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?