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B.C. Liberals Hit Straight With Million-Dollar Fine
By Dan McLeod, Georgia Straight, October 9, 2003
The Georgia Straight is faced with the biggest threat in its 36-year history.
Following a visit from a provincial-government auditor, the Straight has been stripped of its status as a newspaper under provincial sales-tax legislation and assessed fines and penalties that will total more than one million dollars by year's end. This fine must be paid immediately and can only be reversed through a difficult and expensive appeal process that could tie us up in court for several years to come.
At the same time, community newspapers that are dumped on doorsteps unsolicited and laden with so many advertising flyers that a big elastic is often needed to hold them together are still considered official newspapers and therefore exempt from this legislation. Is it any coincidence that the owners of most of these papers are friends of the B.C. Liberals?
The Georgia Straight thus becomes the only newspaper in Canada to be classified as less than a newspaper under provincial legislation. No other newspaper need fear such a threat. Because of the Straight's uniqueness, the Liberals have found a way to target us without affecting any other paper in the province. In other words, this has all the earmarks of a witch-hunt.
Appeals of the crushing million-dollar assessment must first go to the Minister of Provincial Revenue. Chances of success at this stage are very slim, so our best chance for any justice is to take the matter to the B.C. Supreme Court. The Liberal minister, however, has the power to hold up the matter for months, even years. By that time, the Georgia Straight could be out of business.
The ruling harks back to the Straight's beginnings, when we were prosecuted frequently under a wide assortment of trumped-up charges. In 1967, a crusading mayor and chief prosecutor conspired to use the city licence department to close down the paper. When that attempt was overruled by the Supreme Court, they had us thrown in jail for criminal libel, a charge that had only been used twice in the history of Confederation. And on and on it went, until the harassment ended around 1972.
Using the Revenue Ministry to close down a newspaper is a ploy well-known to political leaders such as Gordon Campbell. For example, it is documented that Richard Nixon used the IRS to harass political opponents. As the only independent newspaper in Vancouver--and, indeed, the only local newspaper that consistently publishes articles critical of the government--we find this move not only discriminatory in the extreme but a politically motivated attempt by the government to silence one of its harshest critics.
It is also a direct attack on all the arts and cultural and business life of the city. The Straight is appealing to arts and entertainment organizations, nonprofit groups and charities, as well as small-business owners, to speak out against this decision and help by swearing affidavits in our defence if and when it comes time to take the government to court. If a court battle does ensue, we intend to fight vigorously and to the bitter end.
The need to fight this battle would stop now if we were to abandon our Time Out listings guide. This we refuse to do. The guide is a free public service that is based on one of this paper's founding principles: to encourage and foster the growth of a healthy and lively arts and cultural scene in our city.
By successfully closing the Straight, Gordon Campbell will have destroyed the only independent media outlet left in this city. He can then take credit for finishing the job that his namesake mayor, Tom Campbell, began more than 36 years ago. It appears that driving our province's social structures into a ditch is not good enough for the premier. Now he must silence the only newspaper that dares to criticize his mean-spirited policies. Making him accountable for his actions is our journalistic duty, even though our very existence is at stake.
....
Q&A About the B.C. Liberals' Plan to Terminate the Straight
QUESTION: Why does the Straight have to pay $1 million in provincial sales taxes on its printing costs?
ANSWER: This is a good question, because the Social Service Tax Act says that newspapers do not have to pay sales tax on printing costs. The B.C. Liberal government recently claimed that the Straight is not a newspaper, which is why the revenue ministry imposed a $1-million penalty.
QUESTION: Why don't the Asper family's CanWest Global papers have to pay this tax?
ANSWER: Because the B.C. Liberal government says that all of the Asper family's papers--including freebies like the Vancouver Courier, the North Shore News, the Richmond News, and the Burnaby Now--are "newspapers" under the Social Service Tax Act.
QUESTION: If the Straight manages to pay the $1-million fine, will it be okay?
ANSWER: Even if the Straight manages to pay the fine, it will still have to continue paying this tax--an additional $250,000 or more per year. It is difficult for any small business to survive when it has to pay a large tax that none of its competitors has to pay. Especially when the competitors are as large and deep-pocketed as CanWest Global.
QUESTION: The Straight has won scores of journalism awards. Doesn't this make it a newspaper?
ANSWER: Not in the eyes of the Gordon Campbell government.
QUESTION: The Straight looks like a newspaper and feels like a newspaper. How could the government conclude that the Straight is not a newspaper?
ANSWER: Under the Social Service Tax Act, a newspaper must have at least 25 percent "editorial" content. The B.C. Liberal government arbitrarily decided that the 25-percent figure can't include the Straight's Time Out listings, which it described as "advertising". Therefore, the government claims the Straight is not a newspaper under the act and demanded taxes dating back four years. If the Straight published TV listings in place of Time Out, it would qualify as a newspaper under the B.C. Liberal government's definition.
QUESTION: Why does the Straight say that Time Out is "editorial" content and not "advertising"?
ANSWER: Time Out is prepared and written by the editorial staff. The listings include the Straight critics' recommendations and are not connected in any way with advertising. Time Out also includes cartoons, which have no connection to advertising.
QUESTION: What's in it for advertisers?
ANSWER: Buying an ad does not guarantee a listing in Time Out. These listings are published for free, which lets local arts and entertainment groups tell readers about their events. Human-rights organizations, postsecondary institutions, transportation groups, and many others also get a chance to inform people about events in the Time Out section. It's one of the ways in which the Straight serves the community.
QUESTION: If the B.C. Liberal government changed its mind and decided that Time Out is "editorial" content, would the Straight be considered a newspaper under the act?
ANSWER: Yes, but the government wouldn't be able to collect $1 million in sales taxes over a four-year period.
QUESTION: Could the Straight qualify for a sales-tax exemption in the future if it cut down the size of the Time Out listings?
ANSWER: Yes. If, for example, the Events and Arts listings were eliminated, the Straight would qualify.
QUESTION: Is the Straight considering the option of cutting the listings?
ANSWER: According to the publisher, the answer is a definite no. The Canadian Charter of Rights and Freedoms guarantees freedom of the press.
QUESTION: Can the Straight qualify for a sales-tax exemption if it is considered a magazine?
ANSWER: Yes. However, under the Social Service Tax Act, a magazine is defined as a "bound" publication. The Straight's pages aren't connected by staples or glue. Therefore, the government has concluded that the Straight is not a magazine.
QUESTION: What if the Straight were to bind its pages with staples or glue?
ANSWER: Then it would qualify as a magazine and it would be exempt from paying future sales taxes on its printing costs. However, there is no press in Vancouver capable of producing a bound weekly publication within the deadlines required by the Straight.
QUESTION: But haven't the Straight's writers, illustrators, and photographers also won dozens of magazine awards, regionally and nationally?
ANSWER: Yes. The Straight has even been named Magazine of the Year for both B.C. and Yukon and all of Western Canada, but that doesn't make it a magazine in the eyes of the Gordon Campbell government.
QUESTION: Do magazine publishers have to pay provincial sales tax on their printing costs?
ANSWER: Magazines don't pay provincial sales tax on printing costs if 10 percent of their content is not advertising or promotional material. The Straight would qualify if the government agreed with the magazine industry and defined the Straight as a magazine.
QUESTION: Has the Straight ever made political donations to the B.C. Liberal Party?
ANSWER: No.
QUESTION: Has the Asper family's company, CanWest Global Communications Corp., ever made political donations to the B.C. Liberal Party?
ANSWER: Yes. Between January and May, 2001, leading up to the last provincial election, CanWest Global donated $30,000 to the B.C. Liberal Party.
QUESTION: Is that the only connection between CanWest and the premier?
ANSWER: No. CanWest's CEO, Leonard Asper, and CanWest's local boss, Dennis Skulsky, each had private meetings with Premier Campbell in the premier's office after the 2001 election. Last month, Premier Campbell and Skulsky were standing together at the corner of Georgia and Burrard streets hawking copies of the Vancouver Sun. This doesn't prove any conspiracy, of course.
QUESTION: CanWest owns the Vancouver Sun, which prints the "New Homes" section. Why doesn't the B.C. Liberal government consider this section "advertising" and make the Vancouver Sun pay provincial sales tax for its printing costs?
ANSWER: Perhaps you should call the premier's office to get an answer to this question. The number is (250) 387-1715.
QUESTION: Before the last election, the Straight described Premier Campbell as a politician who wanted to cut taxes. Why is his government now so gung ho to collect taxes?
ANSWER: Perhaps the premier was wrong when he said tax cuts would pay for themselves. Now he is scrambling for revenue. According to the provincial budget, Campbell hopes to increase provincial sales tax revenue by almost $500 million per year by 2005/06.
QUESTION: What's in it for the tax collectors?
ANSWER: The Gordon Campbell government actually created a law that docks the revenue minister's salary by up to 20 percent if he fails to meet financial targets. This year, each government auditor is expected to collect $520,000 in sales taxes and $2.7 million in "overdue account receivable" revenue. That was reported in the ministry's "service plan".
By Dan McLeod, Georgia Straight, October 9, 2003
The Georgia Straight is faced with the biggest threat in its 36-year history.
Following a visit from a provincial-government auditor, the Straight has been stripped of its status as a newspaper under provincial sales-tax legislation and assessed fines and penalties that will total more than one million dollars by year's end. This fine must be paid immediately and can only be reversed through a difficult and expensive appeal process that could tie us up in court for several years to come.
At the same time, community newspapers that are dumped on doorsteps unsolicited and laden with so many advertising flyers that a big elastic is often needed to hold them together are still considered official newspapers and therefore exempt from this legislation. Is it any coincidence that the owners of most of these papers are friends of the B.C. Liberals?
The Georgia Straight thus becomes the only newspaper in Canada to be classified as less than a newspaper under provincial legislation. No other newspaper need fear such a threat. Because of the Straight's uniqueness, the Liberals have found a way to target us without affecting any other paper in the province. In other words, this has all the earmarks of a witch-hunt.
Appeals of the crushing million-dollar assessment must first go to the Minister of Provincial Revenue. Chances of success at this stage are very slim, so our best chance for any justice is to take the matter to the B.C. Supreme Court. The Liberal minister, however, has the power to hold up the matter for months, even years. By that time, the Georgia Straight could be out of business.
The ruling harks back to the Straight's beginnings, when we were prosecuted frequently under a wide assortment of trumped-up charges. In 1967, a crusading mayor and chief prosecutor conspired to use the city licence department to close down the paper. When that attempt was overruled by the Supreme Court, they had us thrown in jail for criminal libel, a charge that had only been used twice in the history of Confederation. And on and on it went, until the harassment ended around 1972.
Using the Revenue Ministry to close down a newspaper is a ploy well-known to political leaders such as Gordon Campbell. For example, it is documented that Richard Nixon used the IRS to harass political opponents. As the only independent newspaper in Vancouver--and, indeed, the only local newspaper that consistently publishes articles critical of the government--we find this move not only discriminatory in the extreme but a politically motivated attempt by the government to silence one of its harshest critics.
It is also a direct attack on all the arts and cultural and business life of the city. The Straight is appealing to arts and entertainment organizations, nonprofit groups and charities, as well as small-business owners, to speak out against this decision and help by swearing affidavits in our defence if and when it comes time to take the government to court. If a court battle does ensue, we intend to fight vigorously and to the bitter end.
The need to fight this battle would stop now if we were to abandon our Time Out listings guide. This we refuse to do. The guide is a free public service that is based on one of this paper's founding principles: to encourage and foster the growth of a healthy and lively arts and cultural scene in our city.
By successfully closing the Straight, Gordon Campbell will have destroyed the only independent media outlet left in this city. He can then take credit for finishing the job that his namesake mayor, Tom Campbell, began more than 36 years ago. It appears that driving our province's social structures into a ditch is not good enough for the premier. Now he must silence the only newspaper that dares to criticize his mean-spirited policies. Making him accountable for his actions is our journalistic duty, even though our very existence is at stake.
....
Q&A About the B.C. Liberals' Plan to Terminate the Straight
QUESTION: Why does the Straight have to pay $1 million in provincial sales taxes on its printing costs?
ANSWER: This is a good question, because the Social Service Tax Act says that newspapers do not have to pay sales tax on printing costs. The B.C. Liberal government recently claimed that the Straight is not a newspaper, which is why the revenue ministry imposed a $1-million penalty.
QUESTION: Why don't the Asper family's CanWest Global papers have to pay this tax?
ANSWER: Because the B.C. Liberal government says that all of the Asper family's papers--including freebies like the Vancouver Courier, the North Shore News, the Richmond News, and the Burnaby Now--are "newspapers" under the Social Service Tax Act.
QUESTION: If the Straight manages to pay the $1-million fine, will it be okay?
ANSWER: Even if the Straight manages to pay the fine, it will still have to continue paying this tax--an additional $250,000 or more per year. It is difficult for any small business to survive when it has to pay a large tax that none of its competitors has to pay. Especially when the competitors are as large and deep-pocketed as CanWest Global.
QUESTION: The Straight has won scores of journalism awards. Doesn't this make it a newspaper?
ANSWER: Not in the eyes of the Gordon Campbell government.
QUESTION: The Straight looks like a newspaper and feels like a newspaper. How could the government conclude that the Straight is not a newspaper?
ANSWER: Under the Social Service Tax Act, a newspaper must have at least 25 percent "editorial" content. The B.C. Liberal government arbitrarily decided that the 25-percent figure can't include the Straight's Time Out listings, which it described as "advertising". Therefore, the government claims the Straight is not a newspaper under the act and demanded taxes dating back four years. If the Straight published TV listings in place of Time Out, it would qualify as a newspaper under the B.C. Liberal government's definition.
QUESTION: Why does the Straight say that Time Out is "editorial" content and not "advertising"?
ANSWER: Time Out is prepared and written by the editorial staff. The listings include the Straight critics' recommendations and are not connected in any way with advertising. Time Out also includes cartoons, which have no connection to advertising.
QUESTION: What's in it for advertisers?
ANSWER: Buying an ad does not guarantee a listing in Time Out. These listings are published for free, which lets local arts and entertainment groups tell readers about their events. Human-rights organizations, postsecondary institutions, transportation groups, and many others also get a chance to inform people about events in the Time Out section. It's one of the ways in which the Straight serves the community.
QUESTION: If the B.C. Liberal government changed its mind and decided that Time Out is "editorial" content, would the Straight be considered a newspaper under the act?
ANSWER: Yes, but the government wouldn't be able to collect $1 million in sales taxes over a four-year period.
QUESTION: Could the Straight qualify for a sales-tax exemption in the future if it cut down the size of the Time Out listings?
ANSWER: Yes. If, for example, the Events and Arts listings were eliminated, the Straight would qualify.
QUESTION: Is the Straight considering the option of cutting the listings?
ANSWER: According to the publisher, the answer is a definite no. The Canadian Charter of Rights and Freedoms guarantees freedom of the press.
QUESTION: Can the Straight qualify for a sales-tax exemption if it is considered a magazine?
ANSWER: Yes. However, under the Social Service Tax Act, a magazine is defined as a "bound" publication. The Straight's pages aren't connected by staples or glue. Therefore, the government has concluded that the Straight is not a magazine.
QUESTION: What if the Straight were to bind its pages with staples or glue?
ANSWER: Then it would qualify as a magazine and it would be exempt from paying future sales taxes on its printing costs. However, there is no press in Vancouver capable of producing a bound weekly publication within the deadlines required by the Straight.
QUESTION: But haven't the Straight's writers, illustrators, and photographers also won dozens of magazine awards, regionally and nationally?
ANSWER: Yes. The Straight has even been named Magazine of the Year for both B.C. and Yukon and all of Western Canada, but that doesn't make it a magazine in the eyes of the Gordon Campbell government.
QUESTION: Do magazine publishers have to pay provincial sales tax on their printing costs?
ANSWER: Magazines don't pay provincial sales tax on printing costs if 10 percent of their content is not advertising or promotional material. The Straight would qualify if the government agreed with the magazine industry and defined the Straight as a magazine.
QUESTION: Has the Straight ever made political donations to the B.C. Liberal Party?
ANSWER: No.
QUESTION: Has the Asper family's company, CanWest Global Communications Corp., ever made political donations to the B.C. Liberal Party?
ANSWER: Yes. Between January and May, 2001, leading up to the last provincial election, CanWest Global donated $30,000 to the B.C. Liberal Party.
QUESTION: Is that the only connection between CanWest and the premier?
ANSWER: No. CanWest's CEO, Leonard Asper, and CanWest's local boss, Dennis Skulsky, each had private meetings with Premier Campbell in the premier's office after the 2001 election. Last month, Premier Campbell and Skulsky were standing together at the corner of Georgia and Burrard streets hawking copies of the Vancouver Sun. This doesn't prove any conspiracy, of course.
QUESTION: CanWest owns the Vancouver Sun, which prints the "New Homes" section. Why doesn't the B.C. Liberal government consider this section "advertising" and make the Vancouver Sun pay provincial sales tax for its printing costs?
ANSWER: Perhaps you should call the premier's office to get an answer to this question. The number is (250) 387-1715.
QUESTION: Before the last election, the Straight described Premier Campbell as a politician who wanted to cut taxes. Why is his government now so gung ho to collect taxes?
ANSWER: Perhaps the premier was wrong when he said tax cuts would pay for themselves. Now he is scrambling for revenue. According to the provincial budget, Campbell hopes to increase provincial sales tax revenue by almost $500 million per year by 2005/06.
QUESTION: What's in it for the tax collectors?
ANSWER: The Gordon Campbell government actually created a law that docks the revenue minister's salary by up to 20 percent if he fails to meet financial targets. This year, each government auditor is expected to collect $520,000 in sales taxes and $2.7 million in "overdue account receivable" revenue. That was reported in the ministry's "service plan".
Submitted on October 10, 2003 in By David.
