The Canadian Heritage consultation on Canadian content in a digital world recently concluded and the department has now posted the responses. There are few surprises with many creator groups supporting Netflix and Internet taxes, while Internet providers and consumer groups oppose them (my submission can be found here). The Ontario government was the only provincial government to file a response. The Ontario Ministry of Tourism, Culture and Sport’s submission acknowledges that there is “no evidence of an overall Cancon policy failure that would justify revolutionary policy reform”, but leaves little doubt that the government is open to new Internet taxes to fund Canadian content.
The Ontario government previously worked toward a Netflix tax as part of the CRTC’s Let’s Talk TV consultation. Given the controversy that generated, it is a bit more cautious this time but its support is not difficult to discern. Its starting point is that all industry players in the Canadian media market be required to contribute to Cancon. The submission states:
The ministry also recommends that the federal government ensure that all industry players participating in, and benefitting from, the Canadian media market contribute, financially or otherwise, to Cancon. These contributions by industry players could be (sample only):
- Voluntary and/or mandated (by the federal government or CRTC)
- For Cancon development, creation, production, distribution, marketing and promotion, discovery and/or export; and
- Financial or non-financial
The Ontario government notes that it is “not advocating for any specific industry player contribution mechanism or contribution level.” In other words, it is not calling for a Netflix-specific tax. That said, it forecasts declining contributions from broadcasters and broadcast distributors and it urges the federal government to “conduct a risk-benefit analysis of all available options, to determine the best way to fill the Cancon funding gap while living within the FPT government fiscal plans.”
The Ontario government then acknowledges two realities. First, that the federal government has said there will be no Netflix tax. Second, that any new Cancon funding must come from a new Cancon revenue source. What might that be? The submission states:
Accordingly, MCTS acknowledges that Minister Joly has publicly confirmed that the FCPR [federal Cancon policy review] scope includes options for new federal government-mandated Cancon contributions from industry players, specifically an ISP levy and/or sales tax payable by foreign OTTs.
The submission does not identify other funding options as part of this analysis. In other words, the Wynne government goes out of its way to emphasize that it believes that there is a need for more funding for Cancon and that it sees two new tax options: a sales tax on digital services and/or an Internet tax.