A new government report recommends that Canada makes streaming companies like Netflix fund and promote Canadian content. It also suggests a sales tax on digital services such as Netflix, Apple, Spotify, and Amazon.
Technically, the report states that “We want to be clear that we are not recommending that Canadian content be supported by the so-called 'Netflix Tax,'” But experts say the sales tax is basically a “Netflix Tax” so that means you’d ultimately be paying more for your streaming services.
The report, released Wednesday, has 97 recommendations in total, on how to regulate broadcasting and telecommunications.
Other recommendations include an ad-free CBC, which would be a major change for Canada’s public broadcaster which currently gets $1 billion in funding from taxpayers annually. It recommends the CBC wean itself off advertising over the next five years and just use that government funding.
The report also calls for sweeping rules around what the Canadian Radio-television and Telecommunications Commission (CRTC), the national regulator can access when it comes to what you do online.
According to Michael Geist, Canada Research Chair in Internet and E-Commerce Law, University of Ottawa, this is a “massive regulatory grab” that “would create the most regulated Internet in the OECD and grants extensive powers to the regulator to influence what we see online.” It may also conflict with Canada’s current treaty obligations including the NAFTA trade deal.
Ian Lee, business professor, Carleton’s Sprott School of Business, calls it an “authoritarian approach” to regulation—similar to what he has seen in China and Russia. But these are recommendations and getting them through Parliament is unlikely in his view. Some would likely face a court challenge as well.
He says these recommendations might be popular with certain politicians, but they’re not going to be popular with people like his students, who will ultimately have to pay more to watch the content they want. “Nobody watches Canadian content out of patriotism,” he said.
The report was prepared by a panel of six experts over the last year and a half. It will be used by the federal government to make changes to Canada’s telecommunications and broadcast rules in the coming year.
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