Committee’s ISP tax proposal a non-starter: PM

OTTAWA — A House of Commons committee recommendation to expand the five-per-cent contribution broadcast distribution undertakings (BDUs) are required to make to the Canadian Media Fund to Internet Service Providers (ISPs) was dead on arrival Thursday, with both Prime Minister Justin Trudeau and Heritage Minister Mélanie Joly roundly denouncing the suggestion shortly after the committee report was tabled. Speaking to reporters in Montreal, Trudeau said he respects the “independence of committees of Parliament and the work and the studies they do,” but that the federal government is “not going to be raising taxes on the middle class through an Internet broadband tax.” The suggestion came from the majority report by the standing committee on Canadian heritage summing up its more-than-a-year-long study on the media and local communities that heard from 131 witnesses. Out of the 20 recommendations found in the 97-page majority report, the call to expand “the current 5% levy for Canadian content production on broadcasting distribution undertakings to broadband distribution” received the most attention from media and Opposition members of the committee and the House. Speaking to reporters in Ottawa, Joly said, according to a transcript, that “we believe that there should be no Internet tax. We are not in favour of an Internet tax, and therefore, I'll be also studying the different recommendations of the report of the committee.“ Heritage committee chairwoman and Liberal MP Hedy Fry defended the recommendation during a morning press conference in Ottawa after tabling the report in the House, saying that the intent was to “level the playing field” and that it wasn’t a new tax. The financial contributions from BDUs are declining, Fry said, because they’re moving into other ways of providing the news, namely by streaming it online, and that they shouldn’t be able to “escape if you move from one platform” to another. “So we’re just saying this going to be a redistribution really, nothing more, and it will give us a little bit of extra money now as the transition is going on,” Fry said. “But as companies move completely from cable into streaming completely, it will fall back into place.” The committee’s report acknowledges that it wouldn’t be an easy switch to implement its recommendation, highlighting that if Parliament “chooses to act, it will need to recognize online broadcasters (or online purveyors of audiovisual content) as broadcasters and adapt the legislative and regulatory framework to include them.” Thursday’s reaction indicates that the concept of an ISP tax is not going to be a part of the policy stemming from the heritage minister’s broad cultural review, the results of which she has said will be unveiled in September. When raised last year, Joly said she didn’t want to “preclude any ideas at this point.” Consumer groups and telecom companies all opposed the idea of an ISP tax, and a public opinion poll from earlier this year suggested it didn’t have much support among the general Canadian populace either. In a statement, digital advocacy group OpenMedia said it welcomed Trudeau and Joly’s reaction to the committee’s recommendation. “It’s clear that the government has listened carefully to the over 30,000 Canadians who warned that this proposal would further raise our monthly bills and worsen our digital divide,” Meghan Sali, communication manager, said in the statement. “There was enormous pressure from backroom lobbyists behind this idea, and the government should be commended for resisting this pressure and standing up for Canadian Internet users.” In a press release, the Canadian Taxpayers Federation also heaved a sigh of relief, calling the proposed levy a “terrible idea” that would make the Internet less affordable. “Even worse would be using the revenue to create a new corporate welfare slush fund for the government to subsidize their favourite media outlets,” Aaron Wudrick, federation federal director, said in the release. Alysia Lau, regulatory and public policy counsel for the Public Interest Advocacy Centre, said in a phone interview that the response by Trudeau was a “good sign for consumers,” and that the proposed levy wouldn’t have been good public policy. It would also be counterproductive to the government’s plan to expand broadband infrastructure, according to a release from the Canadian Cable Systems Alliance (CCSA). “We are encouraged by early comments by the Heritage Minister and the Prime Minister that this recommendation is not a priority of the government,” CCSA president Jay Thomson said in the release. “We hope that this remains the case, and that the important work of extending broadband services to all Canadians continues under federal leadership.” In keeping with its contribution to the cultural review, and contrary to others reacting to the committee report, the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA) supported the levy recommendation and said the prime minister shouldn’t dismiss it out of hand. “Canadian broadcasters have been contributing to the production of Canadian film and television for generations. This change would simply ensure that corporations that profit from media distribution contribute to the making of it,” ACTRA president David Sparrow said in a press release. Stephen Waddell, ACTRA national executive director, added in the release: “This morning the Prime Minister said he was proud to ask wealthy Canadians to pay their fair share, yet he’s defending a loophole that allows profitable corporations to avoid contributing to Canadian culture.” — With reporting by Charelle Evelyn at cevelyn@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Committee’s ISP tax proposal a non-starter: PM

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Committee’s ISP tax proposal a non-starter: PM

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