An old saying sums up the left-wing view of dealing with business. “If it moves tax it, if it keeps moving regulate it, if it stops moving subsidize it.” What’s moving now is online media so it shouldn’t surprise anyone that the Liberals are considering a Netflix tax.
Former Prime Minister Stephen Harper did warn about this in the last election, and was of course mocked for it but now that warning is coming true.
Two different headlines, from two different news organizations, citing documents from two different departments looking at two different taxes the Liberals could impose on Netflix and other streaming services.
CBC’s story is just out. The Globe’s came out a week ago.
Citing Heritage Department briefing notes for their minister, Melanie Joly, the bureaucrats are pushing for the HST, the sales tax to be applied to Netflix and other foreign streaming services, like Google Play or Apple. The argument is that Canadian based streaming services must pay HST, so foreign services should too.
The Trudeau Liberals signed Canada onto an international agreement just a month after they were elected arguing that the tax paid and collected should be determined where the customer resides, not where the service is purchased from.
Netflix, and it’s customers likely are not crazy about this idea but officially, the company is staying neutral, as in this statement cited by CBC: "Netflix collects and remits tax wherever we are legally obligated to do so."
Now sales tax is one thing, but it isn’t the only thing the Liberals are looking at imposing on foreign services.
The Globe and Mail reports that the Privy Council Office, the prime minister’s own department, held focus groups on a number of issues just last November and one of those issues was how to get more money out of your pockets to pay for Canadian culture.
They want to keep propping up the Canadian media fund, a big pot of money paid for by your cable subscriptions. But with many Canadians cutting the cord, there is less money flowing into it.
What to do? Tax something else.
According to the documents reported on by the Globe, there were four options presented to participants:
- Making telecom companies divert some smartphone and Internet revenue;
- Requiring “foreign companies like Netflix and iTunes” to devote a portion of revenues;
- Giving consumers the option of making a voluntary $2 contribution on their telecom or Netflix bill; or
- Making telecom companies add an app to every smartphone sold in Canada that would provide access to Canadian music, TV and film for between $5 and $15 a month or a flat charge of $3 on the sale of all smartphones.
The favoured options were forcing telecoms and foreign companies to pay up, as long as it didn’t increase their bills.
Just dandy! Charge those rich guys I buy stuff off of, but just don’t let them pass it on to me!
This, from the report:
“Of the four options presented, support was greatest for making telecom and foreign companies contribute to fund Canadian content. That being said, there was a strong desire for the additional cost to be assumed by those companies rather than being passed on to subscribers, especially with respect to cellular service, an industry that is considered uncompetitive. It was also mentioned that if foreign companies were required to contribute to fund Canadian content, there is also a risk that services such as Netflix decide to stop their Canadian distribution.”
Well at least folks realize that taxing companies to death might chase them away.
For decades Canadian cultural policy has followed the maxim stated above, ‘If it moves tax it, if it keeps moving regulate it and if it stops moving subsidize it.’
We have taxed the successful to subsidize the unsuccessful and it has created an industry that is stagnant in many ways, that can’t adapt and relies on handouts from government agencies.
And now the Liberals are looking at bringing this same business model to the digital age.
If they do, don’t expect things to last long as they are. You better get your binge watching in now.