Independent Advisory Board on Eligibility for Journalism Tax Measures - Annual Report 2023-2024

Message from the Minister of National Revenue

Independent journalism fosters transparency, accountability, and an informed citizenry, serving as a cornerstone of Canadian democracy. Canadians depend on local journalism for accurate and timely information about their communities and global events. An independent press also ensures that diverse viewpoints enrich public discourse.

The advent of digital media and artificial intelligence have posed significant challenges to Canadian print media in recent years. The journalism industry is now driven by innovation and adaptation as it navigates a rapidly changing technological, economic and social environment. Through its tax measures, the Government of Canada is committed to supporting the Canadian press in this complex environment, and the Independent Advisory Board on Eligibility for Journalism Tax Measures (the Board) plays a crucial role in recommending to the Government which organizations are eligible for the qualified Canadian journalism organization designation.

By offering independent recommendations, the Board helps uphold the integrity of the industry, safeguards public access to credible, reliable and original news content, and strengthens trust in Canadian journalism practices. Its annual report highlights the Board’s significant contributions over the past year.

I extend my heartfelt thanks to the Board members for their unwavering dedication, expertise, and the considerable time they have invested in supporting the Canadian journalism industry.

The Honourable Marie-Claude Bibeau, P.C., M.P.
Minister of National Revenue

Word from the Chair

During its fourth year of operations, the Board welcomed two new members, Bob Cox and Linda Hughes, both of whom bring a wealth of experience in journalism, newsroom management and various leadership roles. Their knowledge and perspective have been invaluable in assessing applications for QCJO designation, as well as decision review requests. In particular, they have helped the Board and the CRA to refine their processes, especially in determining whether organizations are engaged in the production of original news content.

It is worth mentioning that since the inception of the tax measures to support Canadian journalism organizations, more than 75% of the Board’s recommendations have been positive. The Board is also pleased to report that it has seen improvement in news content in reapplications by organizations which had previously been denied QCJO designation.

Through its review of applications and constant monitoring of the rapidly evolving media landscape, the Board continues to observe changes and challenges in the industry.

Trust in media is at historic lows, driving home the need for media that adhere to journalistic processes and principles as outlined under the Guidance on the income tax measures to support journalism^{Footnote 1} .  A recent report^{Footnote 2}   recommends that policymakers in the United States “look to Canada for guidance” in developing tax incentives for journalism. The labour tax credit has been especially helpful to news organizations, according to these statements cited in the report:

It’s impossible to say that it has not made a significant positive impact on us.

It’s definitely been meaningful for us.

In August 2023, Meta started to block all news links on its social media platforms Facebook and Instagram. This response to Canada’s Online News Act has especially affected local and regional news sources, as well as Indigenous media, whose online traffic relies on these services. Designation as a QCJO will make organizations eligible for compensation through this new Act.

Closures of local news outlets continue, leaving some communities without independently reported news, as media companies struggle to build new revenue models to support journalism. At the same time, innovative enterprises are developing new ways of organizing and funding journalism in the digital age. The QCJO program has played a role in the efforts of legacy media to adapt and the work of new media to establish themselves while producing valuable news content for Canadians.

Since it began its work in 2020, the Board has held its meetings virtually. The Board members welcomed the opportunity in October for in-person meetings with the Minister and the CRA to discuss the Board’s work and the future of Canadian journalism. The Board is grateful to the CRA team for its efficient onboarding of new members and its expert advice and questions.

Colette Brin

Introduction

The Board’s mandate is to provide independent assessments and written, non-binding recommendations to the Minister on whether journalism organizations meet certain criteria as set out in paragraph (b) of the definition of QCJO in subsection 248(1) of the Act. The QCJO designation is a prerequisite to be eligible for the tax measures aimed at supporting Canadian journalism.

The three tax measures introduced by the Government in Budget 2019 are:

The Board met 18 times virtually and once in person during the 2023-2024 fiscal year.

This annual report covers the Board’s fourth year, namely, the period from April 1, 2023, to March 31, 2024. To view the previous annual reports, visit canada.ca/journalism-advisory-board.

Board members

Board members have expertise drawn from their work in the journalism industry and as current and retired faculty members from post-secondary journalism schools across Canada.

In September 2023, the Board welcomed two new members, Bob Cox and Linda Hughes. Their expertise and insights have brought a fresh perspective to the Board’s activities.

The Board Chair participated in the government’s open, transparent, and merit based selection process to identify potential candidates for future opportunities with the Board. The selection process was launched in October 2023 and concluded in March 2024 with new appointments expected in the 2024-2025 fiscal year.

To ensure the continuity of institutional knowledge and avoid delays in processing cases, the terms of Kim Kierans and Margo Goodhand were renewed in March 2024 by the Governor in Council for a period of six months.

Colette Brin
Chair

• Professor, Département d’information et de communication, Université Laval, Québec
• Director, Centre d’études sur les médias, Québec
• Former journalist, La Liberté and Radio-Canada, Manitoba

Kim Kierans
Vice-Chair

• Inglis Professor Emerita, School of Journalism, University of King’s College, Halifax
• Senior Fellow, Massey College, University of Toronto
• Board member, Asian Center for Journalism
• Former reporter and editor, CBC Radio

Margo Goodhand

• President, Michener Awards Foundation, Ottawa
• Former Governor, National Newspaper Awards
• Former Editor, Winnipeg Free Press
• Former Editor, Edmonton Journal

Bob Cox

• Former publisher of the Winnipeg Free Press
• Former Chair of News Media Canada
• Returning officer for the federal electoral district of Winnipeg North
• Chair of The Convalescent Home of Winnipeg

Linda Hughes

• Former publisher and President of the Edmonton Journal
• Former Board member of the Torstar Corporation
• Former Chancellor of the University of Alberta
• Former Chair of the National Newspaper Awards

The year in review

Statistics

Requests for recommendation received by the Board in 2023-2024

Between April 1, 2023, and March 31, 2024, the Board reviewed 28 requests for recommendation, which included both initial applications and reapplications for QCJO designation, as well as decision review requests.

Number of publications represented by the cases reviewed by the Board

The total number of publications reviewed by the Board typically exceeds the number of cases reviewed, as many organizations produce more than one publication.

Breakdown of requests by language of application

Of the 28 requests for recommendation received by the Board, 22 applications for QCJO designation were submitted in English and 6 were submitted in French. The recommendations of the Board are prepared in the language of the application.

Average processing times

The CRA no longer assigns a complexity level to cases. Although the processing timelines are no longer quantifiable based on the complexity of cases (low, medium, and high), the time required to review each case remains dependent on the type of the applicant organization (corporation, society, cooperative, partnership, or trust), the number of publications the organization produces, publications in languages (other than English and French) requiring translation, and whether the organization has an audio-visual and/or podcast element in its news content. Over the 2023-2024 fiscal period, the Board required on average 22 calendar days to complete its assessments of cases and issue written recommendations to the CRA.

Advisory input

As indicated in the Order in Council outlining the Board’s mandate, the Board also provides advice on matters relating to the journalism tax measures that the Minister (CRA) refers to it.

Policy

This year, the Board supported the Minister by advising the CRA in its approach to:

• determining the effective date of QCJO designation,
• determining publication timeframes when selecting a sample of content,
• processing cases when amalgamations or mergers of organizations occur.

Operational

This year, in its work the Board advised the CRA and the Minister on:

• the onboarding of the new Board members, Linda Hughes and Bob Cox,
• the skill set required for new Board members,
• ways to improve the program to benefit media outlets during the in-person meeting with the Minister and CRA.

Assessment criteria and considerations

In all aspects of their work, the Board members ensure the confidentiality of the information they have access to, as they are bound by the confidentially provisions of the Income Tax Act, the Access to Information Act, and the Privacy Act.

In order to provide its recommendations, the Board reviews a sample of the applicant organization’s publications (in print and/or online). The content may be submitted by the organization, or where not provided, is chosen by the CRA and/or Board members. As per the Board’s mandate, it provides an independent assessment on the following criteria as per the definition of QCJO under subsection 248(1) of the Act:

• Is the organization engaged in the production of original news content on an ongoing basis?
• Does the organization regularly employ two or more journalists who deal at arm’s length with the organization in the production of its content?
• Is the organization significantly engaged in the production of content for certain government entities or of content promoting the interests of, or reporting on the activities of, certain persons or organizations?

In selecting the content to review, the Board and the CRA take into consideration different times of the year to determine if the organization is producing original news content on an ongoing basis. Typically, slower periods of news production are avoided, such as the summer months and the end of the calendar year.

The Board’s recommendations are framed within the wording of the Act, and with the administrative considerations set out in the Guidance, in particular, the sections defining original news content.

The Board also assesses decision review requests. Decision review occurs when an organization that was denied QCJO designation requests that the CRA reconsider its decision. An organization that makes such a request submits information, documents and/or content to address the reasons for denying the designation as set out in the decision letter. The Board then reassesses the application, with a focus on the clarifications provided by the organization to determine if the requirements are now met.

Conclusion

The Board recognizes Canada’s news media are struggling to find new models of funding; to connect with new audiences; and to create relevant, credible content in an unprecedented age of disinformation and distrust in what they do.

Along with those fundamental business challenges, our news organizations are now exploring the pros, cons, and significant impact of AI systems on the trade. AI tools can be used to summarize and analyze massive data sets and produce new information and content – a highly useful tool for investigative journalists. Larger news organizations can develop their own content-recommendation algorithms to personalize users’ news experience and give citizens access to a diversity of stories and viewpoints. However, the use of AI in newsrooms raises important ethical issues and implications regarding the production of original news content. The Board will be cognizant of AI factors in its ongoing assessments.

As the Board enters its fifth year, members look forward to continuing their work with the CRA to deliver tax measures that support journalism organizations across Canada as they give voice to their communities, help inform, engage and connect their citizens, and contribute to creating a healthier society.

Abbreviations and acronyms

For ease of reference, the following are used in this report:

References