The series on digital tax issues concludes with the most conventional tax issue: how to ensure that large corporations pay their fair share of income tax for profits generated in Canada (series posts on digital sales tax, Netflix tax, Internet access taxes, digital device taxes, and tax in support of newspapers). The income tax issue was raised by the NDP earlier this year, who called on the government to ensure that Internet companies pay taxes on profits made in Canada.
California Internet tax bill breakdown by Stephanie Robogeisha (CC BY-NC-SA 2.0) https://flic.kr/p/9YoqbP
Digital Tax
Making Sense of the Canadian Digital Tax Debate, Part 5: Income Tax Reform to Support the News Media
The series on digital tax policy issues has touched on various tax measures that target consumers: digital sales tax, Netflix tax, Internet access taxes, and digital device taxes. The series returns with a post examining a business-focused tax proposal, namely lobbying efforts to amend the Income Tax Act to change the rules on advertising deductions in the hope of shifting ad spending to Canadian media organizations.
Making Sense of the Canadian Digital Tax Debate, Part 4: New Taxes or Fees on Digital Devices
The prospect of new fees or taxes on Internet services is not the only digital tax proposal aimed at technology use (previous digital tax policy posts on digital sales tax, Netflix tax, ISP tax). For the past year, the music industry has engaged in a campaign to expand the existing tax on blank CDs to all digital devices, including smart phones. The groups argue that while the government is sorting out the details of its new digital device tax, it should provide a $40 million annual handout to the industry to compensate for consumer copying. It has proposed a four year commitment at a public cost of $160 million.
Making Sense of the Canadian Digital Tax Debate, Part 3: New Taxes or Fees on Internet Access
A potential Netflix tax may garner the lion share of media attention, but the more harmful tax proposal comes from those advocating for a tax on Internet service providers that would have a real impact on all Internet use (earlier posts in the series include digital sales tax and Netflix tax). As far back as 1998, the CRTC conducted hearings on “new media” in which groups argued that the dial-up Internet was little different than conventional broadcasting and should be regulated and taxed as such. In other words, groups have been arguing for new Internet taxes since before Google, Facebook, or Netflix.
Making Sense of the Canadian Digital Tax Debate, Part 2: Mandated Canadian Content Contributions aka a “Netflix Tax”
The series on the Canadian digital tax debate continues with an examination of calls for mandated contributions by Internet video services to support the creation of Canadian content, frequently referred to as a “Netflix tax” (earlier post on digital sales tax). The Netflix tax is perhaps the most politicized digital tax issue, with both the Conservatives and Liberals opposing such a tax during the last federal election. Despite the opposition, the issue continues to resurface as it is regularly raised by cultural groups and was part of the CRTC’s report on the future of broadcast regulation released in the spring.
Proponents of a mandated Netflix contribution typically rely on three arguments: (i) failure to impose fees and regulation on foreign providers represents an “existential threat” to Canadian creative industries since they argue it will lead to reduced spending on production in Canada; (ii) there is a need to “level playing field” for Canadian services competing against foreign providers; and (iii) Europe is moving toward Netflix regulation and Canada should too.
Recent Posts
The Law Bytes Podcast, Episode 132: Ryan Black on the Government’s Latest Attempt at Privacy Law Reform 
CRTC Chair Ian Scott Confirms Bill C-11 Can Be Used To Pressure Internet Platforms to Manipulate Algorithms 
My Appearance Before the Senate Transport and Communications Committee on Bill C-11: The Senate Starts Review As Bill Receives House Approval 
The Law Bytes Podcast, Episode 131: The Bill C-11 Clause-by-Clause Review – What “An Affront to Democracy” Sounds Like 
Bill C-11 Enters a Danger Zone: Government Shifts from Ignoring Witnesses on User Content Regulation to Dismissing Criticisms as “Misinformation”
