British Columbians who use streaming platforms like Netflix will soon pay a little bit more for their binge sessions.
A measure in the province’s 2020 budget will require streaming providers and other “Canadian and foreign sellers of software and telecommunications services” to begin collecting seven per cent PST, so long as they’ve got annual B.C. revenues over $10,000.
That would mean an extra $8.39 per year in tax for a Netflix subscription.
“B.C. has had a sales tax in place since 1948 — that has not changed,” said the Ministry of Finance in a statement.
“However, as people have shifted to buying more and more goods and services online, legislation in many jurisdictions hasn’t kept pace. Clarifying registration requirements will future-proof our tax system as the shift to digital purchasing continues.”
The province said companies like CraveTV, Apple and Amazon Prime, which already had a brick and mortar presence in Canada, were already collecting the PST.
The opposition BC Liberals were quick to pounce on the new measure, which they said fits into an NDP pattern of tax and spend.
“I’m sure that Netflix users are going to be very surprised to find their streaming service now has the PST.
“We need to see a robust, strategic, thoughtful growth plan in British Columbia. It’s completely non-existent in the budget we saw today.”
But Matthew Hatfield with the digital-focused non-profit group Open Media said the NDP’s approach to taxing streaming services wasn’t unusual.
Hatfield said Quebec already applies PST to such services, and said using PST, rather than a “Netflix tax” targeted at individual platforms, was a more common-sense approach.
“It was unfair, arguably for Netflix not to be paying PST. So we see this just more of keeping the balance,” he said.
“There’s been a lot of proposals arguing that Netflix is a special business that is in some way stealing revenue that would otherwise go to Canadian businesses, and therefore some special form of taxation needs to be created just for Netflix or just for similar services to Netflix. And that’s where we’re we have a problem.”
The new measure comes into effect on July 1, 2020.