Canadian Con(tent) Artists Are Reaching for Your Wallet

A few short weeks after the federal budget lowered income taxes to spur economic activity, a parade of cultural groups begin appearing tomorrow before the Canadian Radio-television and Telecommunications Commission (CRTC) in an attempt to have new taxes imposed on Canadians' Internet and wireless bills.

In 1995 the CRTC imposed a hidden 5% tax on cable and satellite TV bills to help support the production of Canadian programming, ranging from cable community channels to programs on the Canadian conventional and specialty channels. The CBC is the major beneficiary of this tax (see my Feb. 12 post).

Citing this tax as a precedent, a wide range of Canadian cultural groups (ranging from the actors' union to film and TV producers to the Canadian Conference of the Arts) want the CRTC to impose taxes on the revenues of Internet Service Providers (ISPs) and wireless carriers. The tax rates proposed range up to 6% on ISP revenues and up to 0.6% of the revenues of wireless companies.

Like the 5% tax on cable and satellite revenues, the cultural groups want these new taxes to be hidden in the charges of the ISPs and wireless companies (Why let the public know. They'll only get upset and complain). Guess who would be the exclusive recipients of the proceeds of the new taxes? That's right, the cultural groups that are proposing the new taxes.

Internet access revenues in Canada were $4.6 billion in 2007. A 6% tax on this base would amount to $276 million. Wireless revenues in 2007 were $14 billion. A 0.6% tax on this base would amount to $84 million. The total in new taxes proposed: $360 million.

New taxes in the midst of a recession. Only in Canada you say. Pity (Canadians).

If you haven't already done so, don't bother contacting the CRTC with your views on the proposed taxes. The CRTC's window for comments from the public has closed. Your options are to contact your MP, or the federal Ministers responsible for the CRTC ( Tony Clement at Industry Canada and James Moore at Canadian Heritage), or all three. The Ministers can't stop the CRTC from reaching its own decision, but they can overturn a CRTC decision to impose the new taxes.