Heritage Committee recommends tax on broadband Internet

The Canadian Press</span>
Published Thursday, June 15, 2017 11:35AM EDT
Last Updated Thursday, June 15, 2017 12:33PM EDT

OTTAWA -- A parliamentary committee is releasing a long-awaited report with 20 recommendations aimed at helping Canada's slumping media industry adapt to the rapidly evolving landscape.

But the Conservative members of the committee have introduced a report of their own, arguing that their Liberal counterparts are living in the past.

The majority report recommends requiring the publicly funded CBC to eliminate advertising on its digital platforms; letting media companies deduct taxes on digital advertising on Canadian-owned platforms; and a tax credit for print outlets for a portion of their digital investments.

It also recommends a five per cent tax on broadband Internet services to lift an industry struggling to adapt to technological changes and evolving consumer habits.

Liberal MP Hedy Fry, chair of the heritage committee that produced the study, says the aim of the recommendations is to level the playing field for Canada's media companies.

"We had very important debates. We really were passionate about this," Fry told the House of Commons as she tabled the report.

"There was a difference of opinion, however, Mr. Speaker."

Indeed, Conservative MP Peter Van Loan tabled a dissenting report, which he described as being "very much in contrast" with Fry's report.

"Overwhelmingly, the recommendations of the majority on the committee have embraced an effort to turn back the clock in the media world, and keep things the way they were," Van Loan said.

"To try and replicate the ways of the analog world in a new digital world. This is a fool's errand; the world is changing (and) change means disruption.

Higher taxes and government control of the news is not the answer to the problem."

The heritage committee has spent more than a year studying the industry, which has been steadily losing advertising revenue and market shares to online giants such as Facebook, Netflix and Google.

An Internet tax would add hundreds of millions of dollars in revenues to the Canadian Media Fund, which already receives a levy on cable bills to finance the production of Canadian content.

The tax, levied on broadband Internet providers, would apply to high-speed Internet services that allow for the streaming of music, movies and TV shows, but not to slower and less costly services.

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