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Poll found that 55 per cent of respondents opposed the idea of paying a sales tax when purchasing entertainment from foreign services such as Netflix and iTunes.


The Trudeau government will introduce legislation this spring that aims to bring cultural policy into the 21st century. But since the legislation is based on assumptions in place since the 1950s, Canadians must ask themselves whether those assumptions still hold.

The bill will be based on a report – Canada’s Communications Future: Time to Act – that contains 97 recommendations, one of which, for most consumers, matters above all others: “The media communications sector should invest in the development, creation and distribution of high-quality Canadian content.”

To that end, the report recommends legislation “to establish a regime that requires such online streaming services that benefit from operating in Canada to invest in Canadian programming.”

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The authors insist that they are not recommending a Netflix tax. But they are. Under the legislation, American-owned companies such as Netflix – and Disney, Amazon Prime and Apple and Swedish-owned Spotify and others, along with Canadian-owned Crave – would be required to produce a certain amount of Canadian programming. Given the history of Canadian television production and the size of the market, much of that programming would likely lose money, with the costs passed on to Canadian consumers.

Other recommendations include requiring foreign-owned providers to pay GST/HST on their Canadian sales, expanding broadband access in rural and remote areas and giving more powers to (and renaming) the Canadian Radio-television and Telecommunications Commission. The Liberal government has already rejected recommendations in the report to register and regulate the digital operations of newspapers and journals.

But it’s the Cancon rule that will be most controversial. Should Canadians still be paying – as they surely will – to subsidize Canadian content on their TVs and smartphones?

Those who answer yes are channeling the foundational assumption of a 1951 report from a commission chaired by Vincent Massey – who would become the first Canadian-born governor-general – that urged the federal government to become directly involved in promoting and protecting Canadian culture. Canada was a small country living next door to a cultural colossus, “which leads to peculiarly close and intimate relations,” the report observed. Canadian culture needed government help.

The commission’s recommendations led to the creation of the Canada Council for the Arts and other supports. Two decades later came Canadian-content regulations for radio and television.

We can debate whether Cancon made Justin Bieber and Schitt’s Creek possible, or whether they would have thrived equally in a free market. What matters is that technology has blown the Cancon regime to smithereens.

Twenty-four million Canadians access YouTube each month. There are 6.5 million Canadian Netflix subscribers. The Raptors were the number one Google search in Canada last year. Time to Act, and the legislation that will flow from it, seeks to import the old rules, and the assumptions behind them, into this new world.

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But is Canadian culture – really English-Canadian culture; French-language culture is a different ball of wax – still in need of protection? Do streaming services and social media and whatever is yet to come inhabit a shared cultural space that should be regulated and taxed? Or should the free market that created these new media continue to rule?

And then there is the warning from University of Ottawa professor Michael Geist that the Americans could impose countermeasures under the renegotiated North American free-trade agreement if Canada imposes restrictions on American-owned streaming services.

Stephen Harper’s Conservative government stoutly opposed a “Netflix tax." Erin O’Toole, one of the two leading candidates for Conservative leader, has promised to “Defund the CBC,” whose predecessor was established by a Conservative government in 1932. It’s safe to assume the Conservatives will oppose the new legislation root and branch.

Conservatives have always been suspicious of tax dollars propping up cultural industries. Their free-trade instincts oppose tariffs, including cultural tariffs or their equivalents. And there are progressives as well as conservatives who believe that the technological disruption of broadband has rendered federal regulation of culture archaic and impossible.

The Liberals are promising broad public consultation after introducing the legislation. The Conservatives are bound to make this an issue in the next election. The future of Cancon is going to become a Thing.

Should governments continue to regulate culture? Should cultural industries still be required to tell Canadian stories as part of doing business in this country? Or has Canada grown to the point where artists can tell those stories without need of subsidy and regulation?

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