Ottawa’s puck ragging saves Netflix almost $1 million per day

An Unfair System That Puts Canada Second

Canada exempts internet broadcasters like Netflix from regulation. For example, licensed Canadian Broadcasters must spend 30% of their revenue on Canadian programming, but internet broadcasters like Netflix don't have to invest a single red cent in service of Canada's culture. If the regulatory system were fair, Netflix would have had to contribute almost $250 million to Canadian culture by 2020. Their actual obligation is $0.

In September of 2017, former Minister of Canadian Heritage, Mélanie Joly, announced a secret deal that would see Netflix spend $100 million in Canada for five years, but the definition of "Canadian" was purely industrial: a show by American creators, starring American actors, and set in the United States would count as long as it was filmed in Canada. There is no requirement to produce content in French and no requirement to make shows about Canada's Indigenous peoples.

In 1998, the CRTC created a rule now known as the Digital Media Exemption Order that lets anybody broadcasting online sidestep regulation
This exemption was renewed as recently as 2015
As of 2018, Netflix serves more than 50% of Canadian households with an internet connection
As unlicensed broadcasters take over more of the Canadian market, investments in Canadian programming will continue to decline
Both the Liberals and the Conservatives have promised not to impose a so-called "Netflix Tax". No such thing is proposed, but this seems to indicate that they aren't willing to take action

Toronto – Today’s interim report from the Broadcasting and Telecommunications Legislative Review is a non-event that reinforces how Canada’s regulatory system gives foreign companies like Netflix immense advantages over their Canadian competitors, according to the watchdog group FRIENDS of Canadian Broadcasting. And with each further day of inaction, unregulated foreign broadcasters like Netflix tighten their stranglehold on Canada’s attention.

The Liberal government’s decision to delay effective regulation of foreign internet media comes with a steep price.

“Every day that passes is another day for Netflix to steal market share from their Canadian competitors, thanks to inexplicable inaction from Canadian politicians and regulators,” says Daniel Bernhard, spokesperson for FRIENDS of Canadian Broadcasting. “Canada’s unwillingness to apply the rules to Netflix saves them almost $1 million per day. That’s $1 million per day which is not invested in Canadian storytelling. Such is the sorry state of Canada’s cultural policy.”

The CRTC requires licenced Canadian broadcasters to contribute up to 30% ofrevenue toward the production of Canadian programs. 365 days have elapsed since the Broadcasting and Telecommunications Legislative Review panel was appointed. Had Netflix, Canada’s largest broadcaster with 60% of households subscribing, been regulated like Canadian broadcasters are, theywould have been obligated to contribute $348 million to finance Canadian production, or $953,425 per day.

This is yet another example of the federal government allowing foreign tech giants to operate above our laws and rules. The federal government affords foreign tech giants like Netflix, Facebook, and Google myriad exemptions, tax breaks, and subsidies that are unavailable to their Canadian competitors.

The federal government has refused to close a loophole in our tax law that delivers a price subsidy to foreign publishers like Facebook and Google worth $1.6 billion per year. “Canada’s anything-goes approach to Silicon Valley is frankly embarrassing”,added Bernhard. “Other countries are cracking down. Canada is lying down.”

“This do-nothing approach is doing extreme damage to our cultural sovereignty and our democracy. It’s time for the government to do something radical: its job. Canada must govern these crucial information andcultural industries to ensure they reflect our values and serve the national interest. $1 million a day for Netflix is the opposite of real leadership.”

-30-

For information:

Jim Thompson - [email protected] - 613-447-9592

In this article →

Demand that Netflix and Disney pay their fair share!

Current Campaign

[email protected]