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3% digital tax | The NDP wants to announce details of the 2017 Netflix deal

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Tony Vaughn
Tony Vaughn
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(Ottawa) The NDP is urging the Trudeau government to release details of its “secret” deal with giant Netflix in 2017 in which the internet broadcaster pledged to invest $500 million to create Canadian content.

Joel Dennis Belavance

Joel Dennis Belavance

The deputy leader of the National Democratic Party, Alexandre Poliris, believes that the disclosure of this agreement will undoubtedly make it possible to understand why the Trudeau government does not intend to subject Netflix to a 3% tax on digital services that will come into force as in 2022.

Radio-Canada reported this week that Netflix will be exempt from the digital services tax announced in the federal budget submitted on April 19. The state-owned company’s Ministry of Finance has confirmed that this new measure will exclude revenue from user subscription fees for viewing content.

The tax will be applied to revenue earned through online marketplaces, social media, advertising, and user data. The companies involved must also have a total income of at least 1.1 billion.

In a letter they sent this week to Finance Minister Chrystia Freeland and Heritage Secretary Steven Gilbolt, Mr Boliris and his colleague Peter Julian deemed it completely unacceptable that Netflix would receive such a “privilege”.

Netflix will continue to operate with impunity without paying its fair share despite the huge revenue the company earns every year. In 2020 alone, Netflix generated global revenues of $25 billion,” the NDP MPs say in their letter.

“So we allow ourselves to ask the question: Does your government’s secret agreement in 2017 with Netflix state that you pledge to never ask this web giant to pay its fair share? That question is legitimate, because it seems you are doing your best to continue to provide a permanent tax gift to Netflix. Add elected officials.

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“It is time, then, for your government to show more transparency in the Netflix file and finally publish the details of this agreement. People have a right to know what was negotiated behind closed doors. It is still a matter of preserving our cultural ecosystem,” they argued.

They are also calling on ministers to “stand up” for Canadians against this “Netflix monster” by imposing a 3% tax on it.

In its most recent budget, the Trudeau government pledged that the digital giants would pay their fair share of pocket money to do business in Canada.

wardrobe m خزانةI Freeland told Radio Canada that a company that streams digital content and generates revenue from direct user fees will be subject to another tax, GST/HST, which will be levied on consumers. This respective tax will come into effect from July.

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