Politicians are sometimes said to struggle with “developing policy at Internet speed,” but Thursday the government gave new meaning to the words. My Globe and Mail op-ed notes that as Liberal MPs were presenting the much-anticipated Standing Committee on Canadian Heritage report on media that included a recommendation for a 5-per-cent tax on broadband access, Prime Minister Justin Trudeau and Canadian Heritage Minister Mélanie Joly were assuring Canadians that the government had no intention of accepting the committee’s proposal.
Ms. Joly left the door open to an Internet tax last year through her national consultation on Canadian content in a digital world, steadfastly refusing to take a firm position on the issue. The committee report effectively ended the debate as the immediate criticism of the ill-advised policy measure means that an Internet tax has about as much future as a dial-up modem.
The prospect of an Internet tax should have never reached the recommendation stage, however, as the committee put it in the policy window without any meaningful analysis or effort to grapple with its repercussions.
Committee chair Hedy Fry oddly claimed that the committee had not recommended an Internet tax at all. While she was right about no Netflix tax (the media coverage unfortunately conflated Netflix and broadband taxes), the committee report leaves little doubt that there is a call for a broadband tax. Recommendation 12 states:
The Committee recommends to expand the current 5% levy for Canadian content production on broadcasting distribution undertakings to broadband distribution.
There is not much ambiguity there and the Prime Minister rightly killed the proposal before it could get out of the news conference. That said, there is much in the committee report that is worthy of consideration including the application of sales taxes to digital services and the use of spectrum revenues to support Canadian content. I’ll take a look at the remaining proposals in a follow-up post next week.