Tax Netflix but no Netflix tax

By David Charbonneau
October 19, 2017 - 5:29am

KAMLOOPS — Netflix should be taxed but not as earlier proposed with a so-called “Netflix tax.” That proposal would have seen increased costs to access the internet. A more properly named “internet tax” would have targeted more than just Netflix. It would have increased costs to access banking, education, commerce, health, social media, and email, and a myriad of services becoming ever more essential to daily life.

Netflix should be taxed, not only because similar Canadian services are taxed but because revenue collected would pay for Canadian content. Heritage Minister Melanie Joly has opted out of taxation and instead has agreed to the investment of $500 million by Netflix for Canadian production.

The announcement is not news. Netflix already shoots films for American consumption like Bates Motel in Vancouver -not much of a Canadian story. The only difference in the announcement is that the amount to be spent was specified.

However there’s no guarantee of Canadian stories, only production. That bothers Quebec where culture is linked to language.

French language quotas apply to other TV broadcasters in the country. “How can we abdicate on this issue without requiring a proportion of original French-language content? I am speechless,” said Luc Fortin, Quebec’s minister of culture and communications. As a result, Quebec plans to apply a tax on Netflix.

Canadian video-streaming providers are taxed, such as Telus’ Pik TV and Bell’s Fibe TV. Why not Netflix? The standard answer is that Netflix doesn’t have a physical office in Canada. They say that they can’t enforce a sales regime on foreign businesses. Tracking down customers in a digital age may be hard but it can be done says business reporter Barrie McKenna:

“But it’s not impossible. Several developed countries have already moved to tax online services, including Japan, South Korea, Australia, New Zealand, and South Africa (Yes, please, tax my Netflix, Globe and Mail, Oct.7, 2017).”

In a public statement, Netflix is trying to clarify things. Corie Wright, Netflix’s director of global public policy, didn’t close the door to taxes. “Netflix follows tax laws everywhere we operate,” said Wright. “Under Canadian law, foreign online services like Netflix aren’t required to collect and remit sales tax.”

Wright also addressed the content question in a typically American way. “Internet-native, on-demand services like Netflix are consumer-driven and operate on the open internet, she said” This view promotes the view that American culture is not culture, as such, but entertainment. And if the world wants to buy American entertainment, who can argue against it?

Wright’s comments should bother Canada’s English speakers as well.

The exportation of American culture is not only big business but it perpetuates U.S. global hegemony. The values conveyed in U.S. productions are not necessarily Canadian values. One pervasive value is American exceptionalism: that the U.S. is unique among nations particularly with respect to its ideals of democracy and personal freedom and it’s the duty of America to export, and impose if necessary, those values on others.

Canada has no such delusions of grandeur. We need productions that reflect a more conciliatory view of the world.

Minister Joly should resolve the matter by taxing Netflix.