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Quebec Motion Passes to Impose Sale Tax on Netflix

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Quebec legislators passed a motion on Tuesday, to impose sales tax on companies like Netflix, reports the Canadian Press. The motion passed says it will “ensure the Quebec sales tax (TVQ) is imposed on all foreign companies that offer products and services online, notably in the cultural sector, as soon as possible.”

Last week the federal government announced a $500 million deal with Netflix, where the latter would bypass sales tax but rather invest in Canadian-made content over five years. The deal has been scrutinized in Quebec, where artists and the provincial government are not happy about it.

Quebec Finance Minister Carlos Leitao said “Netflix’s service is a taxable service,” adding “The issue is for the company to collaborate with the imposition of taxes. In order for that to happen, we need to know, very clearly, the position of the federal government.”

Sophie Pregent of Union des Artistes, the largest French-language artist union, says the Netflix deal is a “sweetheart deal” for the streaming company, instead of Canada’s cultural producers.

“I think (Joly) genuinely thought the deal with Netflix would assuage our concerns but it did the opposite. The fire has spread all over,” said Pregent, who walked out of a meeting with Heritage Minister Melanie Joly.

The Minister responded to say she “hears” concerns of cultural artists and disagreed Netflix gained a tax break other Canadian production companies don’t also receive. She has stated repeatedly there won’t be a Netflix tax, as the government’s position is to not increase taxes for the middle class.

Bell welcomed a tax on Netflix, since it also pays tax for its streaming service CraveTV. The company told the Hollywood Reporter “We’re asking for a level playing field for all participants that ensures maximum benefits for Canadian viewers and creators. That includes an equitable tax regime and balanced approach to investment in Canadian content.”

Netflix told the Hollywood Reporter it “pays all taxes when required by law.”

What do you think? Should Netflix pay tax in Canada? Would paying sales tax on Netflix make you think twice about subscribing?

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