No tax on internet service providers, Joly insists
• Canadian Heritage Minister Mélanie Joly reiterated there will be no tax on internet service providers, but it’s not clear how she plans to get new digital players to support Canadian content as broadcasting shifts to the internet from television.
“I’ve said it in June, the prime minister also said it in June, there will be no ISP tax,” Joly told reporters after discussing her Creative Canada strategy at the Empire Club of Canada in Toronto on Thursday.
Joly outlined the need to modernize the broadcast and telecom acts for the internet era on the same day Canada’s broadcast regulator, at her request, embarked on a mission to figure out how Canadians will consume audio video content in the future and how new platforms can support content creation.
The Canadian Radio-television and Telecommunications Commission launched a consultation on how these new access models will “ensure a vibrant domestic market that is capable of supporting the continued creation, production and distribution of Canadian content.”
“We will be working with the CRTC to understand what are the new players in the sec- tor and also how can there be new ways of supporting Canadian content,” Joly said.
“In the context of streaming services, our legislation right now doesn’t deal with the reality of the internet.”
Canada’s existing system was set up for a broadcast world where content was consumed on radios and television screens. In this world, broadcasters are required to contribute a percentage of revenue to fund Canadian programming. But the funds available for local creators have declined as television revenues stagnate.
Many have eyed the new platforms where consumers access content — namely, streaming services such as Netflix Inc. and internet service providers — as possible sources to make up for the lost broadcast revenue. Many others have decried any levy on these services as a terrible idea that tries to squeeze new technology into an antiquated system.
While Joly is clear that she does not intend to tax ISPs in the modernized system, she did not reveal any ideas on new ways these new players will support CanCon in the rejigged environment.
She did, however, say the $ 500- million i nvestment from Netflix announced in late September had nothing do with its streaming ser- vices, merely with its plans to open a local production house.
“There was no discussion of whether we should or not legislate digital platform activities. This was not part of the conversation,” she said. Rather, she framed the investment as a vote of confidence in local crews, infrastructure and storytelling, which she said compelled Netflix to do more business north of the border.
When it comes to streaming, Joly noted that digital platforms don’t fall under existing legislation — they were purposefully exempt by the CRTC in 1999. Instead of ignoring the new players, however, she started conversations in Silicon Valley.
“They’re present… they won’t go away,” she said, adding that 22 million Canadians use Facebook and one in two households (more than 6 million) have a Netflix account.
“Of course we want to continue to have these conversations, but at the same time my job is to grow the sector and protect Canadian culture,” she said.
The CRTC has until June 2018 to report back to the government on future distribution models and how they will contribute to the continued creation, production and distribution of Canadian content. Public consultations are open until Nov. 24.