Reform tax laws, tweak CBC to bolster media landscape: PPF

Phasing out CBC/Radio-Canada’s sale of digital ads and tweaking tax laws to prevent companies from claiming exemptions for advertising on foreign digital platforms are among the recommendations put forward by the Public Policy Forum following a six-month study on the state of Canadian news media. In a report released Thursday, the Canadian think tank made a dozen recommendations “aimed at ensuring the news media and journalists continue in their role as the watchdogs over our elected representatives and public institutions and the connective tissue within our communities,” it said in a press release. Among the recommendations is one echoed in a release from Friends of Canadian Broadcasting on Monday, suggesting a reform to the Income Tax Act to extend the rules as they currently apply to foreign print and broadcast media to Internet platforms, with some exceptions. “The current situation is neither fair nor sensible: A Canadian advertiser cannot deduct expenses when buying space in The New York Times but can when placing an ad on nyt.com,” the report said. “Similarly, expenses for advertising on a border TV station cannot be deducted but can be if on YouTube.” In the report, the forum cautioned it wouldn’t “as straightforward” to extend the rules to the Internet as it was to broadcast in the 1970s. “In that case, there were a finite number of outlets, and those advertising on U.S. border stations could easily substitute Canadian stations and still reach the same audiences, especially with the accompanying policy of simultaneous substitution,” it said. A recommendation is also made to reform tax laws “so as to subject GST/HST subscription and advertising revenue in companies not compliant with new Section 19 requirements, thus levelling the playing field. The existing arrangement discriminates against Canadian news media in providing better tax treatment to foreign companies. (This measure applies equally to the so-called Netflix tax.)” In November, representatives from Google Canada appeared in front of a House of Commons committee as part of its study on media and local communities and refuted the idea that it was “grabbing” revenue and subsequently hurting publishers, arguing that applying sales tax would ultimately harm small businesses. “The fate of Google and the publishing industry are inextricably linked. We share a common mission and believe an open press and healthy news industry plays a critical role in our democracy,” Aaron Brindle, Google Canada’s head of public affairs, said in an email statement Thursday. “By sharing revenue, driving traffic and supporting innovation, we see ourselves as partners to the news industry in delivering on this important mandate in the digital age.” The report also calls for changes at the CBC so that it focuses more on the “inform” plank of its mandate to “inform, enlighten and entertain.” “This includes paying particular attention to civic-function news, which may not attract the biggest audience but must be a public broadcaster’s raison d’être in a digital age,” it said. The study recommends freeing the CBC’s website “of the need to ‘attract eyeballs’ for digital advertising,” and suggests a one-year phase-out period to stop selling digital ads. However, the report also notes that the $25 million in revenue freed up by removing CBC from the digital ad space has less to do with those who may inherit it, saying that “little will go to newspaper publishers,” but rather more to do with “freeing CBC from the traffic-maximizing, clickbait mentality that devalues serious journalism.” CBC boss Hubert Lacroix has also said ending CBC’s digital ads won’t help its competitors. Going totally ad-free would require a 35-per-cent boost to its budget, the CBC said in its submission to the heritage minister’s cultural review. The report suggested CBC should also switch to publishing its news under a Creative Commons licence so that it can move towards being “a universal public provider of quality journalism,” as well as maximize its reach. In a statement Thursday, CBC said the concept of putting its news content under a Creative Commons licence “needs further study, particularly given the growing concern over the accuracy and behavior of some online sites. Canadians need to know they can trust the integrity of CBC/Radio-Canada journalism.” Public Policy Forum’s report, which was partially funded by Canadian Heritage and Innovation, Science and Economic Development Canada, was informed by “study and discussions with close to 300 people,” the release said, as well as “exclusive public opinion research by Allan Gregg of Earnscliffe Strategy Group” who “conducted focus groups and surveyed more than 1,500 adult Canadians about their perceptions of the relationship between news and democracy, their trust of journalists and their level of awareness of the disruption of the media business.” — With reporting by Charelle Evelyn at cevelyn@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Reform tax laws, tweak CBC to bolster media landscape: PPF

Broadcast | January 26, 2017

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Reform tax laws, tweak CBC to bolster media landscape: PPF

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