The prospect of new digital taxes and regulation to fund the creation of Canadian content continues to attract attention with cultural groups leading the charge. For example, the Canadian Independent Music Association recently called for the regulation of digital services and ISPs including mandated contributions to support the development of Canadian content, while ADISQ has previously lobbied for a similar policy approach.
With mounting coverage of the issue, Canadian Heritage Minister Melanie Joly appeared last weekend on CTV’s Question Period, spending most of the nine minutes dodging questions from host Evan Solomon. Joly started by clearly stating that “there will be no new Netflix tax”, but spent the rest of the interview making the case for one. The discussion featured speaking points that seemed to contradict the no Netflix tax approach, emphasizing that everything is on the policy table and that the government is looking at all scenarios. Solomon noted the inconsistency of the comments and Joly struggled to respond.
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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.
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The Government of Quebec released its budget yesterday featuring two Internet-related measures that are sure to attract attention and possible litigation. First, it is moving forward with plans to study a new tax on residential Internet services in order to provide support for the cultural sector. The study was recommended by the Quebec Taxation Review Committee, which is looking for new sources of revenue to support the movie, music, and book publishing industries. There are no further details on how much an ISP tax would be, though the plan would increase Internet access costs at the very time that governments are concerned with improving affordability.
Second, the government says it will be introducing a new law requiring ISPs to block access to online gambling sites. The list of blocked sites will be developed by Loto-Quebec, a government agency. The budget states:
A legislative amendment will be proposed to introduce an illegal website filtering measure. In accordance with this measure, Internet service providers will not be allowed to provide access to an online gaming and gambling website whose name is on a list of websites that are to be blocked, drawn up by Loto-Québec. This measure will be applied by the Régie des alcools, des courses et des jeux, which should have the necessary resources to fulfil its new responsibilities.
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