Data from statista.com show that before the 2020 pandemic, Canadians spend nearly five hours (298 minutes) on average with digital media per day. Consequently, time spent on traditional media is declining. The forecast is that by 2022, the average digital news consumption will increase to 328 minutes daily.
Because millions of Canadians are staying home due to lockdowns, engagement with digital communication channels is rising. More people visit government websites to gather information, while many want to remain ultra-connected with their communities. Interest in finance and investment news is also growing.
Meanwhile, the digital news media industry is in crisis. This sector needs critical support to keep its business models afloat. Fortunately, the government found a way to encourage Canadian taxpayers to subscribe to qualified Canadian journalism organizations (QCJOs).
The new DNSTC
Canadian media organizations require immediate support, and the Canada Revenue Agency’s (CRA) financial incentive for taxpayers could breathe new life. The Digital News Subscription Tax Credit (DNSTC) is the CRA’s latest tax-break offering.
The DNSTC is a temporary, non-refundable tax credit that you can claim on your personal income tax and benefit return for 2020 to 2024. The total cost of the digital news subscription should not exceed $500 per year. Your corresponding tax credit is 15%, or $75. The full tax credit within the prescribed period could be as much as $375.
Qualifying subscription expense
A taxpayer can claim the DNSTC if the digital news subscription expense paid in the year is with a QCJO. Make sure your digital news partner primarily engages in producing original written news content. Also, it doesn’t have a broadcasting licence or undertaking.
The CRA calculates the credit by multiplying the lowest personal income tax rate (15%) by the total amount of qualifying digital news subscriptions paid, not exceeding $500. Note that access to content in non-digital form or other than a QCJO’s content will not qualify. If there is no standalone subscription, the CRA picks up only one-half of the subscription expense.
Top-notch dividend stock
Besides the numerous tax breaks in 2021, Canadians have ways to boost household income. Investing in a company that operates through utilities, transport, energy, and data infrastructure can deliver handsome returns. Brookfield Infrastructure Partners (TSX:BIP.UN)(NYSE:BIP), a defensive asset, pays a respectable 3.72% dividend.
This $19.72 billion company is one of the largest owners and operators of diverse global infrastructure networks. Its reach is vast and covers four regions: North America (30%), South America (25%), Asia-Pacific (25%), and Europe (20%). Brookfield Infrastructure’s portfolio is highly diversified and mostly quality businesses.
Brookfield Infrastructure has multiple revenue sources comprising natural gas pipelines, electricity transmission lines, and natural gas storage. The company operates data centres, fibre backbone networks, port, rail, and toll roads. Since most operating assets are regulated, the company generates stable cash flow.
It’s worth investing in Brookfield Infrastructure if you have free cash to invest, because it has a proven record of strong revenue and EBITDA growth through the years. You can hold the stock and never sell.
Be a qualifying subscriber today
The federal government hopes more Canadians will help alleviate QCJOs from financial hardships from now until 2024. Be a qualifying subscriber of eligible digital news media and be part of this noble cause.