Media outlets must provide general news coverage and receive certification from an independent expert panel if they hope to access new federal tax incentives, the 2019 budget reveals.

The Liberal government announced last fall that it would provide almost $600 million over five years in incentives to Canada’s ailing news media. The measures would allow some qualified outlets to receive a 25 per cent refundable tax credit on newsroom salaries and issue a 15 per cent tax credit to digital subscribers. They would also create access to charitable tax incentives for not-for-profit journalism.

According to figures in the 2019 budget, the measures will cost $45 million in 2019-20 before rising to $165 million in 2023-2024, at which point they will total $595.

To qualify for any of the measures, organizations must be deemed a Qualified Canadian Journalism Organization (QCJO) by an independent panel of experts, that the government is proposing be created, reads the budget document, released on Tuesday. The budget says that Canadian citizens must own 75 per cent of corporations that qualify. Corporations must also be based in Canada, and its chairperson, as well as 75 per cent of its directors, must be Canadian citizens.

The primary production of QJCOs must be original news content and publications with a narrow reporting focus won’t qualify. The budget mentions industry, sports, recreation, lifestyle and entertainment-specific publications as non-qualifiers.

QJCOs must also employ two or more journalists, which must operate at “arm’s length” from the organization.

Organizations would also be disqualified from being registered as a QJCO if they “significantly” promote someone’s interests, produce content for a government, a government agency or a Crown corporation, or if they promote goods or services, according to the budget. Crown corporations, municipal corporations and government agencies all can’t qualify as a QJCO either.

The first part of the government’s journalism relief program is to allow them to register as donees, similar to charities. QJCOs will be able to receive cash amounts as gifts, which they can issue tax credits to donors. QJCOs must meet further qualifications to successfully apply to the Canada Revenue Agency to become a qualified donee. QJCOs qualifying for this measure must be functionally similar to a non-profit, in that profits can’t be distributed to anyone connected to the organization for their personal benefit. Qualified donee journalism organizations must also be required to have a board of directors or trustees who aren’t connected to each other, as well as not be factually controlled by a person or group. In total, gifts from one source can represent no more than 20 per cent of a donee’s total revenues. Similar to charities, donee-qualified journalism organizations must make public the names of any donors who give more than $5,000.

Allowing organizations to become donees will cost the government $96 million over five years.

The second measure introduced in the budget is tax credits of up to $13,750 per reporter, editor or researcher who works at least 26 hours a week for QCJOs. Broadcasters aren’t eligible to receive this credit and neither are publicly-traded QCJOs that aren’t controlled by Canadian citizens. The Finance Department estimates the labour tax credit will cost the government $360 million over four years.

The final part of the government’s support for news organizations is to offer a personal income tax credit to Canadians who buy digital subscriptions. The credit of 15 per cent will allow individuals to claim up to $500 in costs paid towards subscriptions to QCJO each year, for a maximum credit of $75. Broadcasters’ subscriptions don’t qualify for this credit either. In the case of a combined digital and print subscription, individuals can only claim the digital portion. The Finance Department estimates this will cost the government $138 million.

According to the budget, QJCOs can receive the labour tax credit this year, but organizations will not be able to register as donees and individuals won’t be able to receive their tax credit for a news subscription until next year. The subscription credit is temporary and will end in 2025.

Follow @CharliePinkerto