October 19, 2016
Why Canada May Start Making You Pay A”Netflix Tax”
Nowadays, there probably isn’t one person in Canada who doesn’t binge-watch shows and movies on Netflix. Or, if not Netflix, some other streaming service that offers an array of programs for a monthly fee.
That fee, however, may become a tad bit more expensive if the Canadian government steps in. Whether you’re watching shows on Netflix, Hulu, or any other streaming service, a federal tax may be implemented that will force subscribers to pay an extra fee.
As of now, most of the major streaming services are all based outside of Canada, meaning none really have to pay any corporate taxes. And since such streaming services don’t operate within Canada, no HST or GST is charged to Canadian clients.
Also, since streaming services are removed from next-to-all national regulations, none have to pay into the Canadian Media Fund, a public-private organization created by the Department of Canadian Heritage to help finance new pieces of Canadian-made media.
All in all, Canada receives almost no monetary gains from streaming services. That doesn’t sit too well with the Canadian government. Netflix subscribers (and all other streaming service users) will likely have to pay up.
In an interview with CTV, Canada’s Heritage Minister Melanie Joly spoke about the issue of streaming services, commenting how “all scenarios” were being explored when it comes to such digital platforms and their relationship with Canadian media.
At one time the idea of forcing streaming services to pay a fee to the Canadian Media Fund was proposed, but Joly has gone on the record stating that won’t happen.
So how will the Canadian government create a means to benefit from streaming services? The likely result will be an added GST charge to subscriptions.
Joly could not comment whether or not a “Netflix Tax” will happen, how it will work, or what path the Canadian government will take in the context of streaming services. All that can be confirmed is the Canadian government is working towards a best-case scenario.
Unfortunately, as is often the case when it comes to the government and the opportunity to make extra money, a tax on citizens is usually seen as the best way to go about things.
Implementing a Netflix Tax will fall on the shoulders of the minister of finance, and Joly did state she would be speaking to Bill Morneau on the matter.
As it stands right now, you won’t be charged a sales tax for burning through every season of “Friends,” but that may change in the near future.
Featured image courtesy of: Wikimedia