A person displays Netflix on a tablet in North Andover, Mass. File photo by THE CANADIAN PRESS

Streaming companies like Netflix will have to fund Canadian content: CRTC chair

Traditional broadcasters are required to pay into the Canadian Media Fund

Canada’s broadcast and telecom regulator says it’s inevitable that foreign media companies streaming content into Canada, including Netflix and Amazon, will have to make an “equitable” contribution to the production of Canadian content.

But the chairman of the Canadian Radio-television and Telecommunications Commission says it’s not as simple as making those companies pay what has often been referred to as a “Netflix tax.”

Ian Scott says some companies such as Netflix are already paying more to generate content in Canada than many consumers might think.

Scott made the comments in an interview with The Canadian Press as an independent expert panel is set to release a comprehensive report this month detailing the changes that are need to bring the Broadcast Act and Telecommunications Act into the new century.

Until about a year ago, Prime Minister Justin Trudeau and his then-minister of heritage were dismissing the notion of taxing international streaming companies.

But during the fall election campaign, Trudeau was joined by all the major opposition leaders in agreeing that international tech giants need to contribute to Canada’s economy.

“Companies who are extracting a profit, they are participating in the Canadian market and deriving revenues, should be contributing,” Scott said while being interviewed in his CRTC office in Gatineau, Que.

“That includes Netflix and all of the others in that situation,” he said.

“The manner that they contribute is what’s at issue.”

Companies such as Bell Media and other so-called traditional broadcasters are required to pay into the Canadian Media Fund to help finance production of Canadian content.

Netflix has argued it should not have to pay into such a fund because it can’t draw on it. Instead, it has committed — without being required to do so under current regulations — to spending on the production of movies and other content in Canada.

The U.S.-based company has pledged to spend at least half a billion dollars over five years to fund original Canadian productions.

As a result, Netflix is “probably the single largest contributor to the (Canadian) production sector today,” said Scott.

“They are filling up production facilities across the country,” he said. “So is Amazon, so is Disney.”

READ MORE: Netflix and streaming means Canadian feature films struggle to find audiences

European countries have enacted legislation to force streaming services to pay for original domestic content. In France, Netflix pays a set tax on its revenue from French subscriptions.

In the case of YouTube, which provides content produced by its users, a tax is applied to its ad revenue.

The Liberals revealed during the election campaign a plan to impose a three per cent tax on multinational tech giants operating in Canada, worth an estimated $2.5 billion over four years. The tax, they said, would be applied to the sales of online advertising or any profits generated through Canadian user data.

The CRTC is also hoping the review will recommend it be granted new enforcement powers and more flexibility in dealing with broadcasters that fail to comply with regulations.

Currently, the regulator has the power to take away a broadcaster’s license. But unlike in the telecom sector, it is unable to impose monetary penalties for what are considered lesser administrative infractions.

“Think of it like speeding tickets,” Scott explained.

“You speed, we can stop you, pull you over and say, ‘You were speeding, here’s your ticket, you have to pay.’ We don’t have to take away your car, we don’t have to put you in jail,” Scott said of current telecom regulations.

“On the broadcasting side, all we can do is take away licenses,” he noted.

“That’s draconian. That’s putting you in jail and taking away your car.”

Terry Pedwell, The Canadian Press


Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Public to weigh in on Colwood Royal Bay development Monday

Application to rezone lands north of Latoria Boulevard submitted to council

Loss of UVic dog park deals a blow to socially anxious pets

Owners of non-socialized dogs seek safe space following closure of Cedar Hill Corner

Residents around Sidney’s Reay Creek Pond welcome federal remediation efforts

It is not clear yet whether Sidney will renovate nearby dam at the same time

Camp fun still offered in Greater Victoria

Easter Seals offers day camp options to replace cancelled overnight camps

Swim advisory issued at Cadboro Bay beach due to high bacteria levels

Island Health advises against water activities, swimming

VIDEO: Langford cat missing 18 months reunited with family

Blue the cat found at Victoria museum 17 kilometres from home

B.C. Ferries increasing passenger capacity after COVID-19 restrictions

Transport Canada 50-per-cent limit being phased out, no current plans to provide masks

Shellfish industry get funds to clean up at Island sites and beyond

Businesses can apply to cover half of costs to clean up so-called ‘ghost gear’

BREAKING: Amber Alert for two Quebec girls cancelled after bodies found

Romy Carpentier, 6, Norah Carpentier, 11, and their father, Martin Carpentier, missing since Wednesday

B.C. man prepares to be first to receive double-hand transplant in Canada

After the surgery, transplant patients face a long recovery

Grocers appear before MPs to explain decision to cut pandemic pay

Executives from three of Canada’s largest grocery chains have defended their decision to end temporary wage increases

Bringing support to Indigenous students and communities, while fulfilling a dream

Mitacs is a nonprofit organization that operates research and training programs

RCMP ‘disappointed’ by talk that race a factor in quiet Rideau Hall arrest

Corey Hurren, who is from Manitoba, is facing 22 charges

NHL’s Canadian hubs offer little economic benefit, but morale boost is valuable: experts

Games are slated to start Aug. 1 with six Canadian teams qualifying for the 24-team resumption of play

Most Read