Myth: The “Netflix tax” will raise prices for consumers!
Reality: This accusation is wrong on multiple levels. First, nobody has ever proposed a Netflix tax. Stephen Harper made it up in 2015, so he could oppose it. For purely political reasons, Mr. Trudeau jumped on the bandwagon shortly after.
Still, the so-called Netflix Tax isn’t the targeted punishment it sounds like: it’s just sales tax. Canadian companies collect sales taxes and send it to the government. California internet giants pocket it.
Most countries have laws that treat domestic firms favourably. In Canada, we do the opposite. We force our companies to collect taxes, but we let their main competitors operate tax free. In 2018, this crazy policy let Netflix pocket $208 million in sales taxes. That’s enough to finance a full season of The Crown. It’s also more than CBC spends on all English-language drama.
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And for those who care more about pricing than basic fairness, consider this: since Harper came out against the fictional Netflix Tax in 2015, Netflix has raised its prices three times. Meanwhile, the number of Canadian subscribers continues to grow. Joke’s on us.
That any of this is even remotely controversial shows how resigned we've become to the power of Silicon Valley. If we don’t support our own national media at this critical juncture, it’s not just the media that will be lost: it’s the nation.
This article was originally published by The Hill Times on February 5, 2020.