‘Netflix Tax’ in Canada Inevitable, But One Thing is Slowing its Reality: Geist

The message various reports are sending to Canadians regarding the so-called “Netflix tax” is rather confusing, says Michael Geist, the Canada Research Chair in internet and e-commerce law at the University of Ottawa law faculty.

What the reports mention as the Netflix tax isn’t specifically the cultural contributions payments known as Cancon contributions. Canadian Heritage Minister, Melanie Joly, has been consistent in saying that the government will not extend mandatory Cancon contributions to Netflix.

Netflix

And the proposal is not specifically targeted at Netflix. Instead, it seeks to extend GST/HST to foreign-based digital services currently exempt from collecting and remitting sales taxes. This emerged as an issue in 2014 when the Conservative government raised the idea and also launched a public consultation on the matter.

By the way, the Canadian government isn’t the only one exploring the idea of extending sales taxes to the digital world.

With many governments fearing increasing lost tax revenue due to online sales and domestic companies expressing frustration with being placed at a competitive disadvantage (Netflix does not collect and remit sales tax, but CraveTV does), the extension of sales taxes to foreign digital providers appears to be a question of when, not if. The “when” depends largely on developing international standards on the issue.

The OECD (Organisation for Economic Co-operation and Development) has been actively working on it, so it is not a question of if, but of when. But Geist says it won’t happen in Canada until global standards are adopted at the OECD.

Technology enthusiast, rocker, biker and writer of iPhoneinCanada.ca. Follow me on Twitter or contact me via email: istvan@iphoneincanada.ca

  • Geoffrey Spencer

    It is a question of when not if so long as we have tax and spend Liberal governments.

  • 416iMac

    Did we miss this sentence “This emerged as an issue in 2014 when the Conservative government raised the idea…”

  • Fireeast

    GST not a problem, but to have is some heritage tax is non-sense. Our film industry is terrible because it is subsidized so much already. And they already support our industry as they carry almost all of CBC programing anyways.

  • wongnog

    I’m so confused. I have my Netflix linked to my iTunes account, and have ALWAYS been charged HST. Is that just me?

  • mcfilmmakers

    Learn to read

  • Geoffrey Spencer

    Read Conservatives raised the idea and consultations. Only Liberals would add a fake tax and call it Heritage Tax.

  • Geoffrey Spencer

    Raising idea and implementing an unnecessary tax are two different things.

  • raslucas

    The title reads like Geist is the one thing.

  • Adrian

    If you pay through iTunes, Apple collects the GST/HST for Netflix subscriptions. If you subscribe directly with Netflix there isn’t any collected and you’re supposed to self declare and remit it yourself

  • Adrian

    Did you read the article? Where does it say there is fake tax called a Heritage tax? They are not looking to force Cancon contributions on Netflix, this is only extending GST to cover foreign digital services that place Canadian digital services at a disadvantage.

  • OliChabot

    lo, supposed to self declare ? let’s say I never heard it

  • Geoffrey Spencer

    Read the newspapers.

  • 416iMac

    Whether the tax is necessary or not is debatable; as the article mentions not having Netflix and the like taxed puts CraveTV and other Canadian offerings at a disadvantage.

    As far as the difference between raising an idea and implementing…doesn’t the idea have to be raised before it is implemented? Also, given that the idea was raised in 2014 do we not think that it is quite conceivable that the Conservatives would have introduced the tax had they been given more time in office?

  • Geoffrey Spencer

    If you never question the governments need to tax something then you are giving them carte blanche to tax you on everything. There has to come a point to when the people have to say enough is enough with all of these taxes.

    The Conservatives started the conversation because of whining from Bell and Friends of Canadians. Having a conversation is okay, great in fact. More taxes should be challenged at all times. Question the need for the tax. To make it fair for Bell you say? Remove the tax totally is another option and this embraces Net Neutrality. Check out OpenMedia. This is just an Internet Tax for the Liberals to add to General Revenue because they are spending more than they promised in 2015.

  • 416iMac

    I definitely question any new taxes, no doubt. I also don’t mind paying tax if I see value for my dollar.

    Don’t get me wrong; I am not necessarily in favour of this or any new tax, I just was pointing out that despite the fact that it’s the liberals who may impose it, it was first bantered about by the conservatives.

    …ok, enough politics for me.

  • Aleks Oniszczak

    No significant difference between Liberals and Conservatives – their policy is the same – whatever makes the rich richer and the poor poorer is the course they will take. All their decisions are easy to understand once this is understood.

    Will taxing Netflix affect the poor more than he rich? Of course. So they will. And the opposition will pretend to be against it – no matter which happens to be the opposition at the time.

  • mcfilmmakers

    Nice bubble you got there.

  • raslucas

    I wonder if giving a strategic advantage to Canadian streaming services will create jobs to employ these poor people…

  • Aleks Oniszczak

    “Wow, taxes are lower, I guess I’ll hire some more people”, said no CEO ever.

  • raslucas

    Hey, Netflix doesn’t have a competitive advantage over Local businesses in Canada now, we should invest more into improving our services.