JURISDICTIONS AROUND THE world are moving to make sure foreign over-the-top media companies such as YouTube, Netflix and Amazon contribute to their local economies.
The latest move came last week when the European Union finalized a new directive requiring Netflix and others like it to ensure 30% of its library is stocked with made-in-Europe TV shows and films. On top of that, the EU’s new rules will require streamers to invest in locally made content.
The EU already has regulations on the books which ensure its member country media companies invest in and display quotas of locally-made films and TV shows and while some say such quotas are outdated, others say they’re necessary to preserve a home-grown media industry and to tell local stories.
Sound familiar?
Then back at home, a House of Commons committee further muddied the waters for the federal government on this issue when it recommended last week that rules be changed so foreign digital players be made to collect sales taxes. Committees always have a majority of MPs from the ruling party, so the Liberals on this one must have missed the memos from Prime Minister Justin Trudeau who has simply parroted former PM Stephen Harper’s well worn “no Netflix tax” line since the Liberals were elected whenever he was asked.
The report from the Standing Committee on International Trade recommended “the Government should work with other countries in ensuring that online sales, and the profits earned by firms making such sales, are taxed in the country where the products are consumed and where the economic activities that created the income occur,” and that “the Government of Canada apply sales taxes on tangible and intangible products that are sold in Canada by domestic firms and by foreign sellers, including when such sales occur using an e-commerce platform.”
Will the government listen to its own committee? Unlikely. A great number of such committee reports are simply shelved and never read except by the poor folks who write them (and the odd journalist).
However, with ever more people choosing to get ever more content over-the-top and with the US$8 billion content budget of Netflix alone now more than double the annual revenue of Corus Entertainment and Bell Media combined (companies which are responsible for providing thousands of middle class jobs…), one would think our federal government will have to seriously consider coming up with something smarter, more innovative, or with more depth than just repeating the “no Netflix tax.”
This is a deep, complex, global issue with much at stake for industries in Canada and it’s well past time to hear something more substantial from the PMO than those same three words.
