Canada’s proposed tax break on digital subscriptions

Canadian government supports news media transition

116

Canada’s Finance Minister announced C$ 595 million (about Rs. 3,184 crores) in tax incentives in November 2018 aimed at helping Canadian news publishers’ offset labour costs associated with reporting, in addition to tax credits for people who subscribe to digital news services.

In the latter initiative, tax payers would receive a non-refundable deduction of 15% for their digital subscriptions. Details of the proposals are still being defined.

The tax credit is one of three aspects of a C$ 595-million initiative with the objective of a five-year boost for the ailing media industry promised by finance minister Bill Morneau in November 2018 fall fiscal update, according to CBC News. The tax credit will be worth 15% of the cost of a subscription, although Finance Canada spokesman Jack Aubry says the actual dollar amount someone saves will depends on the cost of a subscription.

According to Aubry the government believes the tax credit is needed to encourage more Canadians to subscribe to online news and help media organizations transition to a more sustainable business model.

Several countries, including the USA, the UK and Australia, for example, either do offer, or have offered, tax payers deductions for subscriptions of periodicals that directly relate to their work – such as for professional journals, and sometimes even newspapers if they are intended for use at a business.

Canada’s proposals appear to be the first of their kind, reports WAN-IFRA. However, there is already some debate in Canada over whether government intervention is necessary or even a good idea. David Skok, the CEO and editor in chief of The Logic, is critical of the government’s plans. John Hinds, president and CEO of News Media Canada, the national association of the Canadian news industry, told WAN-IFRA that he welcomes the plan.

“We believe that it will be a valuable tool to encourage people to subscribe to publications. As you know, it is hard to get people to pay for our products. We also believe it will be a good marketing tool,” said Hinds. “The subscription tax credit also fits in with the other measures the government has announced,” he added.

“They have expanded the charitable status definition to allow news media to set up charitable foundations to receive donations. . . . The big item in the announcement and the substantial investment is the journalism tax credit. This will allow publications to deduct a percentage of eligible journalism costs,” — John Hinds.

2023 promises an interesting ride for print in India

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. While the print and packaging industries have been resilient in the past 33 months since the pandemic lockdown of 25 March 2020, the commercial printing and newspaper industries have yet to recover their pre-Covid trajectory.

The fragmented commercial printing industry faces substantial challenges as does the newspaper industry. While digital short-run printing and the signage industry seem to be recovering a bit faster, ultimately their growth will also be moderated by the progress of the overall economy. On the other hand book printing exports are doing well but they too face several supply-chain and logistics challenges.

The price of publication papers including newsprint has been high in the past year while availability is diminished by several mills shutting down their publication paper and newsprint machines in the past four years. Indian paper mills are also exporting many types of paper and have raised prices for Indian printers. To some extent, this has helped in the recovery of the digital printing industry with its on-demand short-run and low-wastage paradigm.

Ultimately digital print and other digital channels will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future. For instance, there is no alternative to a rise in textbook consumption but this segment will only reach normality in the next financial year beginning on 1 April 2023.

Thus while the new normal is a moving target and many commercial printers look to diversification, we believe that our target audiences may shift and change. Like them, we will also have to adapt with agility to keep up with their business and technical information needs.

Our 2023 media kit is ready, and it is the right time to take stock and reconnect with your potential markets and customers. Print is the glue for the growth of liberal education, new industry, and an emerging economy. We seek your participation in what promises to be an interesting ride.

– Naresh Khanna

Subscribe Now

LEAVE A REPLY

Please enter your comment!
Please enter your name here