Canada’s broadcasting regulator’s new streaming tax has led to immediate backlash and opposition from streaming giants and a taxpayers’ advocate group.
The Canadian Radio-television and Telecommunications Commission mandated on Tuesday that online streaming services like Netflix contribute 5% of their Canadian revenues to support the failing legacy media.
“The CRTC will continue to move quickly, listen carefully, and take action as we implement the new legislation,” said Vicky Eatrides, chairperson and CEO of the CRTC.
Almost immediately after the CRTC’s announcement, various groups expressed opposition.
The leading advocate of the film, television, and streaming industry in the world, the Motion Picture Association, said that it was disappointed with the CRTC’s decision.
The association said that global studios and streaming services have spent over $6.7 billion annually producing content in Canada made by Canadian production companies, investing more than the CBC, Canada Media Fund, and Telefilm combined.
“Today’s discriminatory decision will make it harder for global streamers to collaborate directly with Canadian creatives and invest in world-class storytelling made in Canada for audiences here and around the world,” said President of the Motion Picture Association, Wendy Noss.
Noss said that the global streaming giant hopes that the next stages of the process from the CRTC consider the benefits that global streaming services bring to Canada.
The Canadian Taxpayers Federation also criticized the Liberals almost immediately on Tuesday, warning that taxpayers would feel the pain amid a cost of living crisis.
“The federal government should be doing everything it can to make life more affordable and that means cutting taxes, not imposing new ones,” said federal director of the Canadian Taxpayers Federation, Franco Terrazzano. “Canadians have every reason to worry this new tax will mean higher prices to stream their favourite music, movies, and TV shows.
The price increase comes at a time when some Canadians can’t afford to deal with any added expense, as indicated by some Canadians who couldn’t afford Sportsnet having to miss out on watching the latest Stanley Cup playoff game because CBC didn’t broadcast it.
The CRTC estimates that the new tax will generate an additional $200 million in revenue.
In 2018, Prime Minister Justin Trudeau promised that the Liberals would not raise taxes for taxpayers through their digital subscriptions and Internet.
“The NDP is claiming that Netflix and other web giants are the ones who will pay these new taxes. The reality is that taxpayers will be the ones who pay those taxes,” said Trudeau.
The new tax comes as part of the Online Streaming Act, formerly Bill C-11, which received Royal Assent on Apr. 27.