Company News

Canada panel urges taxes and domestic content rules for Netflix, other U.S. firms

TORONTO, Jan 29 (Reuters) - Ottawa should require U.S. tech companies such as Netflix, Amazon and Facebook to collect the same taxes as Canadian companies and also be subject to the same requirements for supporting domestically produced content, a Canadian government-mandated panel recommended on Wednesday.

“Our recommendations for reform are practical and actionable providing the legislative powers and regulatory tools necessary to seize the opportunities and address the risks of the digital age,” the panel’s chairwoman Janet Yale, a veteran Canadian telecoms executive, said in a press release accompanying the report.

Prime Minister Justin Trudeau’s government created the six-member panel in 2018 to examine Canada’s decades-old broadcasting and telecoms laws, and advise the government on how to bring the legislation up to date with the current digital landscape.

The report stated that it was not recommending a so-called “Netflix Tax” by charging consumers an extra levy. Instead, the report recommended requiring online streaming services such as Netflix to “invest in Canadian programming that they believe will attract and appeal to Canadians.

“This approach would ensure a meaningful contribution to Canadian cultural policy objectives and the production sector. It need not result in higher prices for consumers.”

The report also called for the mandate of the Canadian Radio-television and Telecommunications Commission (CRTC) - which regulates media and telecoms companies in Canada - to include ensuring equal access for all Canadians to affordable internet access, affirming individual rights to an open internet and providing stronger protections for users’ data.

It recommended that the CRTC be given a much broader mandate, to include three classes of companies: curation, such as Netflix and Amazon Prime; news aggregators including cable companies and sites like Yahoo! News; and sharing platforms such as Facebook and YouTube.

The panel’s recommendations are not binding.

Canadian companies are legally required to spend a proportion of programming budgets and allocate a set portion of air time to Canadian content. Curation companies would have to do the same, under the recommended changes, while aggregators and sharers would contribute to Canadian content in a similar way as domestic companies, through levies based on a calculation of Canadian-derived revenues. (Reporting by Moira Warburton in Toronto; Editing by David Gregorio)