Published on June 1st, 2018 | by Alan Cross2
Get ready to having your streaming service taxed. But this is actually a good thing. Here’s why.
When we pay for Netflix, Spotify, Apple Music, Britbox or any other streaming service for audio or video, we pay ZERO tax. We also don’t pay any tax when we buy/rent anything from iTunes. Cool, right?
Well, maybe from the viewpoint of your wallet. But it also means a steady flow of cash out of Canada to foreign entities. This gives them an advantage over domestic companies who do have to pay tax.
There’s another problem, too. Domestic broadcasters and other cultural gatekeepers are required by law to invest in the creation and support of Canadian talent. Radio stations, TV networks and so on are obligated to plough a ton of pre-tax dollars into creating new Canadian culture products, ranging from funding indie musicians through programs like FACTOR to various television and movie production funds.
The foreign streamers? Nope. They have no such obligations. They just siphon away money without putting anything back into Canadian culture.
Canadian broadcast types have been pushing the CRTC on this unlevel playing field, which has resulted in a new Commission report that recommends music and video streaming companies be federally regulated.
The proposal says that Spotify and Netflix and all the rest of them should also be required to fund local/domestic content lest our own companies be completely decimated by foreign interests.
Yes, regulators will regulate. It’s what they do. But in this case, you can see why this could be important. This new money would go to things like the Canadian Music Fund and the Canadian Media Fund. With contributions from domestic producers in decline because of changing technologies and consumer habits, this would top things up.
Another part of the report urges that we do more to promote Canadian content on the Internet (podcasts, webisodes, music, etc.) more vigorously internationally.
Great, right? Tough to fight that logic, especially since we live right next door to the largest exporter of popular culture in the known universe. If we don’t do something to protect out own, we risked being swamped by American broadcasting/streaming interests and losing our Canadian identity.
The bad news? Higher prices for us. You know that Netflix and Spotify would just pass on these costs. But isn’t it worth the sacrifice?
Read the whole report here.