Rebel News not eligible for journalism tax credits, Federal Court rules

A Federal Court judge has upheld the federal government's decision to deny Rebel News, a far-right media outlet, access to journalism tax credits due to insufficient original news content.

This ruling is the latest development in an ongoing dispute between Rebel News and the government. The outlet applied in May 2021 to be classified as a "qualified Canadian journalism organization," a status that would allow it to claim tax credits for newsroom employee salaries. However, the Canada Revenue Agency (CRA) rejected the application, determining that less than one per cent of Rebel News' content was original reporting.

The journalism tax credits were introduced by the Liberal government in 2019 to support Canada's struggling media industry. They allow news outlets to claim credits for newsroom salaries and offer subscribers a digital news subscription tax credit.

Under the Income Tax Act, eligible news organizations must be involved in producing original news content. In February 2022, the CRA found Rebel News fell short of this requirement, as its content predominantly promoted a single viewpoint.

In response to the rejection, Rebel News requested a reconsideration and submitted a three-week period from January 30 to February 19, 2022, for review. This timeframe coincided with the trucker convoy protests in downtown Ottawa against COVID-19 restrictions. Despite this, the CRA maintained its decision in March 2023.

Rebel News sought a judicial review of the ruling in Federal Court. On Wednesday, Justice Ann Marie McDonald upheld the CRA's decision, calling it "justified, transparent and intelligible."

In her ruling, McDonald noted that the CRA reviewed 423 Rebel News reports from the designated period and found only 10 to be original news. She stated that "283 of the items were not based on facts, nor were multiple perspectives actively pursued, researched, analyzed, or explained by a journalist." An additional 135 items were categorized as curated or rewritten content from other sources.

Rebel News argued that the denial of journalism status violated press freedom by making media outlets dependent on government standards for tax benefits. However, McDonald dismissed this claim, stating the outlet did not provide evidence showing how the lack of tax credits hindered its ability to operate or its journalistic freedom.

Rebel News and its legal team did not immediately respond to requests for comment. However, founder Ezra Levant previously remarked in a June post that "nothing less than the future of independent journalism in Canada" was at stake in the case.

Last fall, the federal government temporarily increased the Canadian journalism labour tax credit rate from 25 to 35 percent, raising the salary cap from $55,000 to $85,000. News organizations with the qualified status can also benefit from Google's pledge to pay Canadian publishers $100 million annually. Rebel News did not apply for this funding under the Online News Act, though around 1,500 other outlets did.