is meant to be temporary, but no further details have been established. Hinds says there is still a lot of detail that we need to develop, such as which are the eligible subscriptions, if you can apply for more than one subscription and if there is a maximum household benefit.

The cost of digital subscriptions varies greatly depending on the site, some offering pay per story, others daily, weekly, monthly or yearly access, and others that provide online access to those who buy the print version.

The government plans to appoint a committee of journalists to a committee to recommend eligibility and parameters for the media package, but it looks like there will be no further details available until the next federal budget.

Conservatives are full of banks in the government's package of measures, arguing that liberals are trying to buy journalists before the next autumn federal election. Hinds said there are some clues to the criticism of the package are less concerned about subscription tax credit because it addresses media consumers rather than journalists.

However, a spokesman for conservative leader Andrew Scheer said the party's biggest concern is forming the group that will decide which organizations are eligible for any part of the package.

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