Advertising on digital platforms | The FPJQ pleads for the end of tax advantages

(Trois-Rivières) Meeting in congress this weekend in Trois-Rivières, the Professional Federation of Journalists (FPJQ) asks the federal government to modify the Income Tax Act. Advertising expenses on major digital platforms are tax deductible, which the FPJQ deplores.

In its current form, the law states that the amount advertisers invest in advertising in Canadian media is tax deductible. It specifies that this tax advantage does not apply to the purchase of advertising space by a Canadian advertiser in a foreign media, such as a magazine or a television channel. However, digital giants, such as Facebook or YouTube, are not considered foreign media under this policy adopted in 1960, well before the arrival of the internet.

At the general assembly on Sunday, members of the FPJQ adopted a resolution asking the federal government to change the law to include digital platforms, mostly American, in the definition of foreign media.

“The media are currently suffering enormously from the exodus of advertising revenues to these same web giants. This proposal aims to make it fairer. The law currently confers another advantage to the web giants, who do not need it,” declared the president of the FPJQ, Éric-Pierre Champagne.

The FPJQ intends to rally other organizations to its cause in the coming weeks in order to exert a balance of power against Ottawa. The resolution from the Professional Federation of Journalists follows an outing last February by Louis Audet, the chairman of the board of directors of Cogeco, one of the main players in the radio industry in Quebec. In a letter published in The Pressthe businessman also asked the federal government to revise the law so that advertising on foreign digital platforms is no longer eligible for tax advantages.

In the last 10 years, advertising revenues on the web have literally exploded, while all traditional media have lost advertisers. According to data shared by the Center for Media Studies at Laval University, online advertising revenues jumped 627% between 2012 and 2022 in Quebec.

During the same period, TV lost 16% of its advertising revenue, radio 24% and daily newspapers 67%. It is estimated that digital technology currently accounts for between 70 and 80% of advertising revenue in Quebec.