Canada Appears To Be Split On Whether To Extend Culture Tax To Internet Services

from the the-internet-is-not-television dept

As you may or may not be aware, Canada, similar to many European countries, has what is commonly referred to as a “culture tax.” The idea is that Canadian broadcasters must pay into a platform specifically used to fund Canadian content, lest Canada be overrun with the sweet, delicious programming offered by ‘Merica. I mean, we’ve got, like, eight different shows that revolve around singing/dancing competitions, and some of them even include celebrities you’ve never heard of! You can’t resist that kind of thing, right? Well, as you can imagine, the television broadcasters to our north have noticed how much content is now delivered on the internet, having previously asked for regulators to likewise tax ISPs. Now, they, as well as some in government, have their sights set on companies like Netflix as well.

At the “Let’s Talk TV” hearings now underway before Canada’s broadcast regulator, provincial governments like Ontario and Quebec have argued that Netflix should be subject to the levy. The country’s powerful cable industry and the national broadcaster, the CBC, have made the same arguments, arguing that companies like Netflix and iTunes should not get a free pass when their own services must pay for Canadian content.

It’s a good point because…wait, no, it isn’t a good point at all. The internet isn’t television, Netflix isn’t a “channel”, and iTunes isn’t radio. Are they places where culture, both foreign and domestic, are distributed? Well, sure, but then again so are a great many other things. Shall we tax Steam to help Canadians produce more Canadian video games? Amazon for more Canadian books? Hell, some of those levies may already be in place, but that doesn’t mean they make sense. Frustratingly, the Canadian broadcasters aren’t making the argument they should be making: in a hyper-connected world where content distribution is varied, global, and fast, taxing anyone to prop up local content is at best a losing battle and likely entirely worthless. How about just making good content that Canadians and (gasp!) international communities want to get?

Fortunately, some important folks aren’t on board with a Netflix tax.

Canada’s Prime Minister, however, has been denouncing the idea of a “Netflix tax” and some, including internet law professor Michael Geist, have suggested the idea is too politically toxic for the broadcast regulator to implement.

I’d say the entire theory behind the tax is wrong, but attacking internet services, the very services that lower the barrier for all content producers, makes the least sense of all.

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Comments on “Canada Appears To Be Split On Whether To Extend Culture Tax To Internet Services”

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Canadian Viewer says:

Re: Re:

Lost Girl, The Listener, Continuum, Bitten, and more.

Fantasy, especially good Sci-Fi, seem to be slowly disappearing from the US channels, especially for this upcoming season. I was really sad to hear Revolution and Almost Human had been cancelled. But yeah, I agree that a “Netflix Tax” might not be the best idea right now.

Whatever (profile) says:

There is actually a pretty good blog by Steve Faguy (called Fagstein online) that has some really good insight into all of this, as an example:

There are a couple of stories on there about these hearings and the role the CRTC (the canadian radio telecommunications commission) might play in the future.

His hosting will probably croak if everyone goes and visits, but it’s seriously worth checking out.

Anonymous Coward says:

Re: Re:

The logic behind such taxes is because a few people pirate content we will make every body pay a tax to compensate us. It then becomes easy for a business that is losing income due to real competition to ask for and obtain even more tax on the grounds that its problems must be due to piracy.

The other uses for such taxes is for the rich to get the everybody else to subsidies the entertainments that the rich enjoy, but which has few fans amongst everybody else. This may be opera, or classical music, where there is deliberate propaganda to make it something for those with snobbish tastes to attend and enjoy, while keeping out the riff-raff.

beech says:

Re: Re: Re:

Public broadcasting stations are funded by a combination of private donations from listeners and viewers, foundations and corporations (59.4% of 2010 total revenues of all stations), state and local taxes (21.8% of 2010 total revenues), local and nationalunderwriting, and federal funds, principally through the CPB (15.5% of 2010 total revenues).[5]

– Wikipedia

Not too far off my assumptions, but how much they get is irrelavant. If they got $5 from Obama, that’s $5 taken from taxes to support arts and education. .. which is what Canada is doing in a different fashion.

Anonymous Coward says:

Re: Re: Re: Re:

Yup, so even though a significant percentage of the PBS budget comes from private donations it is totally not deceptive to say “Using tax revenue to support the arts is basically what pbs is” because even if it is only five dollars out of millions then it is something to get upset about. Such things will not be tolerated in ‘murica!

beech says:

Re: Re: Re:2 Re:

who was getting upset about it? the percentage doesnt matter. what matters is that PUBLIC TAX DOLLARS in some quantity are being used to produce quality entertainment products. the US government decided that spending money on educational television is a good investment that helps everyone, and i think you’d be hard pressed to find many who disagree. what i dont get is that you seem to be attacking me based on you thinking i’m against PBS? i used PBS as an example because it’s public funds going to entertainment that i don’t think many people would be able to argue against. (As a side note, ask any parent with a child 2-6 about Daniel Tiger’s Neighborhood. Parents would let the streets of DC run red with blood before they let funding for Daniel Tiger get cut).



When I was a kid (yes, a century ago), Canada used to be invisible in music, movies and TV. We were zeroes. Now it’s a game of “where in Canada was that filmed.” The Canadian content rules implemented decades ago work. We don’t want to go back to being invisible on our own TV sets and devices. That’s why Pierre Juneau became a national hero and we still have annual Juno Awards.

How would Americans feel if nothing was ever filmed, seen or mentioned about New York? Ever. Not even an occasional “New Yahk” accent was allowed? The whole state, not just the city?

Let’s adapt this system which has worked well for us. WE WANT SOME STUFF WHICH IS OBVIOUSLY US, not just imported bullet ballets, cops and druggers, presidential assassination plots, and race problems.

That’s what we want and why we’ve been willing to pay for it. We still want it, that’s what the hearings are about. Just because some giant corporation has been gigantically successful in (innocently) doing an end run with new technology doesn’t mean we should just fold and retreat silently back into our igloos and turn the lights out.

It won’t be a cakewalk, but let’s ADAPT the present system, not throw it out.

beech says:


Just to play devils advocate:

If you want Canadian content so bad, and are willing to pay for it, why is a tax even necessary? Shouldn’t Canadian content be able just to compete in the free market?

Also your system gave us nickleback and Justin Bieber, so it’s obviously not perfect.



Sometimes the “free market” burps up cancers like Comcast.

How free is a boxing match where one boxer is 400 lbs and the other 40 lbs? Now translate that to 400 million versus 40 million. How many 40 pounders would get in that ring, or survive if they did?

No system is perfect, but with patience, tolerance and thought we can make them less imperfect.

William McDuff (profile) says:


Ah, but it also gave us Great Big Sea, the Arrogant Worms, Barenaked Ladies, Bif Naked, Rush, The Tragically Hip, Celine Dion…OK, we’re sorry about that last one too.

(And for comedians…SCTV by itself: John Candy, Eugene Levy, Rick Moranis, Catherine O’Hara, Martin Short, Dave Thomas, Harold Ramis…)

W. McDuff (profile) says:


Here, here! I don’t care about competition in the cel phone carriers and don’t want to pay for it! If new companies can’t stand up to the oligarchy of Bell, Rogers and Telus, then too bad for them!


Hollywood has a pile of money, Canada has very little. In order for, say, your Friendly Giants, Fraggle Rocks, or Corner Gas’s to get off the ground, there needs to be some seed money there. Do you think L.A. would have ever funded Corner Gas, despite it turning into an international hit?

kyle clements (profile) says:

crtc issue is complicated

I’m divided on the issue.

The issue that this article is ignoring is that America, being 10X bigger audience-wise, tends to have productions with 10X bigger budgets, which translates into astronomically more revenue generating potential. How is Canada expected to compete in this environment?

It’s sort of like how Canada has way more softwood lumber than America does, so we can sell a higher quality product to America at a much lower cost. America responds to the situation by violating the Free-Trade agreement and their own court decisions, and taxes the Canadian wood anyway, because they can’t compete with what we offer.

Made in Canada content taxes are the same thing, only these taxes don’t violate any pre-existing agreements between our countries.

The writing and acting quality may be nearly equivalent, but the level of production quality is no where near the level of polish American content can achieve. So we take a few bucks from the big players to help the little guys get their project finished. I don’t see anything wrong with that idea for big, professional, commercial productions.

However, per capita, Canadians are among the most prolific content generators and consumers on YouTube. We are punching well above our weight class in the area of user generated content, and all this is happening organically without any tax incentives, and this fact needs to be taken into consideration. The CRTC tries to sweep user generated content aside because to be “really Canadian” content needs to be scripted and available in both official languages.

Well, as a producer of user-generated content, I’m not going to dryly read from a script, and double my effort and expenses to produce everything in a second language to appeal to an insignificantly small audience; I’m going to use my mother tongue, and keep it off-the-cuff and organic.

Anonymous Coward says:

So here is the deal.

Canadian TV Broadcasters except news specifically chose repeatedly for years NOT to adapt and compete by moving offerings online and reducing their prices to a realistic level.

Now they want the Gov to step in and “protect” them from big bad Netflix, under the guise of “protecting canadian content” and of course the Jobs that no one is losing.

Netflix gets no access to CanCon funds so lets say they pay into it. Who benefits ? Big incumbent dinosaur broadcasters who never adapted and will have access to the funds as if they need more funds.

What is being proposed is a “forced” wealth transfer from Netflix directly to the people who should be getting hell from the CRTC for not adapting, full stop.

siale (profile) says:

This really isn’t anything new- just modernized for the Internet etc. When I was younger I worked 3 miles south of the Canadian border, so all of our radio listening was stations out of Quebec. We learned that the stations had a quota on how much American music they could play and had to do something like a 2:1 ratio or something (Canadian: American music). Might have been hearsay, but seemed accurate per what we were hearing on the radio. If true, could never understand why- people’s wants and tastes should shape what is offered. If they want only Canadian music, programming etc, then there shouldn’t be a need for quotas. Why so afraid to let nature take its course???

textibule (profile) says:

As a US expat living in Europe, I’d like to affirm categorically that when you’ve lived without “American culture” for a few years, and then you are re-exposed to it, whether advertantly or inadvertantly, you realize who noisy (gunshots anyone?) and divisive it is, has always been. And/Or how easy it is for parts of the brain to rot away without it ever being noticed.

Only USians who don’t get out very much would find other countries imposing a culture tax as cruel or unusual punishment.

John Fenderson (profile) says:

Re: Re:

“Only USians who don’t get out very much”

Even then, only some of them. I’m a USian who doesn’t get out very much, but I have no opinion on Canadian (or anyone else’s) taxation matters. It seems to me that any nation should have the right to internal taxation in any amount for any reason they like, subject to the laws of that nation. I.E., it’s a purely internal matter and none of my business.

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