OTTAWA—The federal government is giving a tax break to digital news subscribers, a refundable tax credit to news outlets and will allow non-profit media organizations to give charitable receipts to donors, all to help journalism in Canada.

The measures — which critics said would erode journalistic independence — were outlined in Wednesday’s economic update and will cost a total of $595 million over five years.

“We’ve made some investments to ensure that we continue to have an important free press to ensure that we have a strong and healthy democracy,” Finance Minister Bill Morneau told reporters.

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Under Wednesday’s measures, the government will introduce:

A temporary, non-refundable tax credit that will allow subscribers to claim 15 per cent of the cost of subscriptions of eligible digital news media. This is meant to help support digital news organizations in achieving a “more financially sustainable business model.”

A new category of “qualified donee” for non-profit journalism organizations that will, in essence, give them charitable status to issue receipts for donations from both individuals and corporations. And it will open the door for foundations to provide financial support. This measure builds on a pledge in the 2018 budget to explore new models to enable private giving and philanthropic support for journalism.

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A refundable tax credit for qualifying news organizations that “produce a wide variety of news and information of interest to Canadians.” The tax credit will apply to the labour costs associated with producing original content and will be open to both non-profit and for-profit news organizations. The measure will allow outlets to claim a portion of their labour costs. An independent panel drawn from the news industry will be established to define eligibility of the measure, which will take effect Jan. 1, 2019.

The finance department said that it is expected to provide more details on the measures in the next budget.

The action is a response to calls from the news industry for assistance in the face of dramatic declines in ad revenue that have forced layoffs and the closure of more than 200 news outlets. News outlets have sought government aid to help with the transition to new digital business models.

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John Honderich, chair of Torstar, the parent company of the Toronto Star, praised the actions outlined in the economic update.

“I am very encouraged by these positive steps. They should significantly help the media sector as it transforms to a sustainable digital future,” Honderich said in a statement.

John Hinds, president and CEO of News Media Canada, which represents 800 daily, weekly and community newspapers, called the measures “substantive.”

“They listened to us in terms of the types of investments, they focussed it on journalism,” he said in an interview after the update had been released.

“There’s lots of details to be worked out and we will continue to do that. The biggest issue was recognizing the challenge,” Hinds said.

He praised the government for not “picking out business models” and instead offered measures that could benefit both non-profit and for-profit models.

Hinds said that the measures are not a silver bullet to the financial challenges facing the industry. “I think all of these things are important tools,” he said.

However, even before Wednesday’s announcement, the federal Conservatives were critical of any move on this front, charging that government aid would taint journalistic independence.

“(Justin) Trudeau has just nationalized new journalism,” Conservative MP Michelle Rempel said on Twitter. “Any journo that takes this money will no longer be independent. Thus dies journalism.”

Conservative MP Pierre Poilievre told reporters that taxpayers’ money should not be used to support media organizations, especially in an election year.

“We think that media should be independent from the government, we should not have a situation where the government picks a panel that then decides who gets to report the news,” he said on Parliament Hill.

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“The media should be free and independent from the government,” Poilievre said.

Asked about such criticism, Morneau said it was “very important” to have robust journalism that offered a diversity of perspectives but he also noted the need for independence.

Wednesday’s update also provided more detail about the $50 million over five years that was promised in the February budget to support local journalism. It said the money would support independent, not-for-profit organizations to create news content that would be available to local news outlets, starting in 2019-20.

The federal government did not act on industry calls to level the playing field for foreign tech giants such as Google and Facebook, which compete for ad dollars. For example, companies can only deduct the cost of advertising only if ads are placed in Canadian publications. But that restriction doesn’t apply to the internet.