Netflix and Internet “Tax” Could Be on the Horizon: Geist

Michael Geist, the Canada Research Chair in internet and e-commerce law at the University of Ottawa law faculty, has today published an article in the Globe and Mail shedding some light on how digital taxes may play a key role in Canadian cultural policy as the government conducts a national consultation on Canadian content in the digital world.


According to documents obtained by Geist, “officials believe foreign sources of funding from international sales and joint productions could play a key role in bringing new money to the system.”

Apparently, the government hopes to introduce a series of new digital taxes, which obviously has good, bad and ugly consequences. The good thing, according to Geist, is the proposal to divert revenues from spectrum licences to cultural funding (effectively a spectrum tax invisible to consumers) and to extend sales taxes such as GST and HST to foreign digital services, Geist writes. That’s a good thing, because it would balance the power play in the market: just consider that CraveTV currently incurs sales tax, while Netflix doesn’t.

The bad, Geist continues, would involve the introduction of the controversial “Netflix tax“: This would require (for example) Netflix to contribute to the creation of Canadian content via a given percentage of revenues.

The ugly part comes if the Netflix tax proves to be a “non-starter”: The government may tax ISPs. As it turns out, Canadian Heritage Minister Mélanie Joly’s legislative overhaul could involve changing the law to make room for new taxes on internet services. This obviously means that internet access would become less affordable and could place connectivity above the financial power of low-income Canadians.

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  • Riddlemethis

    Hmm. I guess this is one way of ensuring that the internet will never be a staple utility like electricity and water. However, I don’t they will succeed. Access to the internet is becoming more vital and important each year.

  • TPH

    Holy crap why is this so convoluted? Charge HST/PST/GST depending on your location, use said tax to fund Canadian Content. Give Netflix an incentive to host Canadian content by enforcing Net Neutrality in Canada so ISPs can’t pull a Comcast.

    Considering that it’s a paid service, I don’t understand why it’s so hard to place a tax on it. Youtube, for example, is a free service, so no tax required.

  • Tim

    For the love of God, I don’t want to be taxed more to pay for government mandated Canadian content creation. It always ends up being some kind of stereotypical bland Canadiana history lesson or an Anne Murray special. We’re already paying for CBC to make f**cking heartland and the Murdoch Mysteries, both of which SUCK. Enough is enough.

  • erth

    the tax and spend liberals are not going away, unless you vote them out at every turn. the pc party would not do this. economics is not a strong suit for the liberals.

  • ruffdeezy

    This is what you get when you vote based on emotions rather than facts.

  • karinatwork

    Err… weren’t we supposed to keep the cost low for internet connectivity? Internet does not just mean consuming content like movies or music. It’s a service to keep connected. Tax Netflix and other On Demand services like Apple Music or Spotify, but keep your paws off my internet connection. The prices must come down, not up. It’s the connection to the world, for God’s sake. They must not tax that.

  • mcfilmmakers

    You’re right, the PC party doesn’t exist though. Nice fantasy world you live in!