Prime Minister Justin Trudeau was firm in the Canadian government’s stance against requiring Netflix to charge sales tax in the House of Commons this week.
In a debate on taxation, NDP MP Peter Julian accused the government of making deals with Netflix and offering massive tax breaks.
“The NDP is proposing to raise taxes on the middle class, which is something we promised we would not do and have not done,” the Prime Minister responded.
“We explicitly promised in the 2015 election campaign that we would not be raising taxes on Netflix. People may remember Stephen Harper’s attack ads on that. They were false. We actually moved forward in demonstrating that we were not going to raise taxes on consumers, who pay enough for their Internet at home.”
NDP MP Guy Caron later suggested that it wasn’t fair that Netflix has to pay neither sales nor income tax.
In response, Prime Minister Trudeau stated:
“We are not going to raise taxes on Canadians. That is what the NDP is asking us to do. We recognize that the media environment and television viewing and production are changing rapidly. That is why we reached out and got Netflix to make historic investments in our content creators here in Quebec and Canada, to help them succeed in this changing universe. We have a great deal of confidence in our creators; the approach we have chose is a testament to that.”
Ever since the federal government’s announcement of its Creative Canada plan in September 2017, the lack of taxation for U.S.-based Netflix has been a contentious point.
In January 2018, a coalition of 45 Canadian media organizations requested a meeting with federal Minister of Finance Bill Morneau to urge a reconsideration of the government’s Netflix Tax stance.
Quebec Finance Minister Carlos Leitao has also spoken publicly about the province’s intention of charging provincial sales tax on Netflix.
As part of the Creative Canada plan, Heritage Minister Mélanie Joly revealed the creation of a first-of-its-kind Netflix Canada production company, as well as a $500 million CAD commitment to invest in original Canadian productions over the next five years.