Canadian Law

No to Internet Tax !

Apparently Canadian Heritage Minister Mélanie Joly is considering an Internet Tax to fund Canadian content, according to University of Ottawa professor Micheal Geist. And unfortunately for Canadians this tax may make internet access more expensive.

There are currently two taxes being considered ; One on content providers like Netflix and iTunes and another general sales tax on internet access. And although the previous tax may sound better than the latter, one has to wonder if all music, television programs and films purchased or rented online would be subjected to this tax, including those that are made available through the internet television providers.

SiriusXM subscribers are already subject to taxes and a “Music Royalty and Regulatory Fee of 14.2%”. But would the service also be subjected to this additional tax ? Will Apple Music subscribers need to pay for this additional tax ?

We currently pay nothing to listen to radio and to watch television offline. We also already pay taxes on compact disc, DVD and blu-ray purchases, which would not be subject to this new tax. It therefore makes no sense to charge people more taxes for the same content, especially when it involves the streaming of purchases matched or uploaded to a Cloud service.

Why does the government not fund Canadian Content by taxing Canadian broadcasters that run adverts online, when they stream foreign content ?

I’m sure Rogers and Bell would likely oppose this because they’d likely rather see the foreign services taxed instead. But the foreign services have no legal obligation to collect these taxes and the Trans-Pacific Partnership Agreement would disallow this requirement, if passed.

We also currently pay taxes on our internet provider subscription fees so any additional tax would simply make it unaffordable for many Canadians.

Canadians spent on average $203 per month on communication services in 2014, according to a CRTC Report released in 2015, an increase of approximately 6% from 2013 ($11.92). And according to CBC News, there was a 10% increase on wireless and internet services specifically from 2013.

To dissuade use of foreign services like Netflix and iTunes, Canadians are also already subject to data caps and the proposed tax would simply make the unlimited internet plans less affordable.

Many Canadians also still pay a “Digital Services Fee” on their cable, satellite and television subscriptions, a fee that cannot be justified now that an analog service has been fazed out.

Could the government not demand this fee be replaced with a Canadian Content Improvement Fund fee instead ? Or will this obsolete fee be buried like that of Bell’s $2.80 Touch-Tone fee, which netted Bell $80 Million in 2013 according to CBC News ?

At the moment Bell is claiming the Digital Service Fee is collected to improve their services. But isn’t that what their investors are paying for ? Why their customers are being asked to pay more per month for television ?

Prior to September 2014, cable and satellite television subscribers in Canada paid a monthly 1.5% fee to the Local Programming Improvement Fund, which netted $106 million in 2011 for television stations in markets smaller than a million. And although this fee was discontinued, these subscribers barely noticed because they were asked to pay more for their television subscriptions shortly after.

The average monthly rate for television services paid by Canadians climbed from $65.25 in 2014 to $66.08 in 2015, according to CBC News ; A difference of 83 cents per month when the average monthly rate for Canadians for the Local Programming Improvement Fund was 50 cents. And with the mandated “skinny package” changes some have seen their monthly rates rise significantly since the spring of 2016.

I believe it makes more sense to apply a Canadian Content fee of a dollar or two to the sale of television antennas, digital converter boxes, digital television receivers/set top boxes, satellite/internet radio receivers and streaming media players in Canada, although some members of the public would likely not enjoy the prospect of paying it in addition to a Provincial environmental handling fee and having both fees taxed.

Perhaps a monthly fee of 1.5% on unlimited internet packages or bundled packages over $150/month would be the path of least resistance because it would likely be negligible to the subscribers of these specific bundles or packages.

Warning – Gift Card Scam

The Canada Revenue Agency does not accept or solicit iTunes gift cards as payment.

Apparently the scammers now ask for payments using iTunes gift cards, that they resell online using legitimate services.

If you receive a call instructing you to pay back taxes in gift cards, bitcoin, prepaid credit cards or prepaid debit cards, hang up and call 1-888-495-8501 from 8:30 a.m. to 5:00 p.m. Eastern time, Monday to Friday.

VPN/Netflix Petition

Open Media has created a petition asking Netflix to stop blocking customers using Virtual Private Network services to access their larger American repertoire. Click here for details.

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Tim Cook Issues Press Release

Apple has issued a press release in regards to the United States Government’s request to unlock iPhones and access their user’s data. It can be read by clicking here.

Paypal Says No To VPN

In response to potential copyright issues Paypal has decided to stop offering their services to VPN services. And unfortunately that means that those of us who want to secure our tablets, laptops and phones whilst traveling or using public wi-fi will need to pay using other methods.

The first VPN company to receive notice was Canadian company UnoTelly, whose account have been limited by Paypal on the third of this month. And although other VPN providers appear to still be offering Paypal as a payment option, they are expected to be limited soon.

VPN services are not illegal but their use to view copyrighted content that has been limited to a specific country is technically illegal, even when payment has been provided to legitimate services like Netflix.

Netflix is working on providing more material to Canadians but people will always be tempted to use VPN to access the American version of Netflix as long it provides more content.

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Netflix USA and VPN

Netflix has issued a statement that they are working on offering content universally and will therefore start blocking Canadians from their American service.

“Some members use proxies or “unblockers” to access titles available outside their territory. To address this, we employ the same or similar measures other firms do. This technology continues to evolve and we are evolving with it. That means in coming weeks, those using proxies and unblockers will only be able to access the service in the country where they currently are. We are confident this change won’t impact members not using proxies.” – January 14th,2016 Blog Entry

There is doubt in regards to the possibility of blocking proxy services like VPN on the net but if they do license more content the need for such a service would be reduced, which is great news for Canadians.

I’ve tried Netflix a few times and found myself leaving shortly after joining because of a lack of content. And now they’ve got more competition because of services like Shomi and Crave TV so it is in their best interest to start offering more content to Canadians.

BTW, if you are subscribed to a VPN service don’t get rid of it unless you do not use public wi-fi often. You can use it to secure the smart phones, tablets and laptops you use when you’re away from home.

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