Financial Post: Senate urges Liberals to reconsider tax deductions for ads on Google, Facebook

by Emily Jackson

A Senate committee wants the government to revisit a tax rule that entices companies to advertise on foreign online platforms like Google and Facebook, spending that it says is “hobbling Canada’s already declining news industry.”

The Standing Committee on Transport and Communications recommends the feds study the section of the Income Tax Act that allows companies to deduct advertising expenses for ads placed online and how this rule “contributes to the media industry’s decline,” according to a report released Tuesday.

While Section 19 also allows advertisers to deduct expenses for ads purchased in Canadian media outlets, the committee questioned whether foreign internet giants should get the same tax break given the ongoing flight of ad dollars from traditional media to the internet.

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