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Federal Tax - Qualified Canadian Journalism Organization (QCJO). Rebel News Network Ltd. v. Canada (Attorney General)
In Rebel News Network Ltd. v. Canada (Attorney General) (Fed CA, 2026) the Federal Court of Appeal dismissed an appeal, this brought against an earlier dismissal of a JR against "the decision of the Minister of National Revenue (the Minister) that Rebel News is not a "“qualified Canadian journalism organization”" (QCJO) within the meaning of subsection 248(1) of the Income Tax Act, R.S.C., 1985, c. 1 (5th Supp.) (the Act) because it is not engaged in the production of original news content".
Here the court reviews the 'QCJO' income tax statutory regime:A. The regulatory framework
[4] Before turning to the specific events that led to this appeal, it is helpful to first set out the underlying statutory framework and the process through which the Minister designates an organization as a QCJO.
[5] In its 2019 budget, the Government of Canada introduced a range of tax benefits to support Canadian journalism organizations producing original news. Parliament amended the Act accordingly: Budget Implementation Act, 2019, No. 1, S.C. 2019, c. 29. The amendments created a digital news subscription tax credit and a Canadian journalism labour tax credit and allowed journalism organizations meeting certain conditions to register as qualified donees: ss. 118.02, 125.6 and 149.1 of the Act. To apply for the tax benefits, a journalistic organization must first be designated as a QCJO.
[6] Central to this appeal is the QCJO definition in subsection 248(1) of the Act (the QCJO definition), which defines a QCJO as follows:248 (1) In this Act,
248 (1) Les définitions qui suivent s’appliquent à la présente loi.
....
[…]
qualified Canadian journalism organization,
organisation journalistique canadienne qualifiée
at any time, means a corporation, partnership or trust that
Société, société de personnes ou fiducie qui, à la fois :
(a) meets the following conditions:
a) satisfait aux conditions suivantes :
(i) in the case of a corporation,
(i) dans le cas d’une société :
(A) it is incorporated under the laws of Canada or a province,
(A) elle est constituée sous le régime des lois du Canada ou d’une province,
(B) the chairperson or other presiding officer, and at least 3/4 of the directors or other similar officers, are citizens of Canada, and
(B) son président ou une autre personne agissant comme tel et au moins les 3/4 des administrateurs ou autres cadres semblables sont des citoyens canadiens,
(C) it is resident in Canada,
(C) elle réside au Canada,
....
[…]
(iv) it operates in Canada, including that its content is edited, designed and, except in the case of digital content, published in Canada,
(iv) elle exerce ses activités au Canada, le contenu qu’elle produit devant notamment être révisé, conçu et, sauf dans le cas de contenu numérique, publié au Canada,
(v) it is engaged in the production of original news content, which
(v) elle produit du contenu de nouvelles originales qui, à la fois :
(A) must be primarily focused on matters of general interest and reports of current events, including coverage of democratic institutions and processes, and
(A) doit être axé principalement sur des questions d’intérêt général et rendre compte de l’actualité, y compris la couverture des institutions et processus démocratiques,
(B) must not be primarily focused on a particular topic such as industry-specific news, sports, recreation, arts, lifestyle or entertainment,
(B) ne doit pas être axé principalement sur un sujet donné, comme des nouvelles propres à un secteur particulier, les sports, les loisirs, les arts, les modes de vie ou le divertissement,
(vi) it regularly employs two or more journalists who deal at arm’s length with the organization in the production of its content,
(vi) elle emploie régulièrement au moins deux journalistes qui n’ont aucun lien de dépendance avec l’organisation pour la production de son contenu,
(vii) it is not significantly engaged in the production of content
(vii) elle ne se consacre pas de façon importante à la production de contenu:
(A) to promote the interests, or report on the activities, of an organization, an association or its members, or
(A) ayant pour but de promouvoir les intérêts d’une organisation, d’une association ou de ses membres, ou de rendre compte de leurs activités,
(B) for a government, Crown corporation or government agency, and
(B) pour le compte d’un gouvernement, d’une société d’État ou d’un organisme gouvernemental,
(viii) it is not a Crown corporation, municipal corporation or government agency, and
(viii) elle n’est ni une société d’État, ni une société municipale, ni un organisme gouvernemental;
(b) is designated at that time by the Minister and, for this purpose, the Minister shall take into account any recommendations of a body established for the purpose of this definition;
b) est désignée, au moment considéré, par le ministre, celui-ci tenant compte aux fins de la désignation des recommandations, le cas échéant, d’une entité établie pour l’application de la présente définition. [7] Before the requirement was eliminated through the Budget Implementation Act, 2021, No. 1, S.C. 2021, c. 23, subparagraph (a)(v) of the QCJO definition specified that an organization needed to be "“primarily”" engaged in the production of original news content.
[8] The CRA published administrative guidelines to structure the assessment of applications for QCJO designation. The Guidance on the Income Tax Measures to Support Journalism (the Guidance) fleshes out the requirements for QCJO designation, and in particular the expression "“is engaged in the production of original news content”" found at subparagraph (a)(v) of the QCJO definition, which is otherwise undefined in the Act. Its relevant excerpts read as follows:2.25 For the purposes of the definition of QCJO, an organization is considered to be engaged in the production of original news content where it demonstrates a commitment to producing original news content on an ongoing basis.
2.26 Neither the legislation, nor the CRA, have set an amount of original news content that must be produced by an organization in order to be considered engaged in the production of original news content.
2.27 The original news content of an organization generally refers to reports, features, investigations, profiles, interviews, analyses or commentaries that are:a. news;
b. written, researched, edited, and formatted by and for the organization;
c. based on facts and multiple perspectives actively pursued, researched, analyzed, and explained by a journalist for the organization; and
d. produced in accordance with journalistic processes and principles. ....
2.34 The rewriting, translation, reproduction or aggregation of news from external sources (including articles from news agencies, a current or previous issue of the same publication or any other publication) would not be considered original. Content produced in such a manner, by or for an organization, will factor into the determination of whether the organization is engaged in the production of original news content.
2.35 In addition, lightly edited reproductions of news content would not be considered original news content. For example, an article that repeats material from a news release with no evidence of further independent research and no additional facts, third party perspectives, or context, would not be considered original news content.
2.36 Original news content should be based on journalistic processes and principles, which include:a. a commitment to researching and verifying information before publication;
b. a consistent practice of providing rebuttal opportunity for those being criticized and presenting alternate perspectives, interpretations and analyses;
c. an honest representation of sources; and
d. a practice of correcting errors,
but do not include:
e. solicitation, design or production of advertising;
f. advertorials, sponsored content, branded content (any content where a third party, advertising client or business partner, participates in the development of the concept or directs or gives final approval to a large portion of the content);
g. stories produced primarily for industrial, corporate or institutional purposes; or
h. editing content that is entirely or principally accumulated or produced by algorithms or by aggregation software. 2.37 Content that is acquired, created, used, or presented in a way that contradicts journalistic processes and principles (for example, content that is plagiarized) would not be considered original news content. [9] When an organization applies for QCJO designation, the CRA generally reviews a minimum of three weeks of published content to assess whether the organization is engaged in the production of original news content. After analyzing this sample in light of the Act and the Guidance, the CRA issues a recommendation on the organization’s eligibility for QCJO designation.
[10] When the CRA has questions about whether an application meets the journalistic criteria, including whether an organization is engaged in the production of original news content, it submits its recommendation to the Independent Advisory Board on Eligibility for Journalism Tax Measures (the Independent Advisory Board) to obtain an independent assessment and non-binding recommendation as to whether an organization applying for QCJO designation satisfies the conditions set out in subparagraphs (a)(v), (vi) and (vii) of the QCJO definition. Established in March 2020 by Order in Council PC 2020-0177, pursuant to paragraph (b) to the QCJO definition, the Independent Advisory Board comprises individuals with expertise in journalism. After reviewing the Independent Advisory Board’s analysis, the CRA issues its final recommendation.
[11] Ultimately, the decision lies with either the Director General of the Legislative Policy Directorate (the Director General) or the Assistant Commissioner for the Legislative Policy and Regulatory Affairs Branch (the Assistant Commissioner), acting on behalf of the Minister.
....
[73] In establishing the QCJO regime, Parliament provided for the creation, at paragraph (1)(b) of the QCJO definition, of an independent advisory board for the very purpose of advising the Minister on whether an organization is engaged in the production of original news content under subparagraph (a)(v) of the QCJO definition. This shows that Parliament attached significant importance to whether applicants for the QCJO designation satisfied this criterion and supports the Minister’s adoption of a robust process to conduct this review.
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