Tuesday, October 3, 2017

Netflix... Quebec Demands English Pay Their Bills

All the anger and bluster coming out of Quebec over the federal government's 'deal' with Netflix that allows the American media giant to avoid paying the GST and PST taxes is really just a smokescreen over frustration that Netflix Canada doesn't have a French version with zero plans to provide French programming in the future.
In fact, the way Netflix operates is a complete anathema to French culture defenders. While the content is almost all English, subtitles are provided in the French language and Francophones can choose and load English content via a French interface.

The tax complaint is a false flag, and listening to Quebecers whine that Netflix doesn't collect the PST and GST taxes belies the fact that it won't be Netflix paying, but consumers.
Only in Quebec can consumers demand that taxes be applied and since Netflix hasn't been ordered to collect these taxes, perhaps the Quebec government can send a letter to subscribers asking them to pony up the provincial sales tax voluntarily, since so many have publicly complained that they want to pay.
How's that for stupidity!
No, the real bugbear is that Netflix cracked the entrenched media monopoly that has English Canadians paying hundreds of millions of dollars to subsidize French programming.

Quebec language and culture hawks are fuming that Netflix doesn't pay into the Canada Media Fund, the $360 million slush fund used to finance Canadian media content.
The fund is used to finance TV shows made in Canada and is split into English, French and Aboriginal programming.
The French side receives almost half the funding that the English side does, but with 22% of the Canadian population, paying less than 20% of the taxes, it means that English taxpayers are overpaying for French content to the tune of $60 million a year.
The situation is even more striking at the CBC where the billion dollar budget is split 60%-40%, meaning that out of Radio-Canada's $400 million budget, English Canadians are contributing $200 million extra to fund the French language network.
All this is viewed as completely fair in Quebec, some even arguing that the split should be fifty/fifty, in order to provide Francophones with equal quality programming, regardless of who pays for it.

The fact that Netflix is English irks French language and cultural defenders to no end and the fact that Quebec can't force Netflix to produce French content is viewed as giving English Canadians an unfair content advantage.
And so the announcement that Netflix will invest $500 million in "Canadian" content infuriates Quebec politicians because that investment will produce English language programming that can be viewed across the world.
The idea that Netflix would be forced to produce French language content made in Quebec is laughable because the shows could be viewed only in the minuscule Franco-Canadian market in the original Quebecois French. Even viewers in France would probably watch those shows with subtitles because like Haitian Creole, Quebec French is particularly difficult and hard on the French ear.
I remember a reporter in Paris telling Eugenie Bouchard that her spoken French with a distinctly Anglo-Canadian accent was much more pleasing as opposed to the perceived harsh Quebecois French. Ouch, that's gotta hurt!

At any rate, if the French world needs subtitles to understand Quebecois content, then the content may as well be provided in English with French sub-titles  The idea floated by Quebec politicians that Netflix should be forced to produce Quebecois French content is based on the tried and true Canadian model of having 'les autres' pay for Quebec French content, something Netflix is having none of.
Such is the fantasy world of French language culture and language defenders who believe that it is the place of English Canadians and American networks to subsidize at a loss, Quebec French content.

And so the Quebec government is declaring war on Netflix much in the same way it did with Uber, attempting to impose ridiculous regulation in the hope that Netflix will fold just as Uber is in the process of doing.

It remains to be seen if Uber actually leaves Quebec because of the regulatory onslaught. If so we will be left with a rotten taxi industry that refuses to modernize because to do so would destroy their 'cash' business where practically every single taxi driver in Quebec underpays his or her taxes, by failing to declare cash fares.
This while the entrenched taxi scofflaw industry complains about Uber not paying their fair share of taxes, prompting the Quebec revenue department to raid Uber's Quebec office in search of under-declarations.

But Netflix is not Uber, it is vastly richer and more powerful, with unlimited financial resources that could tie up Quebec in protracted legal procedures that would last a decade.

The Canadian government's sweetheart deal with Netflix makes sense given the fact that Canada is in sensitive negotiations with the United States over NAFTA and where access to the Canadian market by American media giants can become a thorny issue.
Let us remember the furor put up by entrenched Canadian media giants who bound together to force the government to abandon a proposed bandwidth sale to Verizon, fearing the threat that the American giant would begin operations in Canada.

This 'bigger' picture means nothing to Quebec, its legislature angrily passing a unanimous motion demanding Netflix collect the Quebec provincial sales tax, denoting Quebec's rage over Netflix disregard to Quebec sensitivities.
This united outrage by Quebec politicians over sales tax is comical in that Netflix revenues in Quebec are not that significant. Of the estimated 5 million Canadian Netflix subscribers, it is estimated that only about 500,000 are located in Quebec paying an estimated $60 million dollars a year in subscription fees. Applying the provincial sales tax would bring in a whopping $6 million dollars, a pittance, which would contribute less than one thousand of one percent of the annual Quebec budget.

The self-righteous blather about 'fairness' and 'level playing fields' spouted by Quebec politicians and media scions like Pierre-Karl Péladeau would be laughable if not so sad.
Quebec has forever lobbied for and defended its right to lop-sided subsidies and special treatment and the very last thing they would want is a level playing field.


  1. There is a french version of Netflix here in Quebec. It Videotron "Club illico" Only different is that Club illico has ZERO content in English ( last time I check. I could be wrong. ) While Netflix does have does have shows and movies in French. And most Netflix original Movies and TV shows, a good number are in French

    I would also like to say. First off there nothing wrong in adding more Quebec content to Netflix and that but the problem is that videotron's channel on demand and " club illico " own the exclusives on most Quebec shows and what language to presented it. I do not think videotron would take kindly having to give up on there exclusives content.
    I would love to be a fly on the wall during a sit down interview between PKP and Netflix Canada. I don't think PKP is willing to share with Netflix.

  2. Mr. Sauga here. More reasons in this commentary that Canada would be better off without Quebec. Good-bye to 40% French CBC budgets paid heavily for at the expense of Anglophones and other Quebec largesse disproportionately paid for the rest of Canada. Quebec minorities making up 20% of the Quebec population pay 40% of the tax base. Joual Quebec makes up less than a quarter of Canada's population yet gets 40% of the public television budget, disproportionate amounts of E.I. benefits and other federal government budgets.

    Oh yes, and they want the minorities to pay the lion's share of Netflix sales tax? Why doesn't the rest of Canada demand Quebec pays the lion's share of bilingual packaging? I don't care if packaging is all in English, not a bit, but Joual Quebec sure cares about French on all packaging.

    Interestingly, I went to see the total eclipse in August. I watched from a small town in Missouri and met a group of young people, Americans, one of whom learned French. She described "Quebec people" as talking through their noses! I laughed heartily and explained Québécois, as they liked to be called, speak a slang called Joual. Acadians, nice folks that they are, gave me fits when I took their calls in French because they speak mostly English words with a French twang (like "upgrader", "booker" meaning to upgrade or book like in book a trip. But I digress.

    The bottom like is it is not feasible to translate into anything but the French from France as that is the French most people in the world speak.

  3. I think the major difference between Uber and Netflix in terms of why Quebec can regulate one and not the other is not their wealth or resources. IMHO, the major difference is that Uber requires physical presence in Quebec to operate while Netflix does not. As Netflix is a streaming service, there is little to none that Quebec government could do, short of completely blacked out the service, an action that amount to censorship and might as well be illegal.

    If they want to go that way, meaning curtailing what streaming services offer, the should give a hard look to the porn industry. There are hundreds, if not thousands, paid porn sites streaming freely (free to stream, not free to view) on the internet and none of them pay any kind of taxes. I am pretty sure that in aggregate they are even bigger than Netflix.