Netflix

The Taxman Cometh

The Canadian government is again considering a digital services tax on foreign services like Google Play, Netflix, Prime Video and Spotify, whose operations are not based in Canada.

Unlike Cineplex and Apple/iTunes, these companies are not compelled by law to collect taxes on their services because they have no physical presence in the country, no Canadian subsidiary, and simply broadcast services to Canada.

The CRTC had ruled against a Netflix Tax in March 2015 and in June 2018 the federal government had passed on implementing the tax. But the provincial governments of Quebec and Saskatchewan have collected provincial sales tax on these services since January 2019 and British Columbia followed suit in July 2020, setting a precedent that could ease the introduction of a federal tax.

Monthly subscriptions could get costly for some but I suspect these services will continue offering incentives and promotions to keep their clientele.

Discounts and bonus rewards are usually offered on gift card purchases throughout the year, some of which are considerable.

For example, Shoppers Optimum points users will get 7500 points when they purchase $50 iTunes cards from select Shoppers Drug Mart stores until December 11th, 2020. And the same offer will be made available to some users who purchase $50 iTunes gift cards at select Real Canadian Superstore locations from December 10th to December 16th, 2020.

I occasionally encounter similar offers for discounts and bonus points for Google Play, Netflix and Spotify gift cards. And in regards to Prime Video and Prime Music, these services are made available free to Amazon Prime members.

Apple TV is also offered free for a year on new Apple product purchases so some relief can be had on some digital purchases and subscriptions. But I don’t think the tax will be implemented for some time.

The provinces that have yet to implement a provincial sales tax on these services will likely wish to discuss the possibility of a Harmonized Sales Tax so I suspect our foreign digital services won’t be taxed until July 1st, 2021 or January 1st, 2022.

Netflix & Crave Update

You may observe a reduction in video quality on Netflix and Crave due to the unprecedented demand for those streaming services.

Both services have decided to reduce their resolutions in response to this demand and the other Canadian services may do so as well shortly.

Netflix Alternatives Soon

Although this site is primarily dedicated to music, I also like film, which is why i’d like to discuss what will happen soon to Netflix in 2019.

Unfortunately Disney will be opening its own streaming service soon and fans of the Marvel, Pixar and Star Wars films have been warned that those films will disappear from Netflix, along with the Disney films. And there are rumours that Hulu might also head up north because it had been purchased by Disney last November.

It also appears WarnerMedia might consider pulling their Criterion Collection catalog and other films from Netflix for their Criterion Channel service, so Netflix’s catalog may be getting quite thin in 2019.

Furthermore agreements have been made to bring add-on subscriptions to Amazon Prime members, primarily to HBO, Showtime or Starz. And the DC Universe streaming service expansion into Canada may also strip Netflix of a few more films and television programs.

I’m personally going to stick with Netflix for a while because i’ve already got most of my Marvel, Pixar and Star Wars films on blu-ray thanks to Amazon and the Disney Movie Club. But might consider the Disney Plus streaming service if it offers access to the cartoons featured in the Walt Disney Treasures collection.

I had managed to purchase all of the Donald Duck cartoons via this collection when they were originally released but had also wanted to purchase the Goofy and Pluto collections for the few cartoons that were not included in the Chronological Donald Duck collections.

I had hoped these would be recompiled on blu-ray or would be made available for purchase online soon. But access to the whole Disney cartoon library via a streaming service would be tempting.

There are already quite a few on Youtube and I had expected Disney to eventually release their whole catalogue on an official Youtube channel or two, with adverts. And i’m hoping this will also be an option in the future.

I guess time will tell, although i’m in no rush and can wait until the dust settles. After all, I only have a few Marvel and Pixar films to buy and they will likely be discounted meanwhile.

I’d suggest waiting is the best course of action. We can always use free trial offers as they come along and they could offer deals as the market gets heated.

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Netflix Canada Price Hike? Really?

Netflix has decided to raise their monthly subscription plan prices by three dollars, days before the departure of Disney, Pixar and Marvel films from their service.

Yes, I am as baffled as you are in regards to this timing. But apparently they think they have enough material to keep their current customers, which in my case is quite the risk.

I already have my favourite Disney, Pixar and Marvel films on blu-ray thanks to the Amazon and the Disney Movie Club. And Prime Video has just recently expanded their catalogue, although it needs to expand further to be compatible with Netflix, especially when it comes to concerts and music documentaries.

My previous relationship with Netflix was on and off due to their lack of material and they’re basically keeping me on with the odd film, stand up comedy program, concert and the American remake of The Office. And unfortunately for them I own quite a few films from their catalog on DVD and blu-ray already.

It would be nice to be able to just store these away and use the service to view them but they’re still not up to par with the American service and they don’t appear to be interested in foreign language films from Europe.

For example, where are the great French performances by Louis De Funes, Gerard Depardieu and Pierre Richard? Where’s the Gaumont film catalogue?

Netflix Canada need more films like “The Train To Busan”, on top of the mainstream classic Hollywood productions. And I suspect that if no major improvements are made that I will be leaving the service again, especially if they subject me to yet another $3 hike within two years.

It should also be noted that DC Universe is also starting its own streaming service in Canada shortly, which will likely cause additional material to disappear from Netflix Canada’s catalog. But I guess all we can do is wait and see what will happen in 2019.

Update – Response on Netflix/Internet Tax

From my local Member of Parliament, Karen McCrimmon (Dated June 13th, 2018) :

“Hello Rob,

Thank you for taking the time to share your ideas with me.

Our government understands the importance of supporting our artists and creators. We also know that the way Canadians access content is changing. That’s why we have made historic investments of $3.2 billion, to support our artists and creators. It’s also why we will be modernizing our laws and programs to better support our artists in the digital era.

Netflix’s investment is a part of the transition. It secures 5 years of investments for our creators, as we modernize our laws and programs.

We, as a government have decided not to introduce a Netflix tax because we don’t want to raises taxes on the middle class, we want to lower them. We will always look at ways to strike the balance between a fair tax system and the investments we need in our culture, but in doing so, we’re not going to be raising taxes on the middle class through an internet broadband tax.

I will share your ideas with my fellow colleagues, including the Minister of Finance, Bill Morneau.

Thank your again for your engagement as a constituent.

Kind regards,

Karen”

I had suggested that if taxes on streaming services are absolutely necessary that they consider forwarding a portion of the federal taxes collected from these services to Canadian Content initiatives, instead of introducing an independent levy for that purpose.

As i’ve mentioned in a previous entry, these services will be taxed on New Years Day in Quebec and the Canadian Radio & Telecommunication Commission had made a proposal of their on in regards to levy to fund Canadian Content.

The publics views have been made clear by a February 2017 poll conducted by Innovative Research Group earlier in 2017. But I had thought to send my opinion and suggestions to my local MP and Heritage Minister Melanie Joly in response to the CRTC’s recent proposal.

If you wish to contact your local Member of Parliament on this issue, you can do so via the MP database by clicking here.

I will of course update this blog if the situation changes.

Thank you.

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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