What to know
- A group of Canadian media companies and industry representatives is urging the federal government to change advertising tax rules so that more money stays in Canada rather than going to foreign digital platforms.
- Led by Glassroom executive managing director Sarah Thompson, the group is gathering at least 50 signatures from media organizations on a letter asking Ottawa to create tax rewards for businesses that advertise with Canadian-owned media companies.
- Supporters argue that Canadian media is a major economic driver for the country, adding that research shows only about $24 of every $100 spent on ads remains in Canada. They said an investment in local media would create jobs and boost GDP.
A group of media companies and representatives is petitioning the federal government to change tax rules in favour of putting money back into Canadian businesses, rather than foreign platforms.
The group includes multiple media moguls who are looking to gather at least 50 signatures on a letter detailing their request from different organizations within the industry, before presenting the document to the federal government, ahead of their fall budget.
Classroom’s executive managing director Sarah Thompson is one of the individuals taking charge of the initiative. She told Now Toronto that the group is hoping to tell the government to rethink how advertising is taxed.
“Currently, there’s more money flowing out of our local economy than flowing into it, in a lot of different areas. But one area that is often overlooked is the media industry in general,” Thompson explained. “The initiative is to draw attention to the economic value of the media industry within Canada to help re-level the playing field of our industry as well.”
Thompson added that the initiative’s aim is to have the federal government allow tax benefits that would encourage businesses to advertise using Canadian-owned media company commercials and products, instead of foreign digital platforms.
According to research conducted through the Canadian Media Means Business initiative, only around $24 of every $100 spent on advertising remains in the Canadian economy, with the remaining going to international businesses.
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The push particularly highlights the media industry, which can have more significance in numbers than others, Thompson added.
“Canadian media is often discussed through the lens of journalism, heritage, or cultural policy,” she said. “But it’s also an economic powerhouse that employs more people than industries like automotive manufacturing and telecommunications. We don’t talk enough about that.”
Some organizations backing the cause include Glassroom, Seekers Media, and Narcity. Gonez Media Inc., which owns Now Toronto and the Brandon Gonez Show, has also signed onto the initiative.
Thompson explained that the benefit of having Canadian advertisers would go back into the country’s economy.
“For every dollar invested in Canadian media, one dollar is added to Canada’s GDP,” she said. “For every million dollars invested, more than eight jobs are created.”
Adjusting Canada’s Online News Act
In June 2023, the Federal government passed Bill C-18, also known as the Online News Act, leading to Canadian news content being blocked on some platforms, including Meta-run social applications Facebook and Instagram.
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The bill regulates digital platforms that share news content in Canada, introducing a system where new organizations can negotiate fair compensation from Google or Meta. According to the federal government, the goal of the legislation is to create equal negotiating opportunities for both the new organizations and the social media platforms.
Thompson said there needs to be a new way to help this process.
“I think it’s time to find a new mechanism,” Thompson said. “More often than not, rewarding better behaviour is more effective than simply focusing on taxation or punishment.”
While Thompson said platforms such as Google and Meta do provide Canadian organizations with adequate advertising tools, she said the current market is not a level playing field.
“It’s not an either-or conversation,” she said. “The concern is making sure quality, Canadian-owned media doesn’t disappear because local publishers simply can’t compete with companies operating at a global scale.”
Thompson said the group is on track to get more than the needed 50 signatures by their Aug. 29 deadline. She hopes the message comes across clearly to Prime Minister Mark Carney and Finance Minister François-Philippe Champagne.
“Don’t underestimate the economic power of Canadian media, and now is the time to turn the tide a little bit, to ensure we don’t go further down the landslide.”
