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MPs to push for 5 per cent tax on Netflix and other streaming services

In this Friday, Jan. 17, 2014 photo, a person displays Netflix on a tablet in North Andover, Mass.
In this Friday, Jan. 17, 2014 photo, a person displays Netflix on a tablet in North Andover, Mass. THE CANADIAN PRESS/AP, Elise Amendola

A parliamentary committee studying Canada’s slumping media industry will reportedly call for a five per cent tax on broadband Internet services to boost a sector struggling to adapt to technological changes and evolving consumer habits.

The Globe and Mail, citing Liberal and opposition sources, says the new levy is at the core of a majority report of the Canadian Heritage Committee to be released on Thursday.

The sources spoke on condition of anonymity as the report is not yet public.

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They said the proposal 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.

Under the new proposal, say the sources, an additional tax would be levied on broadband Internet providers and would ideally 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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One source told the newspaper that revenue generated by the current cable levy is no longer sufficient in an age of cord cutting and “over-the-top” services that stream content over the Internet.

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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.

The Sources said while MPs of all stripes acknowledge the shaky state of the media in Canada, they disagreed on solutions, with the Conservatives refusing to sign on to the majority report.

Liberal MP Hedy Fry, who is chairwoman of the Heritage committee, refused to comment on the content of the report on Wednesday, stating only that it will be “interesting.”