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Opinion Ottawa’s approach to supporting charitable media foundations is uncharitable – and self-defeating

Brian Myles is the director of Le Devoir. André Ryan is chairman of the board of directors of Le Devoir.

When the federal government released details about its plan to support media organizations with a five-year, $595-million package of tax credits, we were shocked. While media organizations are allowed to apply for charitable status to receive donations and issue tax receipts to donors, as of right now, only non-profits that produce original content will be allowed to issue such receipts. That means foundations and non-profit organizations, such as Les amis du Devoir (The Friends of Le Devoir), would be excluded from such benefits.

The list of winners across Canada in this unfair lottery can be counted on the fingers of one hand. How could Minister of Canadian Heritage and Multiculturalism Pablo Rodriguez accept the exclusions?

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After seeking explanations from Finance Department officials, and by carefully reading the legislative framework proposed by the Trudeau government, the Journalism and Written Media Independent Panel of Experts concluded that this needed to be changed. Its report, submitted to cabinet on Thursday, recommended that charitable foundations that support journalism – including non-profit organizations such as Les amis du Devoir – should not be excluded from a law passed in haste at the end of the parliamentary session in Ottawa.

The group recommends amending the law to allow such groups to be recognized as qualified donees, for tax purposes. We cannot emphasize how important this is.

Le Devoir practically invented the philanthropy model in Quebec’s print media when Les amis du Devoir was founded in 1916. In its current incarnation, Les amis du Devoir is a non-profit that is governed by a federal charter. Its main objective is to run fundraising campaigns for Le Devoir, a for-profit company that publishes our digital and print editions.

Le Devoir and Les amis du Devoir represent two of the three pillars in our governance structure. The last, but not least, is Le Devoir Trust.​ This entity holds a controlling interest in Le Devoir and acts as a watchdog to ensure that Le Devoir remains fully independent and faithful to its original mission, in pursuit of the common good.

Over the past four years, Les amis du Devoir has raised $1.8-million from individual and corporate donors. These contributions have accelerated the digital transformation of Le Devoir and, thanks to Transat’s ongoing support, have sent journalists abroad to report internationally. Admittedly, these contributions have also resulted in a nominal profit over the past two years, but that profit will inevitably turn to loss if the desired legislative adjustment is not adopted in short order.

According to our estimates, recognition of Les amis du Devoir as a charity would allow us to raise between $750,000 and $1-million per year on a recurring basis, compared with the current average of $500,000 per year. We are aware of donors who are holding off giving some $500,000 over the next five years until such time that Les amis du Devoir is recognized as a charity.

The exclusion of Les amis du Devoir will negatively affect the stability of our non-profit organization and the sustainability of Le Devoir as an independent media outlet. The challenge extends beyond our walls. As the expert panel report points out, charitable foundations that support journalism “could play an important role in the future funding of journalism.”

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While print revenues steadily erode, the media needs new sources of income to offset the loss of digital-advertising revenues to Google, Apple, Facebook and Amazon. Other media organizations that have a business model similar to ours, too, could benefit from the recognition of charitable foundations that support journalism.

This impasse is not the fault of the group of experts. It did its job well. It has proposed simple and evidence-based criteria for determining the media’s eligibility for the 25-per-cent payroll tax credit for editorial staff. This measure and the digital-subscription tax credit will be beneficial to Le Devoir and other media.

We do not understand why Les amis du Devoir is being pushed aside. This is unfair to our readers and our donors – and worrisome for the future of all media looking to reinvent themselves in a time of great uncertainty.

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