THROUGHOUT HERITAGE Minister Mélanie Joly’s consultations on Canadian content in a digital world, the Liberal government held true to what its predecessors in charge of the country had to say about making Netflix contribute to Canadian content, somehow.
Say it with me now: “No Netflix tax.” It’s a political hot potato, because Canadians don’t want an extra fee attached just to their Netflix subscription (even though there are Cancon fees built into their pay-TV subscriptions).
However, what about at least forcing Netflix to charge Canadian sales tax on its service – something which over-the-top competitor CraveTV must do, because it’s a Canadian company. It automatically makes Netflix up to 15% cheaper across the country, depending on the provincial sales tax. It seems unfair to make Crave more expensive than a competitor.
Since it has no Canadian operations and offers its library of content over-the-top of the traditional system, Netflix (and any other foreign service like it) doesn’t have to charge HST. But, would it? Yes. The company does so when they must. We asked.
It’s official line, emailed to Cartt.ca, said: “Netflix collects and remits tax wherever we are legally obligated to do so.”
So, will the federal government make the streamer legally obligated to do so? We assume that will be addressed when the Minister makes public the results of her consultations on Canadian content in a digital world, the public consultation portion of which just wrapped up.
While the federal government can’t legally take sales tax revenues and direct them straight to the production of Canadian content, it’s no small amount of money. Recent surveys suggest Netflix has over 5.2 million subscribers in Canada, all of whom are now paying the new $9.99/month monthly rate. Applying the 13% HST rate of Ontario, that would bring in more than $81 million additional dollars to federal and provincial coffers from Canadian Netflix subscribers. That amount of money is roughly 25% the size of the Canada Media Fund.
So, the next question is, will the government act?
