Posted June 20, 2017
Hi, my name is Kate and I’m middle-class. So, I imagine, are you. So is the corporate lawyer down the street who is hauling in at least $300,000 a year. And the artist across the way who is lucky if she’s making $40,000. That’s the wonderful thing about Canada: We are all members of the hard-working middle class.
And God forbid any of us should have to pay an extra toonie a month for the Internet service that allows us to do our banking, provides crucial medical information and helps our kids with their school projects. Oh, and lets us binge-watch House of Cards, of course.
Prime Minister Justin Trudeau took a page from Stephen Harper’s populist playbook Thursday and instantly shot down a proposal to place a small cultural levy on Internet service providers (ISPs). When he was in government, Harper torpedoed similar levies by branding them an “iPod tax” and a “Netflix tax.” Now Trudeau has done the same by mislabelling a proposal by the Canadian heritage committee of the House of Commons for a 5-per-cent levy on the revenues of ISPs as “raising taxes on the middle class through an Internet broadband tax.” The word “tax” is misleading, as is the inflammatory suggestion that the levy, which in a worst-case scenario might amount to $2.50 on your monthly bill, would be burdensome to middle-class Canadians.
Currently, there is a 5-per-cent levy on the revenues of cable and satellite companies. That levy goes into the Canada Media Fund, along with some direct government funding, and is used to subsidize Canadian television programs and interactive media. The fund’s annual budget is steadily dropping, however, as Canadians make the shift to Internet TV. The heritage committee’s idea is simply to update the levy to the new technology – although it may take legislation to do so because the Supreme Court ruled in 2012 that ISPs are not in the business of broadcasting.
Trudeau and critics of the proposal assume the ISPs would all simply pass the levy on to the consumer, which isn’t necessarily true. There might be both political and consumer pushback if they did, as there is some price sensitivity on Internet bills.
The critics, such as University of Ottawa Internet law professor Michael Geist, writing in these pages Friday, all raise the spectre of affordability, pointing out that Canada already has high Internet prices. Then Trudeau goes as far as to insinuate that the affordability issue extends to the middle class. Really? You can’t afford $2.50 a month, but you can still be considered middle-class?
Acorn Canada, a charity that works for low- and moderate-income Canadians, is lobbying for relief on high Internet bills. These folks aren’t going to be satisfied with $47.50-a-month Internet; they aren’t even asking for $27.50. They are petitioning for $10-a-month Internet. The digital divide that cuts off those on low incomes and people living in remote communities is a major public issue – which is why the Canadian Radio-Television and Telecommunications Commission (CRTC) is all over it – but suggesting the cultural levy would exacerbate it is a gross exaggeration.
The other criticism you often hear about the levies on ISPs is that the Internet is used for so many things other than streaming video – banking, shopping and the like. True, but recent numbers on Canadian broadband use show that in the evenings 70 per cent is streaming audio and video. Let’s get real here: Those unlimited data packages are being used to watch entertainment as the Internet becomes our new television.
So why shouldn’t a small levy – say 3 or 4 per cent to recognize the other uses – help update our support for Canadian culture? Politicians clearly see anything that can be characterized as an Internet tax as the third rail, but public reactions seemed based more on the ideological instinct that the Internet is beyond the reach of regulation than on any full examination of what the benefits might be.
I am tired of hearing everyone lecture the cultural industries about the digital future. Outgoing (and outspoken) CRTC chair Jean-Pierre Blais bid a rather bitter farewell to Canadian broadcasters this week in a speech telling them they were fussing about the barnacles on their obsolete canal boats as the new steam engines pass them by. But nobody comes up with concrete ideas to help them adapt.
In that speech, Blais also expressed frustration at how long it is taking Minister of Canadian Heritage Mélanie Joly to produce her review of cultural policy. Yup, it would have been nice if she had gone public with proposals for the cultural industries before her boss tossed one of the better ideas out the window.
Article by Kate Taylor for The Globe and Mail