Digital tax policy has emerged as major issue around the world. Canada is no exception. Late last year, the Canadian government announced plans to act on all three fronts: Bill C-10 seeks to address mandated Cancon payment and Finance Minster Chrystia Freeland has promised digital sales taxes by July and what sounds like a digital services tax in 2022.
What is a DST and how might Canada’s digital tax plans play out on the international front? I spoke with Georgetown University professor Itai Grinberg, a leading expert on cross-border taxation and digital tax issues on December 15, 2020, shortly after the government’s announcement. He joined the Law Bytes podcast to talk about the longstanding approach to multi-national tax policy and the emerging challenges that come from the digital economy.
Read more ›
In the months leading up to the release of the Broadcast and Telecommunications Legislative Review Panel report, there was considerable focus on whether it would recommend a “Netflix tax”, a catch-all term that has come to mean digital sales taxes, corporate taxes, and mandated contributions to support the production of Canadian content. The report contains a curious paragraph in its overview in which it claims that the panel is not recommending a Netflix tax. It states:
We want to be clear that we are not recommending that Canadian content be supported by the so-called ‘Netflix Tax’ – charging consumers an extra levy on subscriptions to such services as Netflix. It is more appropriate to establish a regime that requires such online streaming services that benefit from operating in Canada to invest in Canadian programming that they believe will attract and appeal to Canadians. This approach would ensure a meaningful contribution to Canadian cultural policy objectives and the production sector. It need not result in higher prices for consumers.
The reference to a Netflix tax in the overview is the only such reference in the 235 page report. It was likely included in the overview in the hope that media coverage would jump on the claim and seek to re-assure Canadians that there was no Netflix tax or higher prices likely for consumers as a result of the report’s recommendations.
Yet the reality for anyone that reads beyond the overview is that the panel’s report not only recommends what would widely be considered a Netflix tax but proposes perhaps the biggest Internet cash grab in the OECD with mandated payments and levies on thousands of Internet services with Canadian users.
Read more ›
Canadian digital tax policy has proven to be one of the most confusing areas of digital policy in recent years. For example, former Canadian Heritage Minister Melanie Joly struggled to convey a consistent position, often alternating between the 2015 electoral commitment of no Netflix taxes and the mounting pressure to implement some form of taxation on Netflix and other tech companies. It would appear that the complexity of the issue remains a challenge, as new Canadian Heritage Minister Steven Guilbeault issued as series of tweets yesterday that sought to clarify the government’s position. Yet rather than clarify, it highlighted how the government’s position remains somewhat confused.
Read more ›
Digital issues were expected to garner attention in the 2019 Canadian federal election campaign. Over the course of the past few weeks, all the main political parties have had something to say about the high cost of cellphone prices in Canada and the prospect of implementing new taxes on tech companies. Laura Tribe, the Executive Director of OpenMedia, joined the podcast to talk about election 2019 and digital policies in a conversation that focused on wireless services and Internet taxes as well as privacy, intermediary liability, trade, and copyright.
Read more ›
Over the past few weeks, both the National Post and Reuters have reported that the Liberals plan to include lower Internet and wireless costs as part of the fall election campaign. The reports indicate that reforms could include price caps or a firm commitment to facilitating the entry of new competitors in the form of mobile virtual network operators (MVNOs). I’ve posted regularly on Canada’s high wireless prices and efforts to address the issue (here, here, here, here, and here), which remain uncompetitive relative to many other countries (some of the reasons why are discussed in this LawBytes podcast episode with Antonios Drossos of Rewheel Research).
Read more ›