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Eleven weeks to go and Stephen Harper’s “no Netflix tax” is an early campaign gimmick.
It is a predictable anti-tax pitch from the PM, but it says a lot about his chaotic public policy in Canada’s multi-billion dollar broadcasting industry. Not even the wealthiest American media company operating in Canada, Netflix still rakes in $400 million a year in Canada, employs no Canadians, and contributes nothing to the Canadian television system or the Canadian economy.
Yet in Harper’s Canada, the American media goliaths Netflix (market cap of $52B), Amazon ($250B), and Google ($442B), all get a free pass from the federal regulatory tribunal (CRTC) when competing for Canadian audiences against Canadian cable and TV companies.
It is bizarre policy: the Americans don’t contribute to the Canadian film-making fund CMF, nor do they even have to price HST into their subscriptions. Canadian companies have done both for decades and a 60,000-job industry has thrived. In a Nanos poll released last year, 68% of Canadians agreed that US broadcasters like Netflix should play by the same rules as Canadian companies.
Not surprisingly, the CRTC was reconsidering the temporary regulatory exemption for Netflix and Google last September, but the Prime Minister --- who appoints all of the CRTC commissioners--- suddenly made a grab for newspaper headlines with his “no Netflix tax.”
The CRTC Chair claimed he was unmoved by this political interference, but the exemption continued.
The Netflix/Google/Amazon-exemption has industry experts scratching their heads. Here is what one of Canada’s leading media industry commentators Greg O’Brien of CARTT magazine had to say:
We learned in the [Harper’s] video tweeted early yesterday evening that one of his all-time favourite TV shows is Breaking Bad, reminding us it “is even available on some online streaming services, if you’ve never seen it.” Well, it’s only available for streaming online from Netflix (not some), unless you want to purchase individual episodes for download from Google Play or iTunes.
Oh, it’s also available on demand from our [Canadian] cable and IPTV companies too, but hey, who cares about them, right? They only employ tens of thousands of Canadians, pay millions in taxes and contribute to thousands of hours of Canadian content, which means more jobs and taxes and so on. But sure. Netflix…
It’s also unbecoming for our Prime Minister, who so often reminds us how good he and his ruling party are for the economy, to resort to being the pitchman-in-chief for a company which contributes nothing to it.
The CRTC should immediately require all internet broadcasters, including the big American players, to abide by the same as Canadian broadcasters and cable companies.
