Canada's Original Think Tank

Question period – Broadcasting Tax Policy

Question period – Broadcasting Tax Policy

Question period – Broadcasting Tax Policy

Hon. Dennis Dawson: 

Minister, I should mention that at this morning’s meeting of the Standing Senate Committee on Transport and Communications, we discussed Close the Loophole! The Deductibility of Foreign Internet Advertising, the report prepared by the Friends of Canadian Broadcasting.

First of all, congratulations on your announcement. Good news is always welcome. We are thrilled to hear it, but we still need to wait 18 months for a report to be released and then for a bill to be introduced.

In the meantime, we know that the Income Tax Act contains a loophole that, as my colleague, the Honourable Senator Joyal, said, allows companies like Google and Facebook to keep $70 million in advertising revenue. These ads used to appear in newspapers and on various Canadian broadcasting networks. Now, the tax deductibility these companies enjoy encourages them to advertise in the United States instead of through Canadian newspapers and broadcasters.

All we want is for this privilege to be eliminated so that this advertising revenue can be reinvested in Canada. I understand that this is an area of shared jurisdiction with the Department of Finance, but we think it is important to deal with this issue as quickly as possible, in the hope of getting a report in 18 months.

Hon. Mélanie Joly, P.C., M.P., Minister of Canadian Heritage: I thank my Senate colleague for his question. We are in the process of modernizing three laws, namely the Broadcasting Act, the Telecommunications Act, and the Radiocommunication Act. These acts alone represent a $67-billion industry employing hundreds of thousands of people. Giving an expert panel 18 months to come to grips with these laws is very ambitious. We’ve asked the country’s top experts to come up with solutions that essentially focus on the 14 priorities set out in the panel’s terms of reference. The panel includes experts like Janet Yale, Monique Simard, Pierre Trudel and Peter S. Grant.

In addition, I understand my colleague’s concerns regarding the media. We have been working proactively on this file. First of all, we reinvested $675 million in CBC/Radio-Canada. Our public broadcaster now has journalists on the Magdalen Islands and in southern Ontario, that is, in areas that did not have journalists in the past.

Second, our latest budget included $50 million to support journalism in underserved communities and areas where there is no longer much local media. We also included $14 million for local media in official language minority communities as part of our Roadmap for Canada’s Official Languages and the Action Plan for Official Languages. This is the first time any funding has been allocated to community radio stations through the Action Plan for Official Languages.

Finally, in collaboration with my colleague, the Minister of Finance, on this file, we put a plan in place to help the media adopt new models that will enable them to accept philanthropic donations and get through the digital shift.