Netflix

Streaming Taxes In Quebec

It appears that streaming services like Netflix might be subject to provincial sales taxes in Quebec soon.

Quebec Finance Minister Carlos Leitao said this could be a possibility soon, depending on the details of the $500 million Canadian Content deal the federal government has worked out with Netflix.

Some download and streaming services are already subject to provincial or harmonized sales taxes, like iTunes, Apple Music and other services that are based in Quebec or in Canada.

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Netflix Update

A few minutes ago I got an email from Netflix Canada saying I will be paying more this month, in line with the previously announced hike in fees.

The new rates are of course as follows :

$8.99 for Basic subscription (inc. SD broadcasts on one device only)
$10.99 for Standard subscription (inc. HD broadcasts on up to two devices)
$13.99 for Premium subscriptions (inc. both HD and 4K broadcasts on up to four devices)

Lately, they’ve been adding more films, music documentaries, and concerts so I’m probably going to continue subscribing for the time being. The second season of Stranger Things is coming up in late October.

Although I am somewhat concerned that Disney will be pulling Lucasfilm, Marvel and Pixar films from Netflix soon, I already own my favorites from these film companies on Blu-ray and DVD (thanks to the Disney Movie Club) so I don’t think I will miss them.

Netflix/Disney News

Netflix has hiked their monthly subscription fees in Canada for new members, to $8.99 for Basic (standard definition playback on one screen/device), $10.99 for Standard (high definition playback on up to two screens/devices) and $13.99 for Premium (ultra high definition playback on up to four screens/devices).

Current members will not be subject to this hike for some time but will notice fewer Disney and possibly Marvel titles in the new year as Disney establishes their own streaming service in 2019.


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Looking For New, Innovative Products ?

Amazon has decided to showcase new, innovative and interesting products on its site.

Amazon Launchpad features tech accessories and gadgets. It also features tools, products for the home & kitchen and products for pets.

The Canadian version of the site has significantly less product compared to its American counterpart but I suspect this lack of product is just temporary.

Canadian Amazon Prime subscribers should also note that Amazon Prime Video may be made available to Canadians shortly.

This service offers free television episodes and films to Amazon Prime subscribers, who can also rent and purchase films they can download or stream. Click here to see what the American service offers.

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.

Rogers & Netflix

Rogers has decided to extend their Netflix offers to their existing Ignite subscribers, in lieu of the Shomi subscription that was included in some of their packages.

The offer, which will include a six month subscription to the Netflix Standard Plan, will be made available November 30th, 2016. And current members of Netflix will also be able to obtain a credit for this membership.

Unfortunately data caps will be an issue to some Ignite subscribers, who will need to limit their viewing to a select number of concerts, music documentaries and films in standard definition to avoid a data overage fee of $1.50/GB.

Existing Ignite users with unlimited usage plans will be able to view films in high definition but at about 4 GB each these films can burn through a 100 GB or 200 GM monthly usage limit quite quickly. And although newer Ignite subscribers have 125 GB and 250 GB monthly usage limits, they will also need to keep an eye on the amount of films, etc they view to avoid the data overage fees.

This of course depends on a person’s surfing habits. For example, i’m not a gamer, I watch television broadcasts on cable/PVR and I already own my favourite films on DVD and Blu-ray so i’m not expecting to stream a significant amount of content off Netflix. But even I am considering an upgrade to an unlimited usage plan because i’m a regular Youtube and Facebook user.

The success of this partnership will also depend on Netflix Canada’s content, that they have been promising to extend.

I haven’t been a Netflix Canada member for months so I don’t know if they’ve had some improvements. But i’m going to give them a chance for those six months.