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

‘Lift for Wills’ community fundraiser to support Penticton boy fighting cancer

This Sunday, stop by World Gym Penticton for by-donation drop-in classes, a silent auction, more.

Petition to install safety barriers on Hwy 97 garners over 500 supporters

Yesterday a fatal collision on Hwy 97 claimed the life of one individual

Oliver Health Centre celebrates expansion of ER

Minister of Health was in Oliver for the official opening of the improved emergency department

Okanagan health care community mourns loss of long-time hospital director

Ken Jarrard dedicated his life in Penticton to health care; he passed away today at age 92.

Four arrested, weapons, suspected drugs seized by RCMP in Penticton

Penticton RCMP take down local drug trafficking operation

Canada to bolster screening of central China passengers for virus at 3 airports

Additional measures will include messaging on arrivals screens in Toronto, Montreal and Vancouver

B.C. town spends $14.14 per resident for snow removal in one month

Costs of snow removal to the Town of Princeton skyrocketed in December.… Continue reading

PHOTOS: Eastern Newfoundland reeling, search underway for missing man after blizzard

More than 70 centimetres of new snow fell overnight, creating whiteout conditions

Prince Harry, Meghan to give up ‘royal highness’ titles

‘Harry, Meghan and Archie will always be much loved members of my family,’ says Queen Elizabeth II

Photo reminds Salmon Arm resident of connection to former drama teacher Justin Trudeau

Prime minister remembered as being as a funny, larger-than-life person

Province says it is monitoring AIM’s road maintenance

The provincial transportation ministry is working closely with new road contractor AIM,… Continue reading

B.C. society calls out conservation officer after dropping off bear cub covered in ice

Ice can be seen in video matted into emaciated bear cub’s fur

‘It’s still early’: Flu rates down so far this year at Interior Health

At Kelowna General Hosptial, there have been about 50 confirmed cases

Calls for dialogue as Coastal GasLink pipeline polarizes some in northern B.C.

Coastal GasLink is building the 670-kilometre pipeline from British Columbia’s northeast to Kitimat on the coast

Most Read