Federal agencies will publish an A-list of newspapers and websites deemed reliable under a multi-million dollar subsidy program, the Department of Finance yesterday told the Senate national finance committee. Subsidies to federally-approved news media invite government meddling in a free press, cautioned one senator.
“The rules themselves allow for the publication of a list of qualifying journalism organizations,” said Trevor McGowan, director general of tax legislation: “It would allow for, say, the Canada Revenue Agency to have a list saying here are the organizations that qualify for the digital tax credits. You could go to that list.”
Bill C-97 the Budget Implementation Act proposes a 15 percent tax credit to a maximum $75 for subscribers of websites operated by a “qualified Canadian journalism organization”. Criteria are not known. The tax credit is projected to cost $11 million in 2020. It expires in 2024.
The bill also amends the Income Tax Act to offer lucrative payroll subsidies for news organizations “primarily engaged in the production of original written news content”. A total $360 million would be paid over four years through a 25 percent payroll tax credit for publishers, the equivalent of a maximum $13,750 per newsroom employee, retroactive to January 1, 2019.
An unnamed cabinet-appointed group will decide which media qualify for subsidies. “The government will decide whether or not to change certain criteria,” said Maude Lavoie, Finance Canada director general of business tax programs.
Senator Raynell Andreychuk (Conservative-Sask.), chair of the foreign relations committee, yesterday described the subsidy program as troubling. “I’m very concerned that Canada has been one of the countries that that has staunchly talked about freedom of the press,” said Andreychuk. “We know how many journalists have lost their lives. So, we monitor and fight back and say democracy is the free press, an independent judiciary. And here we’re going to be setting up criteria by the government to get government funds.”
“Manipulation Of The Press”
“In the countries I’ve worked, survival for a lot of people to get their information meant they had to go to the government,” said Andreychuk. “And I’ve watched how original rules might have had good intentions, but we don’t know what’s going to happen down the line. Sometimes we look the other way and we wake up and find there is manipulation of the press.”
“I’m worried here you have criteria, you’ll have to jump those; selection committees appointed by the government – we’re intruding on the freedom of the press,” said Andreychuk. “It may not be our intention; it’s the survival of newspapers. But we’re going to be creating opportunities for others to come in, and we may not be really helping those we intended to in the first place.”
“To me it’s very dangerous ground, and it shouldn’t be through a tax credit,” said Andreychuk. “It should be wide open as a debate for Canadians, whether this is the way to support a freer press, a press that’s struggling against bloggers and the new internet systems, tweets and whatever else. I think it’s a bigger national debate than a question tucked into a tax bill.”
“We all want to encourage the survival of the press, whether it’s in a small town or elsewhere, but if we start down this road, with these criteria, with government setting that criteria and interpreting that criteria, I think we’re on the wrong road,” said Andreychuk.
“Those are very important and understandable concerns,” replied Pierre Leblanc, the finance department’s director general of personal income tax: “Your concern is certainly heard.”
The department suggested details of the program have been finalized by cabinet, but remain unannounced. “We’re not in a position to talk about specific news organizations,” said Director General Leblanc.
“What frightens me about some of these things is there are a lot of assumptions and you’re not willing to provide us with hard facts,” said Senator Nicole Eaton (Conservative-Ont.)