Culture and heritage ministers from across Canada meet in Victoria by Province of British Columbia (CC BY-NC-ND 2.0)

Culture and heritage ministers from across Canada meet in Victoria by Province of British Columbia (CC BY-NC-ND 2.0)


Why New Digital Taxes Could Play a Starring Role in the Government’s CanCon Policy

Canadian Heritage Minister Mélanie Joly has energetically crossed the country emphasizing the economic benefits of the cultural industries. Yet as the government conducts a national consultation on Canadian content in the digital world, my Globe and Mail tech law column notes that new digital taxes may ultimately play a starring role.

Joly has opened the door to an overhaul of Canadian cultural policy, but the million dollar – or perhaps billion dollar – question is how to pay for it. The industry has resisted policies that might increase foreign-backed productions, arguing that lowering qualifying requirements for the number of Canadians involved will lead to lost jobs and less distinctive content. Their hopes appear to rest primarily with the possibility of a series of new digital taxes. While new taxes are never popular, the possibilities include the proverbial good, bad, and ugly.

The good involves proposals to divert revenues from spectrum licences to cultural funding (effectively a spectrum tax invisible to consumers) and to extend sales taxes such as GST or HST to foreign digital services. The bad would involve the introduction a controversial “Netflix tax” that requires online video services to contribute a percentage of their revenues toward the creation of Canadian content. Joly has previously rejected a Netflix tax, but the prospect of millions in new revenues may be too tempting to resist.

If a Netflix tax proves to be a non-starter, the government may turn to the ugly: a tax on Internet service providers. A levy on Internet service has long been the holy grail for the cultural industries, who argue that broadcast on the Internet is the functional equivalent of conventional broadcast and that both should face similar funding requirements.

To date, the law has not supported that argument with the Supreme Court of Canada ruling in 2012 that ISPs are not “broadcast undertakings” for the purposes of the Broadcasting Act.  However, Joly’s legislative overhaul could involve changing the law to allow for the imposition of new fees on Internet services.

The ISP tax would come at an enormous cost to other policy priorities. Internet access in Canada would become less affordable, expanding the digital divide by placing Internet connectivity beyond the financial reach of more low-income Canadians. The increased costs would also be felt by the business community, potentially undermining the innovation strategy currently championed by Navdeep Bains, the Minister of Innovation, Science and Economic Development.

The full column can be found here.


  1. Stupid fucking Lieberals are plumbing the depths for ever more exotic ways to deprive us of our hard earned money. What will they do when they run out of others people money to squander?

    • Spell Mc Check says:

      First of all you cant spell ‘Liberal’ which is hilarious especially when you call them stupid.Second it doesnt matter what party is on top its al corporations and you’re an ignorant cunt if you dont see that. Stay sleeping outraged moron.

      • Bob the Observer says:

        Spell Mc Check

        Who died and made you King?

      • Brusà Ducj says:

        1. Pointing out spelling (and grammar) errors as a means to discredit an argument is about as sophisticated as building homes out of shit and sticks. Which is to say, people have been doing it for ever but it never holds up. Not to mention you made several errors yourself, so you don’t have much of a high ground to start with.
        2. “Lie-berals,” didn’t you see that it’s a pun? Oh that’s right, you didn’t, because you’re too busy getting all inflamed and angry anytime someone disagrees.
        3. I agree with you, it is a problem rooted in corporate influence. Please tell me, though, how calling someone an “ignorant cunt” does anything to resolve that problem, expose that problem, or get that commenter to re-evaluate their views?

        God damn I wasn’t going to reply to this until I read this porcheria in the comments.

      • Wow, that went right over your head, didn’t it?

      • F@ck SpellMcCheck says:

        Wow Justin, feeling the pressure of a real job, aren’t you.

        Spell McCunt, YOU “stay sleeping” at the helm, same as you were sleeping when you cast your vote to ruin this country.
        More taxes is exactly what we need… go f..g read about the LIEBERALS in Ontario managing to outdo California (3x the population, half the debt) .

        I hope I didn’t make any spelling mistakes as that obviously would discredit my opinions.

  2. Why not make US/Multinational companies that sell advertising IN CANADA to CANADIAN companies … pay/collect HST?

    If you sell advertising to/for Canadian’s, pay HST … very simple.

    US companies claim that they don’t do work in Canada, yet if you’re self serve creating the ads in Canada, and they’re serving them up on Canadian IP’s/Sites they are doing work in Canada.

    One very large internet company has lots of sales reps working in Canada, but all technical/service issues are dealt with via the States. So they can keep up the facade of not doing work in Canada.

    So why should a US company have an advantage over Canadian content providers?

  3. If CraveTV, Texture, etc. has to collect HST, why not Netflix or other services?

    Why should a Canadian company be at a disadvantage to a US supplier?

    Netflix IS doing work in Canada, and should collect taxes just like any Canadian company has to.

    Level playing field is not a radical POV.

  4. I can see this ending up as another politically bright idea.
    Anybody remember the blank CD tax?
    I bought hundreds of CD’s for computer back-up purposes, paying a tax to support music duplication. Luckily times changed, other cheaper media came along and the foolishness was bypassed.

    Now I have the feeling that my money is once again going to be taken, this time at the ISP, to support what?

    If items of Canadian commercial culture can’t survive on the open pipes of the internet with a potentially massive international audience. Then I have to wonder why I should have to bolster them with my money that could be spent elsewhere more productively.

    • That’s exactly what I was thinking. The sense of entitlement of the music labels and movie studios (and some artists) is pathetic.

      Create something that people will want to pay for; don’t expect the consumer to fund your expected profits because you cannot change your model to reflect the new technology and usage patterns. The fallacy of theft for copyright infringement is old hat.

  5. Mike

    1)If American and international web companys have to pay hst that’s fine but they should be allowed to grants etc in Canada which now they can not.

    2)But that the thing there are people pushing for more then hst some one idea that came up was a special internet tax on top of hst only subject to American companys.