Although Prime Minister Justin Trudeau reiterated his firm opposition to a ‘Netflix Tax’ just last month, federal finance minister Bill Morneau now says Canada will study the prospect.
Morneau told Bloomberg News at the 2018 G20 summit in Buenos Aires on Tuesday: “We are looking at it carefully because we need to understand what if anything happens to our tax based on a changing of the economy towards a different business model.”
The comment comes as the E.U. considers imposing a tax on online companies like Netflix, Amazon, Google and Apple that would take into consideration where the companies’ users are based, rather than where the companies establishes their European HQ.
“We are not studying the issue as an exercise but one that recognizes this presents real differences to how people might be organizing their business over time and where they might be getting profits versus where they might be generating value,” Morneau told Bloomberg News.
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 point of contention in Canadian politics.
As part of the Creative Canada plan, heritage minister Melanie Joly revealed the creation of a first-of-its-kind Netflix Canada production company, as well as a commitment from Netflix to invest $500 million CAD in Canadian productions over the next five years.
In January 2018, a coalition of 45 Canadian media organizations requested a meeting with Morneau to urge a reconsideration of the government’s Netflix tax stance.
Trudeau later stated in the House of Commons in February: “we explicitly promised in the 2015 election campaign that we would not be raising taxes on Netflix,” saying it would “raise taxes on the middle class.”‘
Correction: MobileSyrup originally stated Netflix’s investment was in “original” Canadian productions. Netflix reached out to clarify that this term doesn’t accurately represent the investment, with a representative stating: “This commitment will include different types of content (films, television shows) and will also include Netflix Originals produced in Canada (eg. A Series of Unfortunate Events), co-productions with local partners (eg. Anne and Alias Grace), and acquiring Canadian stories like Les Affames and bringing them to the world stage.”
Source: Bloomberg News