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B.C. to start taxing Netflix, other streaming subscriptions
Published Tuesday, February 18, 2020 6:14PM PST Last Updated Tuesday, February 18, 2020 6:39PM PST
VANCOUVER -- The B.C. government is following in the footsteps of Saskatchewan and Quebec and introducing what critics are labelling a "Netflix tax" on streaming services.
On page 64 of the province's new budget, the government announced any companies that earn more than $10,000 in revenue selling "software and telecommunications services" to British Columbians will have to start collecting sales tax.
"As people have shifted to buying more and more goods and services online, legislation in many jurisdictions hasn't kept pace," the Ministry of Finance said in an email statement.
"Clarifying registration requirements will future-proof our tax system as the shift to digital purchasing continues."
Officials noted the companies that offer streaming services and have physical offices in Canada – including Apple and Amazon – are already collecting the tax from consumers.
But critics argued it's just another cost for everyday British Columbians to bear in a budget that will also increase the price of sweetened, carbonated drinks.
Kris Sims of the Canadian Taxpayers Federation said the tax will not only apply to video streaming services operated by foreign companies, but music streaming as well.
"Your everyday expenses, your pocketbook expenses that we all (pay), those are going up," Sims said. "They're expecting to make $16 million on that new Netflix tax."
In December, documents filed by Netflix with the U.S. Securities and Exchange Commission shed light on the streaming giant's Canadian earnings for the first time. The filings revealed Netflix brought in $780 million in revenue from Canadian subscribers during the first nine months of the 2019 fiscal year.
The company raked in $835 million from Canadians for the full 12 months of 2018.
With files from CTV News Vancouver's Bhinder Sajan and The Canadian Press