PM rejects broadband tax

Prime Minister Justin Trudeau stopped the presses Thursday on the idea of imposing a five per cent tax on broadband internet services as a way of “levelling the playing field” in Canada’s rapidly evolving news industry.

Liberal members of the Commons heritage committee released a long-awaited report Thursday with 20 proposals aimed at helping the slumping media industry adapt to rapid technological change and shifting consumer habits.

The majority report calls 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.

Liberal MPs on the committee tried to sell the idea as creating more fairness, since the tax is already applied to satellite and cable TV services.

But not long after the report’s release, Trudeau spiked the proposal.

“We respect the independence of committees and Parliament and the work and the studies they do, but allow me to be clear: We’re not raising taxes on the middle class — we’re lowering them,” Trudeau said in Montreal.

“We’re not going to be raising taxes on the middle class through an internet broadband tax. That is not an idea we are taking on.”

Liberal MP Hedy Fry, the committee chair, argued that applying the levy makes sense since more media companies are moving into streaming, which allows them to escape the five per cent tax currently imposed on traditional broadcasters.

“Levelling the playing field was a thing that concerned us most,” Fry said.

The committee spent 15 months studying the ailing Canadian media industry, which has been steadily losing advertising revenue and market shares to online giants such as Facebook, Netflix and Google.