Additional broadband tax is not a solution for dwindling revenue

They are losing revenue

It is probably about time Canadians move away more quickly from strict Canadian content regulations and particularly legislated support for Canadian content in movies, television, radio and in general in the entertainment and communications industries.

Television viewers are already demonstrating that current TV programming as provided by cable and satellite providers as an example, simply doesn’t meet their needs – and en masse “cable cutting” is underway.

Users are actively streaming more of their entertainment needs – and that has the Bells and Rogers of the world pretty concerned.

They are losing revenue.

Last week, Prime Minister Justin Trudeau again flatly rejected a controversial recommendation from a parliamentary committee calling for a five per cent tax on broadband internet services to be used in part to promote more Canadian content.

In the House of Commons, during Question Period on Thursday last week, Heritage Minister Melanie Joly echoed that government does not plan to introduce a five per cent tax (which some have called the ‘Netflix tax’), on the digital services Canadians buy from foreign-based firms over the internet.

A little over a year ago the same Liberal minister said the government was prepared to overhaul the country’s laws governing broadcasting, media and cultural industries, announcing public consultations to “strengthen the creation, discovery and export of Canadian content in a digital world”.

Its subsequent majority report called on Ottawa to apply the tax, levied on broadband Internet providers, to high-speed Internet services that allow for the streaming of music, movies and TV shows, but not to slower and cheaper services.

Such a tax would add hundreds of millions of dollars in revenue to the Canadian Media Fund, which already receives a levy on cable bills to finance the production of Canadian content.

Today, though, few Canadians watch TV the way they did a decade or even five years ago – they just don’t like the poor quality of the content … although providers are still required to meet some reduced Canadian content rules.

Younger Canadians, in particular, want fewer regulations and better, faster and cheaper access to social media and their digital world – and that was the vote Trudeau pursued in the last election. So you can see the arguments to maintain content controls are unpopular so Mr. Trudeau will have to look for additional revenues elsewhere.

There are some arguments for it, I suppose, but to me, our Canadian sports figures, actors and entertainers, bands, writers, producers and directors don’t seem to need the government behind them to be able to take their place in the digital world of today.

That doesn’t mean that our history or culture needs to be seriously impacted by the changing world.

But it certainly will be a challenge for those who liked things the way they were. Speaking in Montreal last week, Justin Trudeau said he respects the independence of the committee, but rejected the idea of a raising taxes on the middle class through an Internet broadband tax.

The committee report also suggested CBC could eliminate advertising on its digital platforms; letting media companies deduct taxes on digital advertising on Canadian-owned platforms; and a tax credit for print outlets for a portion of their digital investments.

Conservative members of the committee produced a report of their own, arguing the Liberals are “living in the past”.

The heritage committee spent more than a year studying the industry, which has been steadily losing advertising revenue and market shares to online giants such as Facebook, Netflix and Google.

I know I am certainly not interested in paying another five per cent for my internet.

It’s already too expensive.

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