Canadian Heritage Minister Mélanie Joly rules out Internet tax and announces $500-million deal with Netflix

    1 of 2 2 of 2

      The minister of Canadian Heritage has made an announcement that will bring sighs of relief inside the corporate offices of Google, Facebook, and Netflix.

      In a speech to the Economic Club of Canada in Ottawa, Mélanie Joly ruled out an Internet tax. This ensures that massively profitable and unregulated U.S. platforms won't have to fork over additional funds to the Canadian treasury.

      "Broadband coverage is uneven across the country," Joly noted, according to a transcript of her remarks. "We pay some of the highest rates in the world. Our government won’t increase the cost of these services to Canadians by imposing a new tax."

      The announcement came as Canada, Mexico, and the United States are negotiating major changes to the North American Free Trade Agreement.

      Joly also said that her government supports net neutrality. This prevents wireless companies from favouring their own content and jacking up the price for those streaming shows from Netflix or YouTube.

      At the same time, the minister acknowledged that Netflix, Facebook, Spotify, and YouTube (which is owned by Google) continue operating outside of Canada's broadcast-regulatory regime.

      "If we’re complacent, this new wave of information can drown out our own content—our French-language TV and films, our Indigenous music, our multicultural programming," she said. "This worries me. It worries our creators. And it worries Canadians."

      To that end, she announced that Netflix has agreed to invest a minimum of $500 million in original productions in Canada over five years in both of the country's official languages.

      "These partnerships will allow our creators and producers to make top-shelf, high-quality content that competes with the best in the world," Joly declared. "This is what is possible, this is what we expect, and this is the type of commitment we will work to achieve with other platforms, as well."

      In addition, Joly said the federal government will provide more financial support to the Canadian Media Fund.

      "Writers, producers and directors have serious concerns about whether there will be a domestic market for their work, especially in the face of declining private-sector cable and satellite subscription revenues that contribute to the CMF," she stated. "We are turning that around. Today, I’m announcing that, starting in 2018, the government will increase the federal contribution to maintain the level of funding in the Canada Media Fund to counter these declines."

      The CMF supports programs like Kim's Convenience and Orphan Black.

      Kim's Convenience is one of the TV shows that benefits from the Canadian Media Fund.

      Joly added that the government will work with the CMF to "explore what might be done to enhance early-stage development such as scriptwriting".

      "In music, we’ll help artists and entrepreneurs develop the skills they need to promote their music at home and connect with fans in new markets," she added. "Through the Canada Book Fund, we’ll continue to support print and digital production and will experiment with innovative approaches to marketing and promoting Canadian books."

      In her speech, Joly referred to $300 million in new funding this year to the Canada Cultural Spaces Fund. It supports a variety of locations to incubate startups, including the former Vancouver police station at 312 Main Street.

      Joly noted that there will soon be a parliamentary review of the Canadian Copyright Act.

      "I will work hard to ensure that review is focused on creators," she emphasized. "Similarly, we will reform the Copyright Board to ensure that we support cultural content, pay our artists faster, and reduce costs for all parties."