The National Post editorial board has highlighted a significant issue affecting Canadian media: the tax deductibility of advertising expenses directed to foreign digital platforms. Under current Canadian tax law, businesses can deduct advertising costs on foreign-owned digital platforms like Google and Facebook, which dominate the digital advertising market.This policy inadvertently incentivizes companies to allocate their advertising budgets to these foreign entities, diverting crucial revenue away from domestic media outlets.

The editorial argues that this tax provision undermines Canadian journalism by depriving local news organizations of essential advertising income, thereby threatening their financial viability. To address this imbalance, the National Post advocates for revisiting the advertising tax deductibility provisions of the Income Tax Act. By closing this loophole, the government could encourage businesses to support Canadian media through their advertising expenditures, fostering a more sustainable environment for domestic journalism.

This perspective aligns with broader discussions on the need to adapt tax policies to the evolving digital economy, ensuring that local industries are not disadvantaged by outdated regulations. Implementing such changes could play a pivotal role in preserving the integrity and diversity of Canada’s media landscape.

Read the original article here: https://nationalpost.com/opinion/close-the-digital-advertising-tax-loophole-to-save-canadian-news