Finance Committee on April 29th, 2019

[Blaine Langdon]

Just to clarify, and not being overly familiar with The Post Millennial, one thing I would pick up is that, at least in terms of the qualified Canadian journalism organization definition, I think it carries through all measures. It doesn't have to be a physical print copy. It focuses in on written news content, so an organization that is perhaps entirely web based—and feel free to correct me if I'm wrong—but produces written articles and original news content would qualify.

I have gone to that publication a couple of times. I couldn't speak to in general whether or not it would qualify, but, again, if it's an organization that is primarily focused on the production of news, and it includes some articles on arts, lifestyle, entertainment, etc. so it covers the spectrum, or an organization that only focused on news and coverage of democratic institutions are the ones we're seeking to include within these measures as opposed to exclude.

Again, our focus in drafting up the “not” paragraph is to not include specialty publications, something that is too focused on a particular, narrowly defined subject such as arts or an entertainment news publication. This is not what we're looking to support through these measures.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

I will just pick up on arts, because it's an example. Is an arts publication that reports on Canadian museums and doesn't have any direct news content not good enough for these measures? It has to be news reporting. You already exclude those in the next part, so that's what we're being asked to approve here: “to promote the interests, or report on the activities, of an organization, association or their members”, which I take to mean something like the CPA. The accountants have their own kind of magazine that they send out, so they produce original content. This means to exclude those types of publications, advocacy pieces on behalf of professional associations that would be excluded, and the Mortgage Professionals Canada would be excluded.

Why would you exclude from this something like a publication that focuses on Canadian arts? I'm trying to understand the purpose of this. What if I cover arts news, and that's the only thing I'm covering? This seems to say it's only for current events coverage of democratic institutions, like covering politics and politicians.

[Blaine Langdon]

I think that would be included. I think the purpose behind the measures is to ensure the continued availability of news and information of general interest to the Canadian public. Again, we did seek to ensure that organizations or publications with a narrow focus on a specific subject would be excluded, but, again, recognizing that we need to have the advice of the expert panel. We have heard concerns from stakeholders that the provisions have been drafted too narrowly, so we are looking to inform the work with that.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Well, you have concerned stakeholders here.

[Blaine Langdon]

Absolutely.

[The Chair, Liberal, Wayne Easter]

Thank you.

Before we go to you, Mr. Fergus, we are at 5:15 p.m. We're adjourning at 6:30 p.m. I know a lot of people have come here and probably have their own things they must be doing. Anybody who is here for part 4, division 1 through to the end, you are released.

If we get through to the end of part 3, I think we will be lucky today, because we still have a long way to go on tax measures. To give you people the opportunity to not have to wait, you are released.

Mr. Fergus.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

I would like to say to our guests who are here today, please don't look so longingly at your colleagues on part 4 who are leaving.

I just have a few more questions.

[The Chair, Liberal, Wayne Easter]

Mr. Fergus.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Thank you.

Mr. Langdon, first of all let me thank you very much. I think you gave very substantive answers to the questions that were asked, and I really do appreciate it. I would like to give you more of an opportunity to go through some of them.

Going back to the question, moving away from the eligibility requirement and moving to a larger question as to what is the active involvement of a government or of the cabinet in terms of determining who would and who would not receive this funding, you used the analogy of the Canada Revenue Agency.

You indicated that although there is a minister who is responsible—as all ministers should be responsible—that minister is not involved, clearly, in the day-to-day operations, investigations or determinations of what individual taxpayers would be paying. Similar to that structure, I'm assuming that these independent bodies would make a determination as to who would qualify for these tax measures in the field of journalism.

Is that correct? Could you please expand on that?

[Blaine Langdon]

Absolutely. Perhaps I will say two things. One is that before my life at Finance, I worked for the Canada Revenue Agency. What I will say is that, certainly, although the Income Tax Act does refer to the Minister of National Revenue, that authority is delegated to the commissioner, who subdelegates it down to the officials level.

As you do your work—I worked in the registered charities area—it is the director general who has final say on these issues of registration decisions, and it's generally done at the officials level with the recognition that sometimes you brief on sensitive issues. That said, in terms of these particular measures, the decision to establish an independent body is born out of a recognition that the decision-making associated with journalism organizations is particularly sensitive. The intent is for there to be an independent mechanism to prevent exactly what's being discussed today: to prevent any accusations that the government is interfering with journalism organizations and to protect those organizations themselves from that type of potential interference.

That's why it is set out as such. I think there are legitimate concerns that have been raised. Unfortunately, we don't have the answers to give you as to who that independent body will be and how it will work, but certainly I can point to what was announced and what the intent is for that.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Mr. Langdon, is it also correct that the industry itself is being closely consulted to ensure that there is this independence and that not only is there in effect independence but there is also the appearance of independence?

[Blaine Langdon]

Absolutely. In the design of the measures to date, we have been heavily involved in consulting with the journalism sector. Although it has not been established or announced yet, the budget does, again, refer to the fact that the advisory panel will be selected from members of the journalism industry. They've been involved at pretty much every stage of this.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Thank you very much, sir.

[The Chair, Liberal, Wayne Easter]

Mr. Dusseault.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you, Mr. Chair.

One of the problematic aspects is that if this were not about journalism, the details would follow the definitions. The bill would explain who qualifies. Normally the minister would make the decision and would be responsible. The problem in that regard is that we don't want the minister to decide whether a Canadian journalism organization qualifies. That is why we created this panel, which will be defined later.

Can you give us examples of cases where such an independent body exists, so that we can study it to see whether things are done in a similar or different way?

[Trevor McGowan]

We have in the bill, as already discussed, a measure relating to donations of cultural property that I think Blaine could expand upon, but that's another example where cultural property is designated as a thing of outstanding significance currently or national importance. That's based on their expertise in the cultural property area. That would be, I think, an example of another instance in not only the tax act but as touched upon in this bill, where you have a status being given for the other case of cultural property by someone other than the Minister of National Revenue.

[Blaine Langdon]

The regime that Trevor is referring to applies to donations of certified Canadian cultural property. It's not designed this way for the purposes of independence; it's much more for the purposes of their expertise. When an individual is going to donate Canadian cultural property to a designated institution, such as a museum or a university, the desire is to have that cultural property qualify for certain enhanced tax incentives. In addition to the charitable donations tax incentive, that property would also qualify for an exemption from any capital gains tax associated with the disposition. That person can apply to the Canadian Cultural Property Export Review Board for a determination or a designation that the item, be it art or some other form of Canadian cultural property, is of national importance or of outstanding significance. Now it's only of outstanding significance provided that the budget implementation act passes. With that determination, the donation qualifies for the enhanced tax incentives. Should someone be refused the designation, recourse with regard to that would go, I believe, to Tax Court, so there's an independent mechanism for that.

While that organization is ultimately embedded within government—it's a subcomponent of the Department of Canadian Heritage—it's an independent tribunal with, as I said, recourse to the court system.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

My colleague Pierre Poilievre spoke about the regulations or the act that will follow later. That is when we will see who will appoint the members of that panel. If some organizations believe that a decision is not based on valid grounds, I suppose that the decisions of that body could be challenged before the Federal Court or the Canadian Tax Court, in this case. Will this be defined immediately, or only in the act or regulations that will follow?

[Blaine Langdon]

Again, it's unfortunate that we do not have further details for you because I think the answer to your question is dependent on the nature of the body that is set up. To the extent that it is a creature of statute—it is established as an independent something by statute—presumably, in that same statute, one would place recourse to a particular type of court or tribunal. That would typically be the case.

By default, with regard to a decision that is made by a government entity, there is the possibility to apply for a judicial review of that decision, which would go to Federal Court. I'm sure that there are others that I'm missing. I'm not an expert on all of these things, but certainly the desire would be for there to be some sort of recourse mechanism built into whatever is ultimately announced. However, we'll have to wait and see what that is.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

We will have to wait for that panel to be created by the law or through regulations. Otherwise it will be done through judicial review at the Federal Court.

I have a last question for Mr. Langdon.

There are some very specific exceptions. Sectors such as sports, leisure, the arts, lifestyle or entertainment are mentioned. Were politics not mentioned deliberately? For instance, would media that report strictly on politics be entitled to that credit? I expect that this would be covered in the definition in the previous paragraph. Is that the case?

[Blaine Langdon]

When we looked into the issue of providing some mechanism to support Canadian journalism and what key things we wanted to ensure were supported, what we found in our research and was pointed out to us is the possibility of the loss of local news organizations, which for many people are the only sources of information about their communities, as well as the loss of coverage of Canadian news, which is important for the purposes of allowing Canadians to make decisions about things that are important to their lives.

In particular, one thing that came up throughout our work is the importance of journalism organizations in a democratic society to holding powerful actors and powerful institutions to account, which is why you see, in the general definition, that emphasis on coverage of democratic institutions, without narrowing it down to only political news organizations.

In the design of a tax measure, one thing we seek to do is ensure it's properly targeted. If you design a tax measure that is too broad, first, it will dramatically increase the cost of the measure; second, you won't necessarily be supporting the things that you want to target.

I think we recognize that there is, certainly, value in many of the publications that are out there. I don't mean to suggest—if I did in my previous testimony—that an organization that produces information with respect to the arts community is in some way not worthy of support. I think what we're trying to do in the design of these tax measures is more narrowly target organizations that are providing news and general information and coverage of democratic institutions, for the reasons that I've just explained.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

That is a long answer to say that a media organization that reports only on politics would be entitled to the measures proposed here.

[Maude Lavoie]

This is what it says about that in the definition:

must be primarily focused on matters of general interest and reports of current events, including coverage of democratic institutions...

That does not mean that the organization can only do that, but rather that that element must be included for the reason my colleague mentioned. I don't think the definition makes it clear that in order to qualify, the newspaper must focus on that aspect alone. It becomes a matter of interpretation.

The organization must cover a variety of news of general interest to the public, including political news.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Would a journalism organization that only covers general and current events and excludes politics be ineligible? Is that correct?

[Maude Lavoie]

An organization that covers municipal affairs could qualify. Things will have to be looked at on a case-by-case basis. That is why an independent entity will have to examine these matters.