With Netflix having avoided paying goods and services tax (GST), largely due to the backing of Prime Minister Justin Trudeau, the US-based streaming service now faces the potential imposition of a regional tax from the Quebec government.
Netflix signed an agreement with the national government whereby the firm has committed $500mn to the funding of new and original Canadian productions over the next five years, something that has helped the firm to remain exempt from paying GST.
However, Quebec’s Finance Minister Carlos Leitao has since come out questioning the motivations behind this tax exemption:
“I find it very odd that the federal government would exempt one company from a tax that all companies should collect. We need to know why the federal government may exempt this one company: what kind of an agreement was reached with this company?”
“Once we have that, then we will be able to prepare a more effective strategy in our dealings with Netflix – and not just with Netflix, but with all of the businesses in this field.”
With many backing Leitao, a vote in the National Assembly on a motion that foreign web-based companies pay Quebec sales tax was passed unanimously.
The move is likely to further the political debate around the subject, with Trudeau having been avidly against introducing such a tax on a national level.