Documents Reveal How Ontario Spent Months on “Netflix Tax” Proposal

University of Law Professor Michael Geist has revealed the Ontario government “spent months” in preparing their 2014 submission to the CRTC in support of a tax on online broadcast services such as Netflix:

Yet according to documents obtained under the Freedom of Information and Protection of Privacy Act and reported here for the first time, Ontario government officials spent months developing a submission in support of a Netflix tax. Work on the issue started in early 2014 as the government retained McCarthy Tetrault, a leading Bay Street law firm, to produce a report on policy options, and hired Rita Cugini, a former CRTC commissioner, to provide editorial services.

The revelation surfaces after Ontario had publicly urged for creating a “level playing field” for traditional broadcasters back in September (by taxing Internet video), an idea that was rejected by Canadian heritage minister Shelly Glover. This resulted in a “political firestorm that internal documents reveal left [Ontario] officials scrambling to engage in damage control,” explains Geist.

Ontario Minister of Tourism, Culture and Sport Michael Couteau has since backtracked on the province’s stance, with the latter’s press secretary reiterating last Friday “We are not considering any new taxes on Netflix, YouTube, or any websites.”

What these documents obtained by Geist reveal is Ontario spent time and money on a position where consumer interests were ignored, despite internal documents revealing the public would be unhappy with the tax.

In its own submission to the CRTC, Netflix noted a tax on the service “might translate into an increase in price without … a commensurate benefit for Canadian content, its producers, or Canadian consumers.”

Supporters of a tax on services like Netflix include Rogers and recently the Canadian Association of Film Distributors and Exporters (CAFDE), which all argue an “un-level playing field”. A Rogers executive also reportedly called for the shutdown of VPN services in Canada to enforce copyright and piracy.

Canadians have more media viewing options nowadays away from their stationary television sets. Services like Netflix can be viewed from smartphones, tablets and on the web.

The CRTC is set to reveal its latest TV broadcast policy decision tomorrow, which Geist believes will not support a tax on Internet streaming services such as Netflix.

What do you think? Should online streaming services such as Netflix be taxed?

Founder and Editor-in-Chief of iPhoneinCanada.ca. Follow me on Twitter, and @iPhoneinCanada, and on Google+.

  • Geoffrey Spencer

    The Ontario Liberals are always looking for a new tax to slap on us. What’s next? The air we breath?

  • Bill from Peterborough

    No, no new tax on this. For what purpose? And why is Rogers and other groups so anxious for this? Because they want the government to do for them what they seem unable to do for themselves: compete with new innovation. Well, there is a proper response for businesses who can’t do that – get out of the field, or die trying. It’s not the government’s role to protect multi-billion dollar companies.

  • Dave

    I believe that all the “civil servants”, elected or otherwise, who were involved in this disgrace, should have their income garnished until all monies paid out have been recovered. If they quit, take their pension. If they try any form of protest, terminate their employment with extreme prejudice. i.e. no “package” whatsoever. Heck, if they try anything, have them named in Parliament.

    Why to we, the people, continue to allow our servants to serve, no, rule us so poorly?

  • CanucksGoals

    Any business, that’s making profit in Canada, should be charge on tax. The tax is going back to the public anyways. I don’t see why Netflix should be exclude from it. If Netflix can be excluded on tax, why can’t my Shaw cable bill be the same?

  • Bill from Peterborough

    You argument has some merit, I won’t deny you that. I still think that because I’m paying tax on my Internet subscription, that is good enough. But my main point I wanted to drive home above is that the government attempt to tax Netflix seems to have been moved by the pressure that Rogers, et al., was applying, and that the government has no business (pun intended) in catering to them in this way. That was what got my ire up.

  • dudemaster

    Carbon tax…. It’s sort of an air tax.

  • runner

    3 simple words NO politician can ever understand: NO NEW TAXES

  • Ryan

    The tax goes back to the public?
    You’re partially right. I guess current and retired government employees are part of the ‘public’. Got to pay those inflated retirement pensions (that they never put into), and those large bonuses and travel expenses (for them and their families)!!!

  • disqus_MgNZdGvnX4

    How did this turn into an argument about the public service? Stick to the topic. Large bonuses? Travel expenses? where the hell do you get your information? Tony Clement? You need a more reliable source.

  • Ryan

    We’re talking about an added tax, are we not?
    I simply replied to a comment saying these taxes go back to the public.

    Also, have you not been following any politics, and the corruption that lays within?

    I have no issues with a new tax, whatever it be for… although have a look at where our tax money REALLY goes, and how it’s used.

  • disqus_MgNZdGvnX4

    I agree. I’m against this tax too. I don’t agree, however, that public servants in general should be thrown under the bus based on a few high-profile, highly-paid bad apples (e.g. senators, MPs, etc.).

  • Ryan

    Perhaps it’s cause I live in Quebec. It may have turned me biased, so many budget promises that dissapear, never to be spoken of again, followed by these bad apples getting nailed for overspending on travels, and other luxuries. They already make inflated salaries, and need to use public money to fund non-business activities. Our gas prices are severely taxed, however this money is supposed to be put back into our roads, take one drive around here, anywhere, and you’ll see thats not happening. Our major bridges and tunnels are all falling apart, nearly knee deep potholes that get patched, rather then repaired, etc. I’m perhaps basing this too much on a provincial level, but every other week another is getting brought in for something financial related.

  • Ronin

    And your reasons for being against this tax are what?

  • disqus_MgNZdGvnX4

    Because it’s unnecessary and way too opportunistic. It seems as though the Ontario government wants to capitalize on the popularity of Netflix and the like. If they start taxing certain websites, then what’s next?

  • CanucksGoals

    I understand what you mean. But it can actually set a bad example for Canadian businesses. So companies can now located anywhere around the world except in Canada, while providing services to Canadians virtually and avoid tax. Any company that’s milking money from us, Canadians, should contribute one way or another back to Canadians. What the tax money is going to be spend on is different topic.