Streaming Companies Like Netflix, Apple Should Be Taxed GST Says Minister


The Broadcast and Telecommunications Legislative Review Panel released its independent report yesterday, recommending various changes to Minister Navdeep Bains of Innovation, Science and Industry and Minister Guilbeault of Canadian Heritage.

The 235 page report from the panel, chaired by former Telus executive Janel Yale, suggests more regulation of how internet sites and online streaming services should operate in Canada.

One of the panel’s suggestions is to rename the Canadian Radio-television and Telecommunications Commission to the Canadian Communications Commission, because the existing name “is out of step in a world that has moved beyond conventional radio and television stations, and in which telecommunications now encompasses a wide range of electronic communications.”

The panel also dives into how all media content should be regulated by the government, such as news, either through license or registration and also be required to contribute to Canadian content.

University of Ottawa law professor, Michael Geist, has a breakdown of the panel’s report. In regards to the section about internet content, he writes:

Yet the strengths of the telecommunications and consumer rights portions of the report are overshadowed by a stunning set of recommendations related to Internet content, some of which are unlikely to survive constitutional scrutiny, likely violate Canada’s emerging trade commitments, and rest of shaky policy grounds. If enacted, the Canadian Internet would be virtually unrecognizable with the CRTC empowered to licence or require registration from a myriad of Internet services, mandate what Canadians see on those services, and intervene in commercial negotiations.

The report also says app stores and devices should include Canadian discoverability requirements. The panel calls out Apple’s HomePod and how it was marketed to only support Apple Music and not other services such as Spotify. Here’s the passage from page 148:

In addition, app stores and devices, along with the operating systems, application programming interfaces and preloaded applications, play an essential role in determining what content or services are accessed on the Internet. As such, they can significantly influence the discoverability of Canadian content. Some content and service providers are now selling devices that can prefer their own affiliated media content services. For example, early announcements regarding HomePod speakers seemed to imply that they will only give users access to Apple Music and iTunes and not to competing online music services, such as Spotify.154 In this context — to the extent that undertakings curate (as a primary purpose), aggregate, or enable the sharing of audio or audiovisual content, or alphanumeric news content — they should be subject to discoverability requirements.

Heritage Minister Supports GST/HST from Streaming Services

Heritage Minister Steven Guilbeault suggested at an industry conference in Ottawa today he would be in favour of streaming companies like Netflix, Apple and others to start collecting GST/HST, according to The Globe and Mail.

“I think that’s about fairness. Everybody is paying the GST in Canada, I don’t see why some of the richest companies in the world shouldn’t pay GST in Canada,” said the Minister.

The panel’s recommendation states, “We recommend that the federal government require foreign media content undertakings to collect and remit the GST/HST.”

The Minister also hinted he would be in favour of services like Netflix to invest in more Canadian programming, saying, “They are already spending money in Canada, all we will be asking them to do is to do it in a more organized way and to ensure that we have Canadian cultural content that is available for Canadians and for audiences around the world,” said Guilbeault.

Any recommendations in the panel’s report that will require legislation changes would require support of the opposition, as the current government has a minority mandate.