A 'Netflix Tax' Is Becoming A Trend Across Canada
More provinces may be affected in the near future.
As you probably already heard, 2019 is shaping up to be an expensive year. The prices of many basic monthly necessities have gone up, one of those being your Netflix subscription. The streaming service officially announced back in 2018 that they would be increasing the price of their monthly subscription to all Canadian customers.
Netflix's standard plan now costs $3 more, a total of $13.99 a month, to watch content on two devices at the same time. And the Premium plan costs $3 more, that's $16.99 a month, to watch TV shows and movies in HD and ultra HD on four devices at the same time.
TL;DR Both Quebec and Saskatchewan have passed laws that allow the provincial government to collect taxes from businesses not based in the province, provided the goods or services are used or consumed here. As a result, Netflix is required to charge users PST in those provinces. The federal government may also be mulling a "Netflix tax."
In addition to an increase in the base cost of the subscription, Netflix users in Quebec have also begun to pay provincial sales tax (QST) on their monthly bills.
This is because the Quebec government states that companies outside of Canada that sell digital services to Quebecers must pay QST once they surpass $30,000 per year in revenue from the province.
Recently, the province of Saskatchewan passed a similar law. This year, the provincial government began collecting taxes from businesses not based in the province, provided the goods or services are used or consumed there.
Saskatchewan Netflix customers are now paying a 6% sales tax along with their monthly subsciptions.
The federal government, too, has repeatedly considered a tax on foreign streaming services but abandoned the idea (at least for now) last year. But a new opinion piece by Finanial Poist contributor Jack Mintz considers the possibility of the introduction of a tax before the next election. Mintz argues that the potential revenue might be too hard for the government to resist despite the unpopularity of the tax.
Similar concepts and conversations are also budding around the world. Canada may not be able to put off the issue for long.
Canada should definitely be charging a Netflix tax.— Brad Fraser (@fraser_brad) November 30, 2018
It sure is. It's also insulting to us as citizen's of Canada as we are collectively subsidizing Netflix through tax breaks and grants to produce more Canadian content.— Ben Rough (@bennyrough) January 17, 2019
There is a definite trend happening here, which begs the question, which province is next? And when will the federal government impose its own tax?