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Summary of Federal Measures to Support Journalism


  • A labour tax credit for news organizations in the amount of 25% of editorial salaries up to $55,000 (i.e. about $14,000 per head.) It is retroactive to January 1, 2019. The government has already made many of the broad stroke decisions about eligible news organizations and eligible news coverage. The available funding is budgeted at $360 million over five years, levelling out at $95M annually by 2023. A news organization cannot draw upon both the Periodical Fund ($85M per year) and this tax credit ($95M per year).


  • Non-profit news organizations will be able to issue tax receipts to donors starting January 1, 2020. The foregone tax revenue is budgeted at $96M over four years, i.e. about $25M annually.


  • The digital subscription non-refundable tax credit is also effective for the 2020 tax year. Its capped at $75 per tax payer on subscription purchases up to $500. The budgeted cost is $138M over four years, topping out at $41M for 2023. It is restricted to written journalism.


  • All three budget measures are tied to legitimate news organizations (a Qualified Canadian Journalism Organization) which will be vetted, with some broad guidelines already established in the Budget, by a blue ribbon Independent Panel of journalists to be announced later. There is no timetable for establishing the Independent Panel.


  • Regulated television stations are not eligible.


Here is the summary provided by the Finance Ministry in the Budget document:


Budget 2019 - Business Income Tax Measures


Support for Canadian Journalism


Budget 2019 proposes to introduce three new tax measures to support Canadian journalism:


• allowing journalism organizations to register as qualified donees;

• a refundable labour tax credit for qualifying journalism organizations; and

• a non-refundable tax credit for subscriptions to Canadian digital news.


These measures are intended to provide support to Canadian journalism organizations producing original news.


An independent panel will be established to recommend eligibility criteria for the purposes of these measures. Once the panel has made its recommendations, eligibility of organizations will be evaluated and a recognition process will be put in place.


Qualified Canadian Journalism Organizations


Qualified Canadian Journalism Organization (QCJO) status is a necessary condition for each of the three measures. In order to be a QCJO, an organization will be required to be recognized as meeting criteria developed by the independent panel. This recognition will be made by an administrative body that will be established for this purpose.


A QCJO will be required to be organized as a corporation, partnership or trust. It will need to operate in Canada and meet additional conditions, depending on how it is organized. To qualify as a QCJO, a corporation will be required to be incorporated and resident in Canada. In addition, its chairperson (or other presiding officer) and at least 75 per cent of its directors must be Canadian citizens. In general, in order for a partnership or trust to qualify, such corporations,

along with Canadian citizens, must own at least 75 per cent of the interests in it.


In addition, an organization will be required to meet the following conditions to

be a QCJO:


• it is primarily engaged in the production of original news content and in particular, the content must be primarily focused on matters of general interest and reports of

current events, including coverage of democratic institutions and processes, and


  • must not be primarily focused on a particular topic such as industry specific news, sports, recreation, arts, lifestyle or entertainment;


• it regularly employs two or more journalists in the production of its content who deal at arm’s length with the organization;


• it must not be significantly engaged in the production of content to promote the interests, or report on the activities, of an organization, an association or their members, for a government, Crown corporation or government agency, or to promote goods or services; and


• it must not be a Crown corporation [ed note: CBC ineligible], municipal corporation or

government agency.


Qualified Donee Status


The Government of Canada provides support to certain categories of organizations, including charities, that are referred to in the Income Tax Act as “qualified donees” and that operate for some broad public purpose. Canadians may claim the charitable donation tax credit (for individuals) or deduction for donations (corporations) for donations to qualified donees. Qualified donees can also receive gifts from Canadian registered charities.


Budget 2019 proposes to add registered journalism organizations as a new category of tax-exempt qualified donee. In order to qualify for registration, a QCJO will be required to apply to the Canada Revenue Agency (CRA) to be registered as a qualified donee and meet certain additional conditions, as described below.


Registered journalism organizations will be required to be corporations or trusts and to have purposes that exclusively relate to journalism. Any business activities carried on by these organizations will be required to be related to their purposes.


For example, the sale of news content and advertising would be considered activities related to journalism. These organizations will not be permitted to distribute their profits, if any, or allow their income to be available for the personal benefit of certain individuals connected with the organization.


To ensure that registered journalism organizations are not used to promote the views or objectives of any particular person or related group of persons, a registered journalism organization:


• will be required to have a board of directors or trustees, each of whom deals

at arm’s length with each other;


• must not be factually controlled by a person (or a group of related persons); and


• must generally not, in any given year, receive gifts that represent more than 20 per cent of its total revenues, including donations, from any one source (excluding bequests and one-time gifts made on the initial establishment of the particular registered journalism organization).


To provide transparency, the names of all registered journalism organizations will be listed on the website of the Government of Canada. Registered journalism organizations will be required to file an annual return with the CRA containing information on their activities. In addition, registered journalism organizations will be required to disclose, in their information returns, the name(s) of any donors that make donations of over $5,000 and the amount donated. Similar to registered charities and registered Canadian amateur athletic associations, these information returns will be made public along with certain additional information.


Qualified donees are required to issue official donation receipts in accordance with the Income Tax Act, to maintain proper books and records and to provide access to them upon request by the CRA. As qualified donees, these rules will apply to registered journalism organizations, including the regulatory sanctions for failing to follow these rules (i.e., a monetary penalty, the suspension of its qualified donee status and the revocation of registration).


Where a registered journalism organization no longer meets the requirements for registration as a qualified donee (including because it fails to qualify as a QCJO), the CRA will have the authority to revoke its registration. Where a journalism organization’s registration is revoked, it will no longer be exempt from income tax as a registered journalism organization and will no longer be entitled to issue charitable donation receipts.


Where the CRA proposes to revoke the registration of a registered journalism organization, it will be able to file an objection with the Appeals Branch of the CRA. If the organization disagrees with the decision of the Appeals Branch, it will be entitled to appeal the decision to the Federal Court of Appeal.


This measure will apply as of January 1, 2020.


Refundable Labour Tax Credit


Budget 2019 proposes to introduce a 25-per-cent refundable tax credit on salary or wages paid to eligible newsroom employees of qualifying QCJOs. This will be subject to a cap on labour costs of $55,000 per eligible newsroom employee per year, which will provide a maximum tax credit in respect of eligible labour costs per individual per year of $13,750. To qualify for this credit, a QCJO must be a corporation, partnership or trust primarily engaged in the production of original written news content. A QCJO carrying on a broadcasting undertaking (as defined in the Broadcasting Act) will not qualify for this credit. A QCJO will also not qualify for this credit in a taxation year if it receives funding from the Aid to Publishers component of the Canada Periodical Fund in that taxation year.


A QCJO that is a corporation will be required to meet the following additional requirements in order to qualify:


• if it is a public corporation, it must be listed on a stock exchange in Canada and not be controlled by non-Canadian citizens; and


• if it is a private corporation, it must be at least 75-per-cent owned by Canadian citizens or by public corporations described above.


As noted above, an independent panel will be established to consider eligibility criteria for purposes of this measure. Initially, an eligible newsroom employee will generally be an employee of a QCJO who works for a minimum of 26 hours per week, on average, and is employed by the QCJO (or is expected to be employed) for at least 40 consecutive weeks. In addition, an eligible newsroom employee will be required to spend at least 75 per cent of their time engaged in the production of news content, including by researching, collecting information, verifying facts, photographing, writing, editing, designing and otherwise preparing content. These rules will be amended if necessary, pending the work completed by the independent panel.


Eligible expenses will include salary or wages paid to eligible newsroom employees in respect of a taxation year and will be reduced by the amount of any government or other assistance received by the QCJO in the taxation year.


In addition, salary or wages will be eligible expenses of an organization only if they are in respect of a period throughout which it is a QCJO.


A registered journalism organization, which will be exempt from income tax, may also be entitled to this refundable tax credit in respect of its eligible expenses.


This measure will apply to salary or wages earned in respect of a period on or after January 1, 2019. The administrative body will be able to recognize organizations as of that date, in order to ensure the credit is available as intended.


Personal Income Tax Credit for Digital Subscriptions


Budget 2019 proposes a temporary, non-refundable 15-per-cent tax credit on amounts paid by individuals for eligible digital news subscriptions. This will allow individuals to claim up to $500 in costs paid towards eligible digital subscriptions in a taxation year, for a maximum tax credit of $75 annually. In the case of combined digital and newsprint subscriptions, individuals will be limited to claiming the cost of a stand-alone digital subscription.


Eligible digital subscriptions are those that entitle a taxpayer to access content provided in a digital form by a QCJO that is primarily engaged in the production of written content. A subscription with a QCJO carrying on a broadcasting undertaking (as defined in the Broadcasting Act) will not qualify for this credit.


Amounts paid to an organization will be eligible only if, at the time they are paid, the organization is a QCJO. If an organization ceases to qualify as a QCJO, that will not cause amounts paid by individuals for subscriptions prior to the loss of QCJO status to cease to qualify for the credit.


This credit will be available in respect of eligible amounts paid after 2019 and before 2025.

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