Technology & Science·Analysis

Could a levy on ISPs help promote Canadian content in the new digital world?

While the "internet tax" proposed by the Commons heritage committee was criticized for piling more fees onto consumers, many in the media industry feel it had the right intention, writes Ramona Pringle.

Trudeau rejected recent 'internet tax' proposal

An increasing number of TV viewers are dropping their cable bundles in favor of Netflix subscriptions. (Elise Amendola/Associated Press)

It goes without saying that nobody wants to pay more for their monthly internet bill.

As Canadians, we're already paying among the highest rates anywhere for service.

But while the "internet tax" recently proposed by the Commons heritage committee was criticized for piling more fees onto consumers, many in the media industry feel it had the right intention, even if its proposed execution was flawed.

The committee recommended a five per cent tax on broadband internet as a means of supporting Canada's media industry in the midst of rapid technological shifts and changing consumer behaviours — a time when many viewers are dropping their cable bundles in favour of Netflix subscriptions.

The tax would contribute hundreds of millions of dollars to the Canadian Media Fund, which supports the development and production of Canadian screen-based content, including hit television shows, video games, web series and innovative new content.

But Heritage Minister Melanie Joly and Prime Minister Justin Trudeau quickly rejected the committee's suggestion, stating that the government is committed to decreasing Canadians' taxes, not increasing them.

Consumer advocacy group Open Media, which raised more than 37,000 signatures in a petition against the idea, applauded the prime minister's move.

"It's clear that the government has listened carefully to the over 30,000 Canadians who warned that this proposal would further raise our monthly bills and worsen our digital divide," said Open Media communications manager Meghan Sali.

But while the proposal has its critics, many agree with the heritage committee's premise — that something needs to be done to help the Canadian media industry through this time of transition.

Investing in the future

Andrew Addison, vice-president of communications and marketing for the Canadian Media Producers Association, says Canada's media industry is currently thriving, but adds a caveat: "We want to make sure that that can continue into the future."

That future is coming fast, propelled by Silicon Valley-based tech giants such as Google, Facebook, Amazon and Netflix.

For those in the Canadian media industry, that future is a bit uncertain, because as cord-cutting television viewers opt for streamed content, traditional revenue sources for homegrown media are drying up.

Not only are advertising dollars dwindling, so are sources such as the Canadian Media Fund, which fuels the Canadian media industry and is supported by a levy on cable subscriptions.

Up to now, Addison points out, there's been something of a virtuous circle, as cable providers have invested back into the creative ecosystem that creates content for them.

The series Orphan Black, starring actor Tatiana Maslany, left and right, has been one of the most successful Canadian exports in recent years. (Space/Canadian Press)

"The system that's in place was based on a philosophy that those who benefit from a system, corporate entities, also invest back into it," he says.

"We have decades of history and track records to look back at and say, 'This works.' It creates hundreds of thousands of jobs, right across the country, and not just writers and directors, but taxis and hotels and more."

'This works'

The logic goes that if people are streaming the content they once accessed through cable, internet service providers (ISPs) should be contributing to the media ecosystem just as the cable companies have been required to.

Jill Golick, a Toronto-based writer and producer and the president of the Writer's Guild of Canada, is strongly in favour of having ISPs contribute to the creation of Canadian screen-based cultural products.

"They are amassing considerable wealth through the distribution of our product around the world. They should be giving a percentage of that money back to the artist who created the work," she says.

"Every culture in the world, except the American one, is in danger," says Golick. "Around the world, the easy and cheap availability of U.S. screen-based entertainment is drowning out whatever is locally created. With the old systems of funding and distributing local culture product crumbling, only the U.S. product is thriving."

Addison says that because "we live next to the biggest media market in the world," it's important "that the government continues to support the sector. We need to contrive to have that success as technology evolves."

'Responsibility to the greater good'

While critics of the proposed tax argue that a new tax is a bad idea, it's worth noting that the tax would be negligible compared to the steep fees that Canadian internet users already pay.

Some people believe that if the government's prime concern is keeping costs down for Canadians, their efforts would be better spent battling the stranglehold the big three telcos have in Canada.

Because there is so little competition when it comes to internet access, companies such as Bell, Rogers and Telus have been able to "abuse" consumers for years, according to Open Media, simply because people need their services and there are no other options.

If the government were to implement a more open and competitive ecosystem, whereby consumers have more choice among telcos, Canadians would inevitably pay less for their broadband and wireless subscriptions.

And if everyone was paying, say, $30 less each month, a five per cent "tax" to support the Canadian media ecosystem might seem reasonable.

Golick agrees with Open Media that consumers should not be the ones footing the bill for Canadian content. Rather, a financial contribution from the ISPs should be seen as compensation for the use of other people's products.

"There needs to be legislation that compels ISPs to reinvest a portion of their profits in content creators, but it should also forbid them from passing the cost on to consumers," says Golick.

"The ISPs are getting a pass to make money hand over fist. It's like a dream come true for corporate entities that don't have any responsibility to the greater good."

About the Author

Ramona Pringle

Technology Columnist

Ramona Pringle is an associate professor in Faculty of Communication and Design and director of the Creative Innovation Studio at Ryerson University. She is a CBC contributor who writes and reports on the relationship between people and technology.