The Trudeau government has heard the cry from the heart of the country’s newsrooms, as closures and job cuts have multiplied in recent years.
The federal fall economic statement plans to temporarily increase the Canadian journalism labor tax credit from 25 to 35% — a request made by many players in the industry for years.
The annual cap on costs that can be claimed by an eligible staff member will also increase from $55,000 to $85,000.
In other words, the federal government will now cover 35% of journalists’ salaries up to $85,000 per year, which would be equivalent to $29,750 per newsroom employee.
The increase in the tax credit will take effect on 1er January 2024 and will be in effect for four years, while the new cap of $85,000 on eligible costs is final. The tax credit rate will return to 25% from 2027.
In an interview last week, the Minister of Heritage, Pascale St-Onge, did not want to comment on the imminent announcement of the measure, first reported by The duty. However, she “obviously” admitted that she would like the Minister of Finance, Chrystia Freeland, to plan an increase in this tax credit to 35%.
This measure would cost approximately $129 million over five years, starting in 2024-2025, and $10 million per year thereafter.
The Canadian journalism labor tax credit was first introduced in the 2019 budget. It provided a refundable tax credit on salaries or wages paid to eligible newsroom employees of a “eligible journalistic organization”.
No emergency fund
The increase in the tax credit to 35% responds to one of the requests of the FNCC-CSN, but the Federation also hoped to see the eligibility criteria broadened for electronic media (radio and television) – especially in the context cuts to 547 employees at the TVA group.
However, the payroll tax credit program is still reserved exclusively for the written press.
“Radio and television have just hit the wall that the written press hit about six years ago, namely that advertising revenues no longer cover their expenses and that they are in deficit,” lamented the president of the FNCC-CSN last week, in an interview at Duty.
The president also hoped to see the announcement of an emergency fund for struggling media in the economic update. However, the increase in the tax credit is the only media aid measure announced in the Minister of Finance’s statement.
The Bloc Québécois, which had proposed an emergency fund of $50 million in the wake of the TVA cuts, reiterated its request for an economic update. The New Democratic Party supported this idea.
“Until the implementation of a lasting solution, the government must quickly create an emergency fund to help the media, equal to the revenue that was expected from the implementation of Bill C- 18,” demanded the Bloc.