OTTAWA – A tax credit Ottawa is promising to encourage more Canadians to pay for online news will roughly cover two months of a digital subscription fee.
The tax credit is one of three components of a $595-million, five-year boost for the ailing media industry promised by Finance Minister Bill Morneau in last week’s fall fiscal update – along with tax credit for the labour costs news companies incur to produce original content and offering charitable status to non-profit media organizations.
The tax credit will be worth 15 per cent of the cost of a subscription, although Finance Canada spokesman Jack Aubry says the actual dollar amount someone will save depends on the cost of a subscription.
For example, Aubry says someone who pays $200 a year to get access to a news site online would be entitled to a tax credit worth $30.
He says the government believes the tax credit is needed to encourage more Canadians to subscribe to online news and help media organizations transition to a more sustainable business model.
John Hinds, CEO of News Media Canada, which represents the newspaper industry, says there is “no silver bullet” that will save Canada’s news industry as it struggles with the transition to digital, which has seen advertising revenues fall and subscribers abandon ship.