back to article Netflix and fill – our coffers: Canada mulls taxing vid streaming giant 5% of subs cash

The Canadian government will consider a new digital tax that would see Netflix required to set aside five per cent of its gross revenues. A consultation enthusiastically opened by heritage minister Melanie Joly and titled "Canadian content in a digital world" closed last week, but may not have produced the results she was …

  1. Grade%
    Trollface

    Hey look everybody! My VPN started working with US Netflix again!

    Canadian subscribers? We only have 1999 of those. Yeah, they all live in Newfoundland. The suckers.

    1. WatAWorld

      Re: Hey look everybody! My VPN started working with US Netflix again!

      Grade%, what would you guess Netflix offers in Canada compared to what it offers in the USA?

      It has gone up. I'm guessing Netflix Canada now 30% of the number of titles that Netflix USA offers.

      Netflix has never even really tried to succeed in Canada.

  2. Anonymous Coward
    Anonymous Coward

    Netflix aren't going to walk

    If it happens this is going to end up being 5% of their Canadian, not global, revenues, and that's not going to make Netflix walk away from the Canadian market. They hardly put up a fight when they got landed with paying VAT in the UK.

    1. Martin Summers Silver badge

      Re: Netflix aren't going to walk

      Remind me again who pays VAT?

      1. Yet Another Anonymous coward Silver badge

        Re: Netflix aren't going to walk

        In this case Netflix.

        If the customer sees a 20% rise in the price they are going to look elsewhere - they aren't going to consider that the money isn't going to Netflix.

        1. VinceH

          Re: Netflix aren't going to walk

          "If the customer sees a 20% rise in the price they are going to look elsewhere"

          ISTR Netflex recently* upped the price from £5.99 to £7.49 - so you're sort of right; that's a 25% increase, not a 20% one.

  3. John 104 Silver badge
    Mushroom

    Fucking Politicians

    Look! Something that is popular! Let's tax it.

    I swear, every year, the ridiculousness of taxing air on Total Recall gets a little closer to reality.

    1. Version 1.0 Silver badge

      Re: Fucking Politicians

      Great Idea, let's get rid of all taxes - after all, what have the Romans ever done for us?

      Apart from sanitation, medicine, education, wine, public order, irrigation, roads, the water system, and public health - all things that your taxes pay for.

      1. Youngone

        Re: Fucking Politicians

        While I agree, the Romans have done a lot for us, what I think John 104 was complaining about is the piecemeal way these tiny extras add up.

        If there was a fair way to tax everyone according to their ability to pay, we might wind up with enough to pay for all those roads, schools etc.

        There probably is a fair way, but I don't know what it is and I am not a tax expert, and from what I have observed the actual experts disagree anyway.

        1. Anonymous Coward
          Anonymous Coward

          Re: Fucking Politicians

          I believe poll tax was an attempt at a fair way. Now look what we've got stuck with.

      2. CanadianMacFan

        Re: Fucking Politicians

        I can't speak for the person to who you are replying to but I don't think they were advocating the removal of all taxes. This proposed tax is ridiculous though. It's a tax to prop up the Canadian movie and TV industry in order to provide Canadian content to the world.

        It's time for the entertainment industry to stand up for itself. Especially since so much of what is produced in Canada is shows for America. Hollywood likes to come up to Vancouver and Toronto because of the cheaper dollar and make their shows here. There are some Canadian shows made here that do make internationally, such as Murdoch Mysteries. Profits from these should be reinvested in the industry. Private investors should be found to back the shows. Instead of making the industry more dependent on government handouts they should be trying to get away from them. The industry needs to make better products and sell them across the world and then take that money to reinvest in new projects.

        1. Youngone

          Re: Fucking Politicians

          As far as I can tell Hollywood has always been a leech.

          If it's not "Hollywood Accounting" meaning every movie ever made loses money then it's demanding subsidies to make movies in your town.

          The Hobbit was made just down the road from me and cost my neighbours and I about $50 million.

          Then we had to pay again to see the stupid thing.

        2. Blank Reg

          Re: Fucking Politicians

          Trying to find private investment in Canada is very difficult. Without all the various tax credits very little media content would be produced in Canada.

          Now they could make such private investment even more attractive with changes to income tax, but I don't see that happening.

          1. Yet Another Anonymous coward Silver badge

            Re: Fucking Politicians

            So we are going to tax people watching shows on Netflix in order to give Hollywood movies bigger tax breaks to pretend Vancouver is New York?

            While blocking the streets and causing traffic chaos

      3. John 104 Silver badge

        Re: Fucking Politicians

        Hornets nest stirred. Job complete!

        Pesky work got in the way of watching this thread yesterday..

        No, I don't mean abolish all taxes. Don't be an idiot, Version 1.0. I'm all for it. But this opportunistic taxing that the US government does is sickening. We already pay taxes on our connectivity,be it cable or cellular (or both), over and above sales tax, federal tax, property tax, gas tax, snack tax, whatever tax of the week.

        The tax code in the US is such a mess that this sort of thing can be easily tacked on by our so called representatives for no other purpose than a money grab. How else can you describe it? Our infrastructure is supposedly paid for by federal income tax. State taxes take care of services, etc. So what is the tax for?

        Netflix pays their own money (earned by subscribers) to rent or create and deliver content. Cable companies already paid to have their infra laid out. So who needs it? Where is the benefit?

        As for the Canadian angle. Well, if they choose to tax the consumers bill by 5%, so be it. Price to pay for living in Canadia I guess. (Reminds me of the ridiculous tuner tax in the UK that I've read about). If they try to go for Netflix's profits directly it will be a fun show to watch...

    2. PushF12
      Flame

      Re: Fucking Politicians

      This is worse than a tax because it targets only one business to feed some economic parasites.

      This tariff is indistinguishable from protection money for a mobster.

      1. Marketing Hack Silver badge
        Linux

        Re: Fucking Politicians

        @PushF12

        The Canadian content mafia?

        "Nice video stream you got there, eh? It would be a shame if something happened to it, but we can do something a-boot that."

        (Tux--because if you squint he kind of looks like a ptarmigan.)

      2. Version 1.0 Silver badge

        Re: Fucking Politicians

        While I feel a lot of sympathy (and even agree) with a lot of the other comments here, I suspect that when you write "This tariff is indistinguishable from protection money for a mobster." you've never actually been in the position of having to pay protection money to a mobster - you still have all your fingers don't you?

        1. Anonymous Coward
          Anonymous Coward

          Re: Mobsters can't take everything

          Mobsters can't take everything you own and put you in jail without running risks, The government is far worst than gangs, they are the most powerful gang but a person doesn't know that until they are in a position of having a government taking everything.

          1. Anonymous Coward
            Anonymous Coward

            @Haefen - Re: Mobsters can't take everything

            Are you advocating anarchy ? Something tells me you wouldn't like it.

      3. keith_w Bronze badge

        Re: Fucking Politicians

        Actually it doesn't target a "single business", it brings Netflix into line with all the other suppliers of video. Additonally, should Hulu etc, decide to do business in Canada, they would be subject to the same rule.

        1. Daniel 18

          Re: Fucking Politicians

          No it does not. The largest national producer of video content is almost certainly the CBC, which gets a billion dollars a year to compete with the producers dependent upon private investment rather than raiding the public's wallets.

          Recently, it has decided that a billion dollars a year is not enough, and is asking for another 400 million a year.

          This is also a country that has a large levy on blank CDs on the grounds that you might put music on them. In theory, this is to go to copyright holders... but AFAIK, none has ever been distributed to them.

          Time to get the government out of targeted taxes and specific subsidies.

          1. Gis Bun

            Re: Fucking Politicians

            Does anybody buy blank CDs?

            1. Marketing Hack Silver badge
              Stop

              Re: Fucking Politicians

              @Gis Bun

              How much do you want to bet that the 5% excise tax on Canadian Netflix is at least partly because nobody buys CDs anymore? Its just like "sin taxes" in the U.S., supposedly put in place to divert Americans away from "demon rum" and smoking. Right up until people actually cut back their drinking and smoking, then the government starts raising other taxes because they got used to pocketing the tobacco and alcohol tax revenues.

        2. Daniel 18

          Re: Fucking Politicians

          No it does not. The largest national producer of video content is almost certainly the CBC, which gets a billion dollars a year to compete with the producers dependent upon private investment rather than raiding the public's wallets.

          Recently, it has decided that a billion dollars a year is not enough, and is asking for another 400 million a year.

          This is also a country that has a large levy on blank CDs on the grounds that you might put music on them. In theory, this is to go to copyright holders... but the rules are biased towards paying large media companies rather than independent artists and small labels.

          It is time to get the government out of targeted taxes and specific subsidies.

  4. Ole Juul

    This could get ugly

    Melanie Joly also has other ideas such as an ISP tax.

    1. Gis Bun

      Re: This could get ugly

      Uh. Why? Already paying federal & provincial taxes on my monthly bill.

  5. gerdesj Silver badge
    Angel

    Hat?

    Have you seen the size of the place?

    A quick Google and a fumble with The convertor gives the Big Country an extra 13 Wales on the soft southerner Trumpa Lumpers (*)

    Cheers

    Jon (**)

    (*) Don't know where that came from - possibly bottle two, glass one

    (**) Off of the large bit to the right of the eponymous unit of area

  6. Anonymous Coward
    Anonymous Coward

    5% of revenue earned in Canada, or 5% of all revenue?

    If the former, I don't think that's really a show stopper, though they'd likely raise prices in Canada 5% to make up the difference. If the latter, I can see them laughing themselves into a stupor as they pull out of Canada en masse - unless creating a subsidiary like "Netflix Canada" would be an option make "5% of all revenue" equal to "5% of revenue earned in Canada."

    1. Marketing Hack Silver badge

      Re: 5% of revenue earned in Canada, or 5% of all revenue?

      I'd imagine it is 5% of each Canadian customers monthly Netflix bill.

      1. Anonymous Coward
        Anonymous Coward

        Re: 5% of GROSS revenue

        The CRTC is not reasonable, it is gross.

  7. Barry Rueger

    GST

    5% is the federal Goods and Services Tax (GST), which applies to pretty much everything, much like UK VAT.

    Communications regulations are the domain of the Federal government.

    Unlike the US we generally don't see taxes levied at county or municipal level, aside from property taxes. It's pretty clearly defined who is allowed to tax what.

    On a simplistic level, Netflix is doing business in Canada, and in doing so can reasonably expect to pay taxes on that income.

    A large part of Netflix's success in Canada is the geo-blocking of competing services like Hulu and Amazon Prime. It's either Netflix for $10 a month, or cable for $75-100.

    Easy choice for many people

    .

    1. Anonymous Coward
      Anonymous Coward

      Re: GST

      Most taxation is on income, except for sales/GST type taxes that are on the price to the consumer. This is neither, it is on the company's revenue.

  8. WatAWorld

    To be Canadian is to be Shafted by Your Government

    These are the same people that got our government to tax CDs, DVDs, USB sticks and computer memory (alone or in a device) to be taxed with the proceeds being sent to them, through the various Canadian guilds and Canadian associations of corporate copyright holders.

    Earlier our wonderful government negotiated a free trade agreement, NAFTA, with the USA that didn't require free trade. No, manufacturers and importers are allowed to set special 'country prices' for Canada and it is legal for them to ban inputs from competitive sellers outside of Canada. For home electronics, for example, we generally pay 30% more than Americans. For bathroom products 20% more, and so on.

    Sad thing is, our press here is so meager, there is so little competition, newspapers and TV stations don't even bother to do research and reporting. Government is free to curry favour with special interest groups, including special interest corporations by ripping off the middle class to give more money to mega- and multi-millionaires.

    1. keith_w Bronze badge

      Re: To be Canadian is to be Shafted by Your Government

      Only CDs have the copyright levy, DVDs USBs and computer memory do not. You do however pay normal sales taxes on all of these items, including the copyright levy.

  9. Anonymous Coward
    Anonymous Coward

    Canada and China not so different

    "But in the digital world where Canadian citizens can easily and readily access services from anywhere on the globe through their internet connection..."

    That is not the case, even the VPN option is being targeted by Canada. Canada has long held that the media Canadians are exposed do must be acceptable to the Canadian government. It is the very idea behind the CRTC who sees it as their job to protect Canadians from global information, er competition.

    Keep in mind this is a country where citizens are not allowed to access private healthcare forcing many to leave the country for treatment or if too poor to travel, literally die waiting.

    1. Anonymous Coward
      Anonymous Coward

      @ Haefen - Re: Canada and China not so different

      Are you advocating the "Pay and your child will live" health system like in US ?

      1. Nunyabiznes Silver badge

        Re: @ Haefen - Canada and China not so different

        @AC - or like Canada's system where everyone pays and your child dies anyway? :troll:

        Both systems have their advantages, but now that the US has a hybrid clusterf*ck it really doesn't work at all. Prices have skyrocketed and the only people that aren't being hammered are the truly destitute - who were getting free healthcare anyway because the hospitals were writing off those bills eventually. I honestly don't personally know of anyone that was turned away because of lack of ability to pay. They might have had to go to the ER instead of a private doctor's office, but they got taken care of.

        1. Anonymous Coward
          Anonymous Coward

          Nunyabiznes - Re: @ Haefen - Canada and China not so different

          The Canadian health system is what it is because everybody here salivates looking at the US model where you can rip off sick people in all impunity.

          And by the way, I wouldn't use the word honestly before doing some research. If nobody's being turned away for not paying, how are going to make any profit ? How does the US health care system avoid bankruptcy ?

          1. Nunyabiznes Silver badge

            Re: Nunyabiznes - @ Haefen - Canada and China not so different

            AC,

            I said *I* didn't know of anybody. Has it happened? Probably. But there were many avenues to health care available before ACA and you might have to get off your ass and look for help.

            Our system worked fine for many years until the freeloaders overwhelmed the system by refusing to have health insurance and then multiplying the problem by not taking care of themselves. Now we have doctors retiring early because it just isn't worth the hassle dealing with all of the government bs. I'm not talking about the specialty care docs that make enough per hour that they only have to see a few patients and they can afford to have someone to do the paperwork. I'm talking about primary care physicians that used to work with people who couldn't afford full charges, who volunteered at clinics, had reasonable rates, etc. Many have decided to either specialize or quit and go teach or in one case *I* know of retrain as a technician on medical equipment because the take home pay was better per hour. Work less take home the same.

            If you don't think our system has gotten significantly worse you are not paying attention. Since apparently you don't live here that is reasonable.

            It does astound me that so many people who don't live here and have never experienced the level of care available are so vociferous about our system. Hey, if you like your system more power to you. Just don't make us ruin ours by trying to poorly imitate yours.

    2. Queasy Rider

      Re: forcing many to leave the country for treatment

      Are you referring to the Clinton era when their attempt at universal health care was sabotaged by right wing TV parading a Canadian woman on screen proclaiming loudly the she had had to come to the States for an advanced procedure unavailable in the Great White North? What they criminally neglected to point out is that the Canadian health care system paid those bills for overpriced American specialists and hospitals to take care of that unappreciative whiny bitch. Or maybe you are referring to the spoiled crybabies in Canada who think they can jump the line of those waiting for expensive elective procedures that are stretching the budget to the limit.

      As a strongly anti-socialist friend in Canada said to me four decades ago, "Socialist Canada won't allow anyone to die for medical reasons." I can only sadly add: "But they will let you suffer, it's all they can afford." I speak from the point of view of a person whose 55 year old sister in Canada is presently painfully recovering from her long awaited third hip replacement.

      I encountered a man in a cast, a decade ago in Louisiana, angrily waving a crutch around while arguing that he wouldn't have that leg anymore if his accident had happened in Canada. This was his reasoning: His American plan wanted to simply remove his leg, and he had to fight vigorously with them to perform and pay for the procedures to save it. Therefore the Canadian system had to be worse because they would have just automatically taken off his leg. He was so angry and adamant that I didn't dare point out to him that he was presuming, and conversely, maybe the Canadian system, not being profit oriented, would have first tried everything possible to save the leg before suggesting it come off. No health system is perfect, I just believe the Canadian one is less imperfect than the American one.

  10. Gis Bun

    Netflix Canada get maybe a quarter of the [good] content that Netflix US gets. Takes a few months before it comes to Canada.

    BTW, for a politician, Melanie Joly is quite hot. :-)

    1. Nunyabiznes Silver badge

      quarter of the content?

      I didn't realize this.

      Why does it work that way?

      I guess that is alright if you also only get 25% of the crap. Just your luck you probably get all of the Honey Boo Boo reruns but none of the National Geo. specials.

  11. Anonymous Coward
    Anonymous Coward

    Canadian healthcare, insanity.

    Many Canadians remain completely ignorant of healthcare options thinking the options are the one we have where healthcare is routinely delayed and denied or the American system where Canadians believe no one but the wealthy ever gets treatment of any kind.

    The fact that doctors and hospitals are not allowed to work outside the Canadian system, even when the system is failing should have Canadians hanging their heads in shame or demanding improvements. Instead we see they prefer to attack the messenger and defend waiting lists and queues for ER treatment.

    If Canadians would pay attention to those dying and have died, in particular those without many resources, they would not be able to ignore the body count or how the system fails to report, record or even track.

    Personally knowing more than one Canadian who has died on waiting lists or due to our current system, and one in particular who officially did not die on a waiting list even though he had been waiting for many months to be put on the list (which is how many Canadians live with themselves "they weren't even on the list not our problem") I cannot be bullied into silence like so many others.

    Every system will have losses, people dying as a result of an imperfect system but the Canadian systems in which the level of treatment available depends on everything from wealth, location, political status (officials have a different system), luck, even race (part of Canada's still existing apartheid system has different funding for Aboriginals) can be made so very much better. The fact that top politicians flee the country for emergency treatment should be making it clear we can do better.

    Canada has more valuable natural resources per capita than any other country, Canada can do better for it's citizens when it comes to wealth and healthcare, but not if they are bullied into compliance or silence.

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