That means Canada's next federal budget could include a "digital tax on everything." This would force Internet service providers (ISPs) to help fund the oft-debated "Canadian content" system, including film, television, and music that a special criteria scheme deems "Canadian" enough.
Lobbyists are pressuring Heritage Minister Mélanie Joly to push this levy through, but it would be a major mistake for the Liberal government — and not just because they likely owe their election to the young and the web-savvy.
Why is taxing the Internet a bad idea? Let us count the ways.
1. Internet Access Will Become Less Affordable
Canadians already pay some of the highest prices for Internet access among G7 countries, and a tax on ISPs would make them even higher. It would deepen the digital divide by hitting low-income families, Indigenous communities, and rural and remote Canadians the hardest.
2. An Internet Tax Will Hamstring Canada's Innovation Agenda
The Internet has become a synonym for all things revolutionary and unpredictable, in the best way possible (for the most part). This is the power the Liberals are trying to harness in their Innovation Agenda, whether in education, research and development, or start-up acceleration.
An Internet tax would drain the life out of this mission to foster innovation. It's the opposite of the "bold, coordinated strategy on innovation" that Minister Navdeep Bains (of Innovation, Science, and Economic Development Canada) is looking for.
3. Canadians Really Don’t Like It When You Mess with Their Internet
When the Canadian Radio-television and Telecommunications Commission (CRTC) tried to metre Internet usage back in 2010, it spurred the largest political campaign in Canadian history, with more than half a million of us standing up to the decision.
In fact, the outcry compelled then-Industry Minister Tony Clement to issue a government decree overriding the CRTC ... via Twitter.
Even Stephen "I disdain the Supreme Court of Canada and eat the Charter for breakfast" Harper didn't dare get between Canadians and their beloved Internet.
4. The Internet Is Not Cable TV — And That’s a Good Thing
Canadian law protects a hard divide between telecommunications, a.k.a access (your Internet connection), on one hand, and broadcasting, a.k.a. content (TV shows or movies), on the other.
Taxing Internet revenues to fund the above-mentioned Canadian content (CanCon) system opens a dangerous Pandora's box. At best, it burdens emerging platforms to prop up an outdated, exclusionary model, and at worst, it turns the open Internet into glorified cable TV.
5. What Is Canadian Content, Anyway?
Taxing the Internet is not the way to promote Canadian content in the digital age. The Internet is chock-full of amazing creators in Canada, who just might not fit into the official category of CanCon. Just think of all the online artists and producers creating crash courses, comedy, political parody, and award-winning web series.
What could be better for Canadian content than putting the means of cultural production in the hands of actual everyday people from diverse communities all across Canada?
6. An Internet Tax Is Unnecessary
This is not Minister Joly's only option. Heritage Canada could consider better alternatives such as applying the general sales tax to foreign online services in Canada, using general tax revenues, or redirecting wireless spectrum auction proceeds.
If the government really wants CanCon to succeed in the 21st century, then above all, they should make the Internet as affordable and accessible as possible to all Canadians — both as creators and viewers.
In the meantime, Prime Minister Trudeau or Minister Joly should start by publicly taking this rumoured Internet tax off the table.
Want to do something about it? Help make it easier for them to say no by signing OpenMedia's petition against the proposed Internet Tax.