Today, the Quebec government announced tax measures to support print media companies, as the finance department’s publication titles it. It estimates the cost at about $50 million a year by 2023-24.
Here’s what it contains (I’ve bolded key terms):
New wage tax credit
The main measure is a new refundable 35% tax credit for “corporations that produce and disseminate print media that are recognized as eligible media.”
Calculated on employee wages, the credit is capped to a maximum of $26,250 per employee, retroactive to Jan. 1, 2019.
Eligible corporations are those that own eligible media at least a year old that “must consist in the production and daily or periodic dissemination (at least 10 times a year) — by means of a print publication, an information website or a mobile application dedicated to information — of original written information content” as described below.
The following are specifically not eligible for the tax credit:
- Corporations exempt from income taxes
- Crown corporations like the CBC
- Broadcasting corporations (radio or television)
To be eligible, a publication must produce “original written information content, which must pertain to general interest news, be specifically intended for the Québec public and cover at least three of the following information topics”:
- municipal affairs
- international sector
- business and the economy
- local interest news
- miscellaneous news items
Content that doesn’t meet that standard includes:
- content from a press agency or another media
- specialized content pertaining to a type of personal, recreational or professional activity and geared specifically towards a group, association or category of persons
- content for which a compensation is paid by a third party or a partnership
- content of an advertising or promotional nature, such as an advertorial
- theme-based content on, for example, hunting and fishing, decoration or science
So publications that mainly consist of press releases or sponsored content, or are geared toward specific hobbies and consumers, are not eligible. But publications that have some of this content might still be eligible. It says only that this content must be “on an incidental basis” and provides no quantitative measure.
To be eligible, an employee the tax credit is applied to must:
- “report for work at an establishment situated in Quebec” or outside Quebec if 75% of employees work in Quebec
- not be a shareholder of the company or partnership, or a member of a coop having more than 10% of voting rights
- works at least 26 hours a week for at least 40 weeks
- devote at least 75% of their time to “directly undertaking or supervising activities relating to the production of original written information content for dissemination purposes” or “the carrying out of information technology activities related to the production or dissemination of such content.”
- information gathering
- fact checking
- other content-preparation activities
- management or operation of computer systems, application or technology infrastructure
- operation of a customer relations management service
- management or operation of a marketing information system designed to raise the visibility of the media and promote it to an existing or potential clientele
- any other activity of a similar nature that could be called a management or operating activity for the purposes of the eligible media
- tasks related to digital conversion activities of a print media
- administrative tasks of an individual
- operations management
- legal affairs
- public relations
- contract prospecting
- human and material resources management
Digital transformation tax credit
The refundable tax credit for digital transformation of print media, announced in 2018 under the Couillard government, will be extended a year until Dec. 31, 2023. The 35% tax credit, also applied to wages, has similar eligibility criteria for the corporations, and a maximum of $7 million a year.
Extension of aid programs
Existing programs to support written news companies will be extended to 2023-24 and enhanced. No details were provided.
Full exemption from recycling tax
Taxes imposed on newspapers to compensate for the costs of recycling what they print will be effectively eliminated by increasing support to RecycleMédias to completely offset those costs.
The government is also announcing that its advertising placement policies will be reviewed to “better support regional media.” No details were provided.