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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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Filed Under: canada, cultre tax, internet, movies, streaming
Companies: netflix


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  • identicon
    Pixelation, 19 Sep 2014 @ 8:44pm

    Canada hates culture

    Let's tax it!

    reply to this | link to this | view in chronology ]

    • identicon
      Dave, 19 Sep 2014 @ 10:45pm

      Re: Canada hates culture

      No. Canada just hates Murica

      reply to this | link to this | view in chronology ]

      • identicon
        Canadian Viewer, 20 Sep 2014 @ 12:22am

        Re: Re: Canada hates culture

        We don't hate "Murica" per se. I'd wager most of us used to look up to them not so long ago. Now they're just too scary, something to be avoided at all costs. ;-)

        reply to this | link to this | view in chronology ]

        • icon
          Christopher (profile), 21 Sep 2014 @ 3:38pm

          Re: Re: Re: Canada hates culture

          No, we are not 'too scary'. Some/most of the conservatives in government are, not America as a whole.

          reply to this | link to this | view in chronology ]

          • icon
            John Fenderson (profile), 22 Sep 2014 @ 7:46am

            Re: Re: Re: Re: Canada hates culture

            The consensus amongst my international friends are that we are very much too scary now. I even have a handful of Canadian friends that used to visit the US regularly, but no longer do so because of that.

            reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 19 Sep 2014 @ 10:44pm

    Orphan Black

    reply to this | link to this | view in chronology ]

    • identicon
      Canadian Viewer, 20 Sep 2014 @ 12:13am

      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.

      reply to this | link to this | view in chronology ]

      • identicon
        Vladilyich, 20 Sep 2014 @ 8:30am

        Good Sci Fi

        I can't agree more. The majority of decent Sci Fi is produced in either Toronto or Vancouver. The U.S. has totally dropped the ball. As a screenwriter of Sci Fi, I moved to Ontario seven years ago to be closer to the heartbeat of the industry.

        reply to this | link to this | view in chronology ]

  • identicon
    Fred Carrick, 19 Sep 2014 @ 11:34pm

    correction

    "revolve around signing/dancing competitions"

    Shouldn't that be "singing"?

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 20 Sep 2014 @ 5:12am

      Re: correction

      No, its a competition to see how many people you can get to sign your public encryption key in a day.

      reply to this | link to this | view in chronology ]

      • identicon
        ryuugami, 21 Sep 2014 @ 4:33am

        Re: Re: correction

        "No, its a competition to see how many people you can get to sign your public encryption key in a day."

        I'd watch that.

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 20 Sep 2014 @ 12:09am

    LOLS

    "iTunes isn't radio"? Actually, yes it is. iTunes has a built in radio feature that offers streaming from internet radio stations.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 20 Sep 2014 @ 9:54pm

      Re:

      actually its not Radio used Radio waves. Now ask yourself does Itunes use Radio waves ?

      Did I really just have to point that out? Are we getting dumber as a species?

      reply to this | link to this | view in chronology ]

    • icon
      John Fenderson (profile), 22 Sep 2014 @ 7:47am

      Re:

      iTunes isn't radio. It may have some radio-like features, but it's a different beast nonetheless.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 20 Sep 2014 @ 12:34am

    The tax may be silly, but as long as Netflix is creating their own TV content and distributing it to subscribers in Canada, the broadcasters kind of do have a point there.

    reply to this | link to this | view in chronology ]

    • icon
      Sonja (profile), 20 Sep 2014 @ 4:47am

      Re:

      Is Netflix making up for the fact that other content providers are loath to licence content to them?. I am not sure about series but its definitely obvious that Netflix dont have the rights to stream certain movies. Well the ones I watch anyway (I was hoping for alien).

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 20 Sep 2014 @ 12:53am

    Yesterday Portuguese government updated the law of Private Copy, extending it to every device capable of recording and storing content, up to €20. €0.006 per GB.

    reply to this | link to this | view in chronology ]

    • icon
      That One Guy (profile), 20 Sep 2014 @ 1:04am

      Re:

      Ah gotta love those 'You must be a pirate'/'Justification for piracy' taxes... /s

      reply to this | link to this | view in chronology ]

      • icon
        Arthur Moore (profile), 20 Sep 2014 @ 1:15am

        Re: Re:

        The fun thing about you must be a pirate taxes are that they encourage a mindset of "Well, I already paid the tax, why not get it for free."

        The thing with taxing internet media companies is the government seems to forget that the alternative is more piracy.

        reply to this | link to this | view in chronology ]

  • icon
    Whatever (profile), 20 Sep 2014 @ 3:22am

    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:

    http://blog.fagstein.com/2014/09/08/crtc-irrelevance/

    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.

    reply to this | link to this | view in chronology ]

  • identicon
    beech, 20 Sep 2014 @ 4:13am

    I'm not totally against this. Using tax revenue to support the arts is basically what pbs is. At any rate it's certainly doing more to advance the useful arts and sciences than copyright is in its current form.

    reply to this | link to this | view in chronology ]

    • icon
      Paul Renault (profile), 20 Sep 2014 @ 5:21am

      Re:

      Came here to say roughly the same thing.

      That and "Just 'cuz it's done one way in the 'States and a different way just about everywhere else, doesn't mean that the American way is the best, eh."

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 20 Sep 2014 @ 6:55am

      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.

      reply to this | link to this | view in chronology ]

      • identicon
        beech, 20 Sep 2014 @ 10:38am

        Re: Re:

        It's got nothing to do with piracy. The theory is that small time Canadian talent can't compete with huge foreign acts, so tax the foreign entertainment and use the money to subsidize some local artists. I think you're a bit confused with storage media taxes which are supposed to be about piracy.

        reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 20 Sep 2014 @ 8:25am

      Re:

      "Using tax revenue to support the arts is basically what pbs is."

      What percent of the PBS budget is from taxation?

      Hint: It is much less than you probably think it is. You should look it up rather than just mimic biased talking points.

      reply to this | link to this | view in chronology ]

      • identicon
        beech, 20 Sep 2014 @ 10:43am

        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.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 20 Sep 2014 @ 3:50pm

          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!

          reply to this | link to this | view in chronology ]

          • identicon
            beech, 20 Sep 2014 @ 6:10pm

            Re: Re: Re: 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).

            reply to this | link to this | view in chronology ]

            • identicon
              Anonymous Coward, 21 Sep 2014 @ 8:16am

              Re: Re: Re: Re: Re:

              "who was getting upset about it?"

              You do not remember Romney wanted to kill Big Bird?



              "what i dont get is that you seem to be attacking me based on you thinking i'm against PBS"

              Yes, actually I did. My mistake.

              reply to this | link to this | view in chronology ]

              • identicon
                beech, 22 Sep 2014 @ 1:23am

                Re: Re: Re: Re: Re: Re:

                Yeah, and Romney lost didn't he? I swear man...Don't fuck with parents with kids. Without PBS who are they going to have raise their child?!?!?!

                reply to this | link to this | view in chronology ]

                • identicon
                  bob, 22 Sep 2014 @ 8:43am

                  Re: Re: Re: Re: Re: Re: Re:

                  Big Bird would have lived without taxes going to PBS it just would mean more people would need to donate or programming would change to fit the amount of money available which could mean there might be a big barbaque with some new down feather pillows :)

                  Dibbs on one of the legs btw.

                  reply to this | link to this | view in chronology ]

            • identicon
              bob, 22 Sep 2014 @ 8:46am

              Re: Re: Re: Re: Re:

              I miss Mister Rogers. Daniel Tiger is good and fun to watch but I don't think anything will ever compare to the talent and inspiration of that man.

              Yes, I watch Daniel Tiger's Neighboorhood because I have a 2 and a 6 year old.

              reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 20 Sep 2014 @ 9:11am

      Re:

      No, that the BBC your taking about, PBS uses donations.

      reply to this | link to this | view in chronology ]

      • identicon
        beech, 20 Sep 2014 @ 6:12pm

        Re: Re:

        BBC is a lot the same. PBS uses public funds and donations. In fact, most (all?) the shows mention being "made possible by the corporation for public broadcasting" and it looks like the CPB is almost 100% public funded, iirc.

        reply to this | link to this | view in chronology ]

  • identicon
    IGGY IGLOOLIK, 20 Sep 2014 @ 5:28am

    THE PRESENT SYSTEM WORKS!

    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.

    reply to this | link to this | view in chronology ]

    • identicon
      beech, 20 Sep 2014 @ 6:33am

      Re: THE PRESENT SYSTEM WORKS!

      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.

      reply to this | link to this | view in chronology ]

      • identicon
        IGGY IGLOOLIK, 20 Sep 2014 @ 7:45am

        Re: Re: THE PRESENT SYSTEM WORKS!

        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.

        reply to this | link to this | view in chronology ]

      • identicon
        William McDuff, 22 Sep 2014 @ 9:40am

        Re: Re: THE PRESENT SYSTEM WORKS!

        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...)

        reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 21 Sep 2014 @ 10:35am

      Re: THE PRESENT SYSTEM WORKS!

      Who is "WE"?
      You plus some people?
      I don't care if there is Canadian content, and I don't want to pay for it. If you do, go ahead. But it if can't make a market for itself, then it doesn't deserve to exist.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 21 Sep 2014 @ 12:06pm

        Re: Re: THE PRESENT SYSTEM WORKS!

        here here!

        reply to this | link to this | view in chronology ]

      • icon
        W. McDuff (profile), 22 Sep 2014 @ 11:35am

        Re: Re: THE PRESENT SYSTEM WORKS!

        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!

        [/sarcasm]

        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?

        reply to this | link to this | view in chronology ]

    • identicon
      bob, 22 Sep 2014 @ 8:50am

      Re: THE PRESENT SYSTEM WORKS!

      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?

      I would be just fine with it. How soon can that change be implemented?

      reply to this | link to this | view in chronology ]

    • icon
      John Fenderson (profile), 22 Sep 2014 @ 9:10am

      Re: THE PRESENT SYSTEM WORKS!

      "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?"

      I wouldn't actually care. I doubt I'd even really notice.

      reply to this | link to this | view in chronology ]

  • icon
    NaBUru38 (profile), 20 Sep 2014 @ 10:15am

    Culture tax isn't the same as piracy tax, because the collected money is used for different things (one for national productions, the other for collective societies).

    Taxing online services like iTunes and Netflix is legitimate (unlike taxing Internet access). Now, how about using regular taxes like VAT for that fund?

    reply to this | link to this | view in chronology ]

  • icon
    kyle clements (profile), 20 Sep 2014 @ 4:31pm

    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.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 20 Sep 2014 @ 10:02pm

    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.

    reply to this | link to this | view in chronology ]

  • icon
    siale (profile), 21 Sep 2014 @ 1:16am

    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???

    reply to this | link to this | view in chronology ]

  • icon
    textibule (profile), 21 Sep 2014 @ 4:04am

    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.

    reply to this | link to this | view in chronology ]

    • icon
      John Fenderson (profile), 22 Sep 2014 @ 11:49am

      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.

      reply to this | link to this | view in chronology ]


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