Canada is now taxing streaming services to “fund local content” - Kotaku In Action 2

Canada is now taxing streaming services to “fund local content” (media.kotakuinaction2.win)

posted 199 days ago by Ahaus667 199 days ago by Ahaus667 +66 / -0

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– Ahaus667 [S] 14 points 199 days ago +14 / -0

https://archive.ph/RSQwM

By modernizing this framework, streaming services can now “make meaningful contributions to Canadian and Indigenous content.” “Based on the public record, the CRTC is requiring online streaming services to contribute 5% of their Canadian revenues to support the Canadian broadcasting system. These obligations will start in the 2024-2025 broadcast year and will provide an estimated $200 million per year in new funding,” the Government of Canada said. This funding will be “directed to areas of immediate need” such as local news on radio and television, French-language content, Indigenous content, and content created by and for equity-deserving communities, official language minority communities, and Canadians of diverse backgrounds,” the Government of Canada said.

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▲ 23 ▼

– simian 23 points 199 days ago +23 / -0

I’m missing the part where this is the private companies’ responsibility, or why the taxes they pay aren’t covering this need already. Obviously, this will just result in a 5% increase in everyone’s fees (worldwide, I’m sure, not just Canada). But I wouldn’t be surprised to see these services just pull out of Canada altogether, for fear of this shit setting a precedent.

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▲ 3 ▼

– HallucinatoryBeing 3 points 199 days ago +4 / -1

5.26%. If you want the customer to completely pay for the tax and not eat into your bottom line, you divide revenue by .95, not multiply by 1.05.

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▲ 2 ▼

– DefinitelyNotIGN 2 points 199 days ago +2 / -0

Still technically incorrect, they they would recursively need to both pay taxes on that additional 5%, and pay the new 5% tax on it as well, since it's a fee increase.

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▲ 2 ▼

– HallucinatoryBeing 2 points 199 days ago +2 / -0

That's what the 0.26% covers, the additional revenue from hiking the price.

Say your revenue before this tax was $100, just to use easy numbers.

A flat 5% increase: 100 x 1.05 = 105. New revenue taxed: 105 x 0.05 = 5.25. $0.25 in the red.
A 5.26% increase: 100 x 1.0526 = 105.26. New revenue taxed: 105.26 x 0.05 = 5.26. Back to the old "real" revenue.

Of course, there's nothing stopping a company from hiking prices higher, but hiking by 5.26% is the absolute minimum to break even.

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