Friends of Canadian Media Urges Government to Close the Advertising Tax Loophole

Study shows that over two-thirds of all Canadian ad revenue goes to foreign digital media.

OTTAWA, ON, April 9, 2024 /CNW/ - Over 13 billion dollars in advertising revenues are being extracted from the Canadian economy annually, due to a longstanding federal tax loophole according to updated figures from Friends of Canadian Media. Canadian businesses can claim tax deductions for advertising on foreign digital media like Facebook and Google. The result is a major loss of advertising dollars for the Canadian media sector.

"Advertising is a critical source of financing for Canadian media companies, and we should be doing everything we can to repatriate the billions of dollars in ad revenues being gobbled up by foreign companies" says Friends of Canadian Media's Executive Director, Marla Boltman. "It's imperative that we close this loophole, and financially incentivize companies to invest their ad dollars in Canadian media companies to support Canadian news, programming and jobs."

Friends of Canadian Media first raised the flag on this issue back in 2017, with research showing that the rise of foreign tech platforms, in particular, was compromising the business models of Canadian media companies. The updated version of the study, reveals this problem has only worsened in the intervening years and has contributed significantly to the crisis in the Canadian news media sector.

"Foreign digital media services have gone from garnering one-third of all Canadian advertising revenues to over two-thirds since the first study," says Peter Miller, author of the updated report, "and trends suggest that the loss of Canadian media advertising share is accelerating".

In its report ahead of Budget 2024, the Standing Committee on Finance recommended introducing tax measures that would ensure that Canadian media are not deprived of advertising revenues.

"Canadians expect and deserve decisive action on this issue, and we strongly urge the Minister of Finance to adopt the Committee's recommendations," added Boltman.

Friends of Canadian Media is a non-partisan citizens' movement that stands up for Canadian voices in Canadian media ? from public broadcasting to news, entertainment, culture, and online civil discourse, we work to protect and defend Canada's rich cultural sovereignty and the healthy democracy it sustains. We are a not-for-profit organization that receives no government funding or donations from political parties or CRTC-regulated entities.

SOURCE Friends of Canadian Media