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Budget 2019: More Delays Favour Facebook, Not Democracy

Budget 2019: More Delays Favour Facebook, Not Democracy

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March 19th, 2019
Budget 2019: More Delays Favour Facebook, Not Democracy

FOR IMMEDIATE RELEASE

Ottawa - Canadian journalism is in a death spiral, with serious consequences for democracy. Today’s budget ignores this reality and demonstrates that the Trudeau government is completely oblivious to the magnitude of this crisis and its consequences.

Since Budget 2018, the government has repeatedly promised a flawed media bailout package that the Conservatives oppose. This budget puts that bailout on ice until after the election – an election the Liberals might lose.

“The government insists that it has a plan to assist Canadian journalists, but Mr. Trudeau would like to pay by post-dated cheque. But the Liberals may not be in power when it comes time to cash that cheque”, says Daniel Bernhard, executive director of the watchdog group, FRIENDS of Canadian Broadcasting.

Additionally, this budget takes no action to address the internet advertising loophole that disadvantages Canadian media to the benefit of Google, Facebook, and other online advertising platforms which do not contribute to Canadian journalism.

“Platforms like Facebook are displacing Canadian journalism, but not replacing it”, says Daniel Bernhard, executive director of the watchdog group, FRIENDS of Canadian Broadcasting. “Mr. Trudeau is paying lip service to the importance of journalism and democracy while quietly siding with companies like Facebook that pollute our democracy. These companies profit wildly from Canada’s policy of inaction, smothering Canadian journalism in the process.”

Despite recommendations from the Commons Heritage Committee and the Senate Transport and Communications Committee, the government has not explained its rationale for keeping the internet advertising loophole open, costing taxpayers $1.6 billion in 2018.

Canada has lost nearly 20,000 journalism jobs since 2006. American monopolies like Google and Facebook siphon more than $6 billion in advertising revenue away from Canadian media each year.

Federal tax policy makes this problem worse. Since the 1960s, the Income Tax Act has limited the deductibility of foreign ad expenses as an incentive for advertisers to buy Canadian. But a loophole exempts foreign digital media companies like Google and Facebook from this provision. These two firms now control 80% of the Canadian digital ad market.

Despite recommendations from the Commons Heritage Committee and the Senate Transport and Communications Committee, the government has not explained its rationale for keeping the internet advertising loophole open, costing taxpayers $1.6 billion in 2018.

“Facebook spent years lobbying the Harper and Trudeau governments in secret. It seems as though their underhanded efforts are paying off”, added Bernhard. “Mr. Trudeau has a disturbing habit of bowing down to Silicon Valley monopolies. This must change, and fast. It’s time to close the internet advertising loophole.”

The government does not require publishers like Facebook to abide by the same standards as other Canadian publishers, nor does it require them to collect sales taxes or pay corporate income tax. Other tech giants are similarly exempt. For example, Netflix is not required to finance Canadian content like other broadcasters must. The host of exemptions and subsidies enjoyed by Facebook, Google and Netflix were worth $2.75 billion in 2018 – 250% of what Ottawa invests in CBC.

FRIENDS is launching local election campaigns in 25 swing ridings where it enjoys the support of at least 1,000 families. These campaigns will demonstrate deep public support for professional Canadian journalism and storytelling, along with a strong public will to end the free ride for Silicon Valley. Visit WeChoose.ca for more information.

FRIENDS of Canadian Broadcasting is a non-partisan watchdog, working to keep Canada’s voice strong and free on air and online. FRIENDS is not affiliated with any broadcaster or political party.

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For more information: Jim Thompson – [email protected] or 613-447-9592

A journalism crisis is threatening Canadian democracy.
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