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Netflix Tax in Canada Still Isn’t Happening: Finance Minister

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Federal Finance Minister Bill Morneau has reiterated a Netflix tax would not be happening, as it would impact the wallets of middle-class Canadians, reports the Canadian Press.

Heritage Minister Melanie Joly said a couple days ago she never agreed to exempt the streaming giant from sales tax, as part of a recent $500 million deal to create original content in Canada.

The issue has impacted Joly politically in Quebec, as artists and the province want foreign streaming services taxed, saying the Netflix deal acts as unfair subsidies. Quebec has voted to tax services like Netflix, with a motion passing two months ago to impose sales tax.

Joly was pressed on the Netflix tax issue on Friday, but diverted questions to Morneau, as the finance minister is in charge of taxation.

Morneau told the Canadian Press on Sunday there are still no plans to impose a Netflix tax, following in line with what Prime Minister Justin Trudeau has said in the past. #becausemiddleclass

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  • Jay

    They better not tax us more for a service that we can get even cheaper elsewhere because quebec artists think they are in the same league as netflix

  • Olivier

    What a dumb way to help our economy. Giving a tax break to a foreign company while asking for our canadian providers to perceive taxes. Everyone needs to be on the same level. If Netflix doesn’t have to perceive taxes, CraveTV and Illico should not either. It’s like Verizon comes to Canada but doesnt have to charge taxes, how would you think the market would react ? Customers would get to Verizon to save money, therefore undermining our economy while advantaging a foreigner that does not employ canadians, pay/perceive taxes in Canada.

  • Aaron W

    You seem like an intelligent person, yet somehow you missed the biggest, most important part of the math… Why would you tax a purchase, when that company turns around to not only spend hundreds of millions of dollars in your country to produce media, but to also purchase the distribution rights to existing media, which are both taxable.
    Not only that, but media production has other benefits to the local economies where filming takes place, hotels, restaurants, fuel, etc etc….

    And these whiny jerks complaining about how its unfair are fools. Do companies not take advantage of Canadian Film Credits? Which, for eligible productions, can be a credit 25% of the labor costs? So these bitching quebecers, and associated media teams, are getting 25% off media they produce in the form of a tax credit, and they are going to complain about something not getting taxed at 12% or whatever? Hypocrites….

  • clee666

    Politicians in Quebec doesn’t know what the ‘Netflix Tax’ is and confuses everyone with the sales tax.

  • Olivier

    Maybe we don’t hear the same things depending on the province we live in, but from what I have read, Netflix will be able to benefit from a tax credit that the government will issue to them if they produce content in Canada. Which means, they won’t perceive taxes, but will be able to use, in a sense, the taxes Bell collect and get them to produce their own shows. Isn’t that a big disadvantage to our national companies ? I don’t see how people can think it is fair for Netflix to get a tax-perception break when our own companies don’t get the same advantage. It is making an american competitor more competitive while make our own companies less advantageous. Do you really think a canadian company like Bell could get to the US and not perceive taxes in each state ?

    I want my canadian companies to have the same advantages and struggles as an american who come to our country to make money. We should aim to make our own companies more competitive, not help Netflix get more subscribers because they are the only one not perceiving taxes. It’s like if I need to buy a book in my local store that will charge me an extra 15% for taxes, but I can buy it on Amazon without paying any taxes. What do you think most people would do ? Buy it where its the cheapest. Not because Amazon is better, because Amazon as a competitive advantage that my local library does not. That’s what unfair.

    The economy is changing. the way people buy stuff and spend their money is changing. And we have to make sure our country is ready to deal with those changes. If we decide that online streaming services are not taxed, then all streaming services should not be taxed. But if Illico on Demand, iTunes, CraveTV and others in Canada charge taxes, then it should be the same for a foreign competitor that is not even contributing to our economy as the others are.

  • So Young

    You think its normal to not have the sale tax on an entertainment service while other similar service in Canada have ones? its completely illogical and shows the incompetence of the Trudeau government

  • So Young

    So then, why other country tax Netflix without any problem? Sale tax should be the same for every service. Why Netflix user should not have to pay tax but people who actually encourage productions of Canada or local provinces (like Cable TV, club illico in Quebec) have to pay them? Plus, if you subscribe to Netflix via iTunes, you pay the sale tax so it’s just completely illogical and the government should do something for online sale tax.

    Its the same problem with Microsoft and Sony. On Xbox marketplace you pay the tax, on the playstation network you dont pay tax. Its just deloyal competition in my book.

  • So Young

    Its not a Quebec problem. Netflix is an entertainment service, like Bell Fibe, Rogers or Videotron services and we, Canadians, have to pay tax on those local services. Sale tax should be consistent and be there for every services. Its like if you go to eat to Tim Horton’s you will have to pay tax, but not if you go to McDonalds.

  • Aaron W

    But your suggestion that Netflix doesnt contribute is completely false. Media distribution rights can cost upwards of hundreds of millions of dollars for a catalogue…. Do you really think the govt of Canada wasnt receiving any taxes from those purchases from the canadian subsidiaries of MGM and the likes?
    Not to mention what netflix plans for its future relationship with canada..

    So while your argument makes sense for many other applications. It doesnt stick here nearly as well as you think.

  • Jay

    Except the choices here a between multiple online platforms and between netflix amazon prime and other video services… its not like netflix is getting a tax break … its OUR streaming services that are being taxed to high heaven

  • Olivier

    Correct me if i’m wrong, but if Netflix purchases canadian distribution rights to Marvel, for instance, wouldn’t they purchase it in the US ? Like, if Marvel HQ is in the US, would Canada gets a cut from it ?.

  • Aaron W

    I believe they would. Because Disney (Marvels “Owner”) has their Canadian office in Toronto. I apologize for copying and pasting but it was easier 😛
    “Walt Disney Company (Canada) Ltd, is a privately held company in Toronto, ON and is a Headquarters business.
    Categorized under Copyright Buying and Licensing. Current estimates show this company has an annual revenue of $18,612,480 and employs a staff of approximately 80”

    All large media companies have some sort of canadian licensing Headquarters. All declaring income on said transactions and being taxed appropriately.

    So yes, I would imagine they would be taxed at the corporate rate of 38% (unlikely they pay that much though).

  • Olivier

    Thanks, im learning every day. It is not the main point though. What I feel like is incorrect is that we are asking other providers like crave tv and Illico to perceive taxes (they would pay distribution rights too), while we tell Netflix not to do so. It is giving Netflix an advantage while our own national companies gets a disadvantage. At the end of the day, you have two choices : Going to Walmart for your groceries and not pay taxes, or going to Loblaws for your groceries and having to pay taxes. Which one would you choose ? You’d clearly consider Walmart just because you are saving money.

  • Aaron W

    But were talking about Canadian telecoms here…. With a long standing history of being notoriosly greedy and anti-competitive.

    For example, did you know that you should be able to put a TV tuner card into your modern television so that you dont need to purchase a cable box? The guide even shows up on the TV itself. Theyve had this ability for over a decade, and the service is available in many markets. Except ours.

    And since WERE the ones who pay the sales tax, I couldn’t care less about our telecoms. Maybe it’ll drive them to try harder to not rip us off financially?.

    Thats my two cents.

  • Olivier

    That’s two completely different issues.

  • Aaron W

    Not really, youre coming to the defense of canadian telco’s saying they have to perceive taxes. That was literally your last argument….

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