Frequently asked questions
Proposed changes to legislation announced
On April 17, 2020, the Department of Finance issued a News Release and draft legislation announcing that changes would be made to the tax measures that support journalism. The Canada Revenue Agency (CRA) will administer these changes as proposed.
Q1. What are the measures to support Canadian journalism?
The Government introduced three tax measures in Budget 2019 to support Canadian journalism.
- The Canadian journalism labour tax credit, a 25% refundable tax credit on salaries or wages payable in respect of eligible newsroom employees for periods beginning on or after January 1, 2019.
- The digital news subscription tax credit, a 15% non-refundable personal income tax credit for digital news subscription costs paid by an individual to a qualified Canadian journalism organization (QCJO), which applies to qualifying amounts paid after 2019 and before 2025.
- A new type of qualified donee called a registered journalism organization for not-for-profit journalism organizations, which is in effect as of January 1, 2020.
To be eligible for these measures, an organization must first be designated as a QCJO. While designation as a QCJO does not automatically entitle organizations to specific tax measures, it is the necessary first step in determining if any of the three income tax measures could apply.
Qualified Canadian journalism organization designation
Q2. What is a QCJO?
To be designated as a QCJO, an organization must meet the following conditions:
- it is organized as a corporation, partnership or trust and meets additional criteria depending on how it is organized;
- it operates in Canada, including that its content is edited, designed and, except in the case of digital content, published in Canada;
- it is engaged in the production of original news content which:
- 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 who deal at arm's length with the organization in the production of its content;
- it is not significantly engaged in the production of content:
- to promote the interests, or report on the activities, of an organization, an association or its members, or
- for a government, Crown corporation or government agency;
- it is not a Crown corporation, municipal corporation or government agency; and
- it is designated, at that time, by the Minister of National Revenue, or her delegated officials, who will take into account any recommendations made by the Independent Advisory Board on the Eligibility for Journalism Tax Measures.
Q3. When will the CRA accept applications for QCJO designation?
The CRA began accepting applications in December 2019. We launched the process for organizations to apply for QCJO designation through an application form and a guidance document, both of which have been updated in light of the proposed changes to the legislation. We encourage organizations to apply online by submitting their documents to the My Business Account portal during COVID-19.
Organizations that are unsure if they should apply can use the self‑screening tool: Qualified Canadian journalism organization – Eligibility.
Q4. Will a list of journalism organizations that have received QCJO designation be made publicly available? If an organization's application is denied, will the reason(s) for that denial be made publicly available?
The confidentiality provisions of the Income Tax Act (Act) prevent the CRA from disclosing the names of organizations that have applied for, received, or been denied QCJO designation. However, under section 241 of the Act, the CRA may release the names of registered journalism organizations (i.e. organizations that qualify for the qualified donee measure), and the names of organizations whose digital subscriptions meet the criteria for the digital news subscription tax credit along with the names of their subscriptions and the publications associated with the subscriptions listed on Canada.ca.
Q5. What recourse does a journalism organization have if its application for QCJO designation is denied?
Organizations whose applications for QCJO designation are not approved will be notified of the CRA’s decision by letter which will outline the reasons for the decision.
Organizations may submit a written request to the CRA for a review of the decision. The request should explain the organization’s concerns about the decision and provide additional information or supporting documents as appropriate.
An organization that continues to disagree with the decision following the review may file an application for a judicial review of the decision with the Federal Court of Canada.
Q6. Can an organization lose its QCJO designation?
On April 17, 2020, the Department of Finance proposed changes to the legislation that will provide a mechanism to allow the CRA to revoke an organization’s QCJO designation, where the organization no longer meets the requirements as set out in the Income Tax Act. The Minister’s powers to revoke a QCJO designation will be delegated to CRA officials, and will form part of a compliance function that works with QCJOs to help them understand the requirements and maintain their designation, where possible.
This proposed change will be administered by the CRA after Royal Assent is received.
Independent Advisory Board
Q7. As recommended by the Journalism and Written Media Independent Panel, will the Government be appointing an independent Advisory Board?
The Government appointed the Independent Advisory Board on Eligibility for Journalism Tax Measures (Advisory Board), whose role is to make recommendations on whether a journalism organization meets certain criteria for QCJO designation. Specifically, whether the organization produces original news content and uses journalistic principles and processes.
Members of the Advisory Board were selected with consideration given to the linguistic, cultural, and ethnic diversity of the country. The Advisory Board is composed of current and retired faculty members from post-secondary journalism schools across Canada.
Q8. Does this designation process require the independent Advisory Board?
The Income Tax Act provides that the Minister of National Revenue will take into account any recommendations made by a board established for this purpose, when rendering a final decision on QCJO eligibility.
Q9. Will the independent Advisory Board have the authority to designate organizations as a QCJO? Who has the final say in making the determination — the Minister, the CRA or the independent Advisory Board?
Pursuant to the Income Tax Act, the Minister of National Revenue has the power to designate organizations as a QCJO. The independent Advisory Board will make recommendations on certain criteria required for QCJO designation.
Q10. When will the independent Advisory Board begin to make recommendations?
With the establishment of the independent Advisory Board on March 24, 2020 and the legislative changes that were proposed on April 17, 2020, the CRA is now in a position where it can begin to deliver on the Government’s commitment to provide much needed support to journalism organizations. Now more than ever, a strong and independent news media is crucial to supporting an informed public and well-functioning democracy.
The CRA is looking forward to working with the independent Advisory Board and receiving its recommendations. The recommendation from the Advisory Board is a key element in the CRA being able to make decisions on files.
Canadian journalism labour tax credit
Q11. What is the refundable Canadian journalism labour tax credit?
The Canadian journalism labour tax credit, is a refundable tax credit that is available at a rate of 25% of the total qualifying labour expenditures for a tax year, in respect of eligible newsroom employees of a qualifying journalism organization (QJO), less any amount received from the Aid to Publishers component of the Canada Periodical Fund (Aid to Publishers) in the tax year. This tax credit can be claimed by a corporation, a partnership or a trust that is a QJO.
Q12. For the purposes of the Canadian journalism labour tax credit, what is a QJO?
Under the proposed changes, a QJO, at any time, means a qualified Canadian journalism organization (QCJO) that meets the following conditions:
- it does not hold a licence, as defined in subsection 2(1) of the Broadcasting Act; and
- if it is a corporation with share capital, it meets specific ownership conditions of a Canadian newspaper as defined in the Income Tax Act.
Q13. What is a qualifying labour expenditure?
A qualifying labour expenditure is the amount of salary or wages payable by a QJO to an eligible newsroom employee in respect of a period beginning on or after January 1, 2019, less the amount of any assistance received or entitled to be received in the year regarding that employee. As such, salary or wages that are in respect of a period before January 1, 2019, will not be a qualifying labour expenditure. In addition, salary or wages will be a qualifying labour expenditure of an organization only if they are in respect of a period throughout which the organization is a QJO.
A qualifying labour expenditure is subject to an annual cap of $55,000 (prorated for the number of days in the taxation year the organization is a QJO), per eligible newsroom employee. For example, an organization that ceases to meet the criteria to qualify as a QJO halfway through the taxation year would be subject to half the usual cap, per eligible newsroom employee.
Previously, the $55,000 limit was prorated if the organization has a short taxation year. Under the proposed changes, the $55,000 limit will also be prorated based on the number of days the organization qualifies as a QJO.
Q14. What is an eligible newsroom employee?
An eligible newsroom employee, in respect of a QJO in a taxation year, means an individual who:
- is employed by the QJO in the taxation year;
- works, on average, a minimum of 26 hours per week throughout the portion of the taxation year in which the individual is employed by the QJO;
- at any time in the taxation year, has been, or is reasonably expected to be, employed by the QJO for a minimum period of 40 consecutive weeks that includes that time;
- spends at least 75% of their time engaged in the production of original written news content, including researching, collecting information, verifying facts, photographing, writing, editing, designing and otherwise preparing content; and
- meets any prescribed conditions (currently there are no prescribed conditions).
Q15. How is the Canadian journalism labour tax credit calculated?
The Canadian journalism labour tax credit for a taxation year is calculated by applying a rate of 25% to the total amount of qualifying labour expenditure of the QJO in respect of all eligible newsroom employees less any amount received from the Aid to Publishers at any time in the year. Specifically, the Canadian journalism labour tax credit would be reduced for each dollar received from the Aid to Publishers. Further, the amount of qualifying labour expenditure in respect of an eligible newsroom employee will be limited to $55,000 (prorated for the number of days in the taxation year the organization is a QJO). This will generally provide a maximum tax credit of $13,750 per eligible newsroom employee per year.
Under the proposed changes, if a QCJO receives an amount from the Aid to Publishers at any time in the taxation year, that would not in and of itself disqualify the QCJO from being a QJO. However, it would reduce the Canadian journalism labour tax credit the QJO would otherwise be entitled to, by the amount it receives from the Aid to Publishers in that year. Previously, if a QCJO received any amount from the Aid to Publishers at any time in the taxation year, it would not qualify as a QJO and would not be eligible to claim the Canadian journalism labour tax credit.
Q16. How can a QJO that is a partnership claim the Canadian journalism labour tax credit?
Where a qualifying journalism organization is a partnership, the amount of the labour tax credit is divided between members of the partnership (qualifying members), other than members who are other partnerships or specified members of the partnership. The total amount of the tax credit will be calculated based on the relative specified proportions of each of the qualifying members of the partnership for the relevant fiscal period.
The proposed change clarifies the calculation of the Canadian journalism labour tax credit to qualifying members of a QJO that is a partnership.
Q17. If an organization is a QJO for a portion of the tax year, how will that affect the calculation of the Canadian journalism labour tax credit?
Salary or wages payable to an eligible newsroom employee will be a qualifying labour expenditure of an organization only if they are in respect of a period throughout which the organization is a QJO. The qualifying labour expenditure for an eligible newsroom employee is further subject to an annual cap of $55,000, prorated for the number of days in the tax year the organization is a QJO. Where an organization is a QJO for a portion of the year (i.e., less than 365 days), it will have to prorate its annual cap of $55,000 by the number of days it qualified as a QJO during that tax year, when calculating its qualifying labour expenditure.
For example, consider an organization with a January 1-December 31 tax year, that met the conditions of a QJO from January 1 to May 1, 2019 only (151 days). The organization had two employees, each with salary of $25,000 for the period it was a QJO. The annual cap per eligible newsroom employee will be $22,753 which is the $55,000 prorated for the number of days the organization is a QJO ($55,000 x (151/365). The qualifying labour expenditure per eligible newsroom employee is the lesser of $25,000 and $22,753; therefore, the total qualifying labour expenditure is $45,506 ($22,753 x 2). The amount of the Canadian journalism labour tax credit will be $11,376 (45,506 x 25%).
Q18. If a QJO receives an amount from the Aid to Publishers, is it eligible for the Canadian journalism labour tax credit?
Yes, a QJO that receives amounts from the Aid to Publishers during the tax year will be eligible to claim the Canadian journalism labour tax credit. However, the Canadian journalism labour tax credit that the QJO would otherwise be entitled to receive is reduced by the amount of funding received from the Aid to Publishers in the tax year.
For example, a QJO has a taxation year of January – December 31. It received a total of $10,000 from the Aid to Publishers on December 1, 2019. Its qualifying labour expenditure for the 2019 tax year is $50,000. The amount of the refundable labour tax credit is:
- (25% x $50,000) - $10,000 = $2,500 (This amount will be included in income).
If the QJO receives an amount from the Aid to Publishers during the tax year that is equal to or in excess of 25% of its qualifying labour expenditure ($12,500 in this example), its labour tax credit would be reduced to $0.
Amounts received from the Aid to Publishers will not be considered in the formula for calculating the qualifying labour expenditure for a QJO.
Q19. If a QCJO holds a licence, as defined in subsection 2(1) of the Broadcasting Act, is it eligible for the Canadian journalism labour tax credit?
Where a QCJO holds a licence, as defined in subsection 2(1) of the Broadcasting Act, during the tax year, it will not qualify as a QJO for that period of the tax year. Therefore, it would not be eligible to claim the Canadian journalism labour tax credit for that part of the year that it was not a QJO.
Q20. If a QJO received an amount under the new Canada Emergency Wage Subsidy (CEWS) and/or the 10% Temporary Wage Subsidy (TWS) in a tax year, will these amounts reduce the Canadian journalism labour tax credit?
Yes. The Canadian journalism labour tax credit is 25% of a QJO’s qualifying labour expenditures. Qualifying labour expenditure is defined in respect of an eligible newsroom employee and is generally the salary or wages payable to the employee. However, the qualifying labour expenditure is decreased by any government assistance received in respect of an eligible newsroom employee. CEWS and the TWS are considered government assistance and therefore the qualifying labour expenditure in respect of an eligible newsroom employee must be decreased by the CEWS received and TWS claimed or intended to be claimed in respect of that employee.
For example, a QJO received a total of $4,000 in CEWS and claimed $500 TWS in respect of one of its eligible newsroom employees whose salary was $25,000 for the period during which it qualified as a QJO. The qualifying labour expenditure in respect of that employee is $20,500 ($25,000 - $4,500). Therefore, the Canadian journalism labour tax credit for the QJO in respect of that employee would be $5,125 ($20,500 x 25%).
Q21. How soon after being designated as a QCJO can organizations claim the Canadian journalism labour tax credit?
The Canadian journalism labour tax credit is effective from January 1, 2019. Organizations that have been designated as a QCJO and that are a QJO, may claim this tax credit by providing certain information with their income tax returns. Please refer to the Guidance on the income tax measures to support journalism for details. Eligible organizations are therefore encouraged to file their income tax returns with the required information on or before the due date for filing their income tax returns to claim this tax credit.
Digital news subscription tax credit
Q22. What is the digital news subscription tax credit (DNSTC)?
The DNSTC is a non-refundable tax credit for amounts paid by individuals after 2019 and before 2025 for qualifying subscription expenses.
Q23. What is a qualifying subscription expense?
A qualifying subscription expense is the amount the subscriber paid in the year for a digital news subscription with a QCJO that does not hold a licence as defined in subsection 2(1) of the Broadcasting Act.
A digital news subscription is an agreement entered into between an individual who is a subscriber, and the QCJO, that entitles the subscriber to access content of the QCJO in digital form that is primarily original written news.
Q24. How do organizations determine if the subscriptions they offer are qualifying subscriptions for the purposes of the DNSTC?
As a result of proposed amendments announced by the Department of Finance on April 17, 2020, a new form, T622, Digital News Subscription Tax Credit, and process will be published to allow organizations to seek confirmation that the digital subscriptions they offer are eligible as qualifying subscriptions. The names of organizations, which digital subscriptions are eligible qualifying subscriptions, and the publications associated with such subscriptions will be published by the CRA on its webpages.
The review of whether an organization’s subscriptions are qualifying subscriptions will be undertaken by the CRA, in consultation with the Advisory Board.
Organizations can submit form T622, Digital News Subscription Tax Credit, either at the time that they apply for designation as a QCJO, or at a later date.
The application form can be submitted to the CRA through My Business Account or can be mailed to:
Canada Revenue Agency
Place de Ville, Tower A
320 Queen Street
Ottawa ON K1A 0L5
Journalism organizations are encouraged, if possible, to apply for the journalism measures by submitting their documents to the My Business Account portal during the COVID-19 pandemic, to help facilitate a timely receipt and review of their materials given current constraints on resources.
Q25. How do individuals know which organizations offer qualifying subscriptions?
Individuals wanting to know if their digital news subscription is eligible as a qualifying subscription expense can check the Canada.ca webpages which will contain the names of organizations, which digital subscriptions are eligible qualifying subscriptions, and the publications associated with such subscriptions.
Organizations whose subscriptions cease to qualify for the credit are required to inform subscribers. Existing subscriptions whose names have been published on Canada.ca as eligible subscriptions will continue to qualify until the end of the year in which the CRA updates the webpage to indicate that the subscription is no longer eligible.
Q26. How will an individual claim the DNSTC?
Individuals who are subscribers and have entered into an agreement with a QCJO for a digital news subscription can claim the DNSTC on their personal income tax and benefit return for the years 2020 to 2024.
Q27. How will the credit be calculated?
The maximum credit will be calculated by multiplying the lowest personal income tax rate (15%) by the total of all amounts the subscriber paid for qualifying subscription expenses in the year up to $500.
Q28. Can the claim be shared?
Only the individual(s) who entered into the agreement can claim the credit. If more than one individual is entitled to claim the qualifying subscription expense for a year (i.e. spouses, roommates, etc.), the total amount can be split between them, provided that the total amount claimed is not more than the maximum amount that would be allowed if only one of them made the claim.
Q29. Can an individual make a claim for more than one digital news subscription?
Individuals can claim the total of all amounts paid for qualifying subscription expenses in the year, up to a maximum of $500. However, if the digital news subscription provides access to content in non-digital form or content other than content of the QCJO, only the cost of a stand-alone digital subscription to the content of the QCJO will be an eligible expense. If there is no stand-alone subscription, then only one half of the amount paid is an eligible expense.
Qualified donee status
Q30. What are the benefits associated with becoming a registered journalism organization (RJO)?
RJOs are tax-exempt and can issue official donation receipts for eligible gifts they receive from individuals or corporations. In addition, since RJOs are qualified donees, the Income Tax Act allows registered charities to make gifts to RJOs.
In addition, an RJO that is also a QJO may be entitled to this tax credit in respect of its qualifying labour expenditure.
Q31. What are the eligibility requirements for registration as an RJO?
To be eligible for registration as an RJO, a journalism organization must apply to the CRA in prescribed form and demonstrate that it meets the following requirements:
- it must be designated as a QCJO;
- it must be a corporation or a trust;
- it must be constituted and operated for purposes exclusively related to journalism;
- any business activities it carries on must be related to its purposes;
- it has trustees or a board of directors, each of whom deals with each other at arm's length;
- it cannot be controlled, directly or indirectly in any manner whatever, by a person or group of persons that do not deal with each other at arm's length;
- generally, in a tax year, it cannot accept gifts from any one source that represent more than 20% of its total revenues (including donations);
- no part of its income may be payable to, or otherwise available for the personal benefit of a proprietor, member, shareholder, director, trustee, settlor or like individual; and
- must primarily be engaged in the production of original news content.
Q32. Will RJOs have annual filing requirements with the CRA?
RJOs will be required to file annual information returns, public information returns and financial statements with the CRA. The returns will require the RJOs to provide information on their activities, revenue, expenditures, assets, and liabilities. They will also be required to disclose, in their public information returns, the name(s) of any donors that made donations totaling over $5,000 during the fiscal period and the amount of those donations.
Q33. What are the obligations for RJOs to maintain their registration?
To maintain its registration, an RJO must continue to meet the eligibility criteria for registration, along with its other obligations as a qualified donee under the Income Tax Act. Specifically, an RJO must:
- file an annual information return and public information return containing information on its activities and the name(s) of any donors that make donations of over $5,000 and the amount donated;
- keep proper books and records that demonstrate that it continues to meet the requirements under the Income Tax Act and provide these to the CRA on request;
- ensure that any official donation receipts issued meet the requirements of the Income Tax Act;
- not be factually controlled by a person or a group of related persons; and
- generally not receive gifts that represent more than 20% of its total revenues for a given fiscal period, including donations, from any one source.
Q34. Under what circumstances can an RJO receive a donation that exceeds 20% of its revenues for a given fiscal period?
In a tax year, an RJO may not receive a gift from any one source that represents more than 20% of its total revenues, unless the gift was:
- made by way of bequest;
- made within 12 months after the organization is first registered as an RJO; or
- approved, on a case-by-case basis, by the Minister of National Revenue.
Q35. What actions may the CRA take if an RJO ceases to meet the requirements for registration as a qualified donee?
Where an RJO no longer meets, or fails to comply with, the requirements for registration, the CRA may use one of several compliance tools, including education letters, sanction or revocation of registration. The severity of the non-compliance will determine which action the CRA will take. If a journalism organization's registration is revoked, it will no longer be exempt from income tax and will no longer be entitled to issue official donation receipts. Its status will also be listed on the CRA's website as revoked.
Q36. What recourse does an RJO have if the CRA proposes to revoke its registration?
Where the CRA proposes to revoke the registration of an RJO, it may file an objection with the Appeals Branch of the CRA. If the organization disagrees with the decision of the Appeals Branch, it has the right to appeal the decision to the Federal Court of Appeal.
Q37. Will the list of RJOs be publicly available?
The name, registration number, registration status, and effective date of status of all RJOs will be listed on the CRA's website, similar to registered charities and other types of qualified donees.
Q38. Where can I find more information on RJOs?
For additional information on RJOs, as well as the two other tax measures to support Canadian journalism, go to Supporting Canadian Journalism.
For general information
Q39. Where can I find more information about the tax measures?
The CRA provides the latest information on Canada.ca. Taxpayers should check online regularly for updated forms, policies, guidance, guidelines, and questions and answers.
Report a problem or mistake on this page
- Date modified: