LILLEY: Carney looks to hike your streaming bill, pick fight with Trump
· Toronto Sun
Canada’s broadcast regulator has long been one of the most incompetent bodies in Ottawa.
On Thursday, Canadian Radio-television and Telecommunications Commission (CRTC) proved why they deserve that title once again.
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In a stunningly stupid decision that is sure to escalate the trade war with Washington, the CRTC announced that streaming giants such as Netflix, Amazon and Disney need to pay 15% of their Canadian revenues towards Canadian content.
That’s not a 15% tax on the profits these companies make in Canada, and that’s not charging the GST/HST on what they sell in Canada. This is telling them to hand over 15% of all revenues to programming the government approves of.
There is no world where, if this stands, each of these streaming services doesn’t get more expensive for consumers. You can’t take 15% of any company’s revenues and not expect a price increase for the product or service they provide.
Picking another fight with Washington
What’s worse, though, is that this entire issue, the treatment of foreign, mostly American, streaming companies, has become a major trade irritant between Ottawa and Washington.
This decision will only make things worse.
Congressman Lloyd Smucker, a Republican from Pennsylvania, has already put forward a bill that could see more tariffs added to Canada for unfair treatment of American companies. Thursday’s CRTC ruling will take that bill and turn it into a bi-partisan rallying cry for Republicans and Democrats alike.
Not that the CRTC cares.
CRTC doesn’t care about trade negotiations
Scott Shortliffe, vice-president of broadcasting at the CRTC, told reporters in a media briefing Thursday that he’s not concerned with trade negotiations because the government agency doesn’t concern themselves with such matters.
If the CRTC won’t, then the Mark Carney government, which the CRTC reports to, should. That is if they actually want to lift tariffs that are killing jobs in areas like steel, aluminum, autos and lumber.
Shortliffe is a bureaucrat, one who has been in positions at Canadian Heritage and the CRTC helping government squeeze the life out of the broadcast sector year after year. This is a man who wields enormous power of a sector he has never worked in and doesn’t understand.
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“No one ever likes, particularly, being asked that they should pay more into a system.” Shortliffe said dismissing concerns of the streaming companies.
“Clearly, streamers would have preferred not to have base contributions, much less the requirements today.”
Court case challenging law continues
This mandate to provide a cut of revenues to government priorities is already being challenged in court by the Motion Picture Association – Canada, a group that represents the streamers plus traditional studios such as Paramount, Warner Bros. and Sony – all of which may need to pay in as well. The MPA argues that the Online Streaming Act, which is the legislation that led to this move, is a violation of Canada’s obligations under CUSMA and amounts to an unfair trading practice, said MPA CEO Charles Rivkin in a statement.
“American studios and streaming services are already the top foreign investors in Canada’s film and TV ecosystem – delivering content to Canadian audiences and sharing Canadian stories with the world,” Rivkin said.
“This decision triples the cost of doing business in Canada and will spark even more inflation in the market, making further investment and innovation less attractive.”
Bad move all around
Bottom line, it’s a move that increases costs for consumers. It will make studios and streamers rethink their decisions to shoot on location in Canada at a time when they are already under pressure stateside to repatriate production.
This move also undercuts trade talks at a time when we don’t need any more irritants.
“It will always be paramount to ensure that Canadians continue to see themselves reflected on screen, hear Canadian voices, and celebrate what makes this country unique,” Carney’s heritage minister Marc Miller said in a statement.
If we want to ensure that Canadian stories are told, there are ways to do that without killing off foreign investment in our industry and making trade talks with Washington even more difficult.
It’s almost as if Carney doesn’t want a deal with Trump. Once again, it looks like he’s putting his political future ahead of the country’s economic interests.