Soon, your Netflix bill will be a little bit more expensive.
A recent change in Canada’s tax laws requires the platform to charge HST and GST on top of the regular monthly fee. Users of the service received an email notifying them of the changes:
“Federal GST/HST will start to apply to your Netflix membership cost.”
In November 2020, The Federal Government announced plans to impose taxes on various tech giants and large digital web services and subscriptions such as Netflix, AppleTV, and Amazon Prime. In May, Prime Minister Trudeau announced that foreign online streaming services would be subject to the tax.
As one of the original streaming networks, Netflix Canada has around 6.5 Million subscribers to date. In 2017, a study showed that Netflix users equaled the number of all traditional cable subscribers combined.
The current cost of Netflix Canada’s monthly premium service is CAD18.99. The small addition of tax may seem insignificant on such a low amount, but with so many users, the GST/HST add-on comes up to a total of over $2Million in tax fees in the first year. It’s expected that the new tax can bring in between $1 billion $3 billion over the next five years in Canada.
Perhaps the worst kicker is that the tax will begin being applied on July 1st - Canada Day.
Since launching its streaming service in 2007 after acquiring Blockbuster in 2000, Netflix has increased its monthly fee several times. The most recent increase was in January, when standard accounts went up from $13.99 to $14.99. Premium accounts increased from $16.99 to $18.99. Previously, standard accounts were priced at $12.99 in 2019.
The yearly increase hardly makes most users bat an eye. However, many are now speaking about the HST/GST addition. During the 2015 federal election, Justin Trudeau claimed that the Liberal government would not be imposing what was then referred to as the “Netflix Tax”.
Trudeau stated in the HOC in February 2021: “Mr. Speaker, the NDP is proposing to raise taxes on the middle class, which is something we promised we would not do and have not done. We explicitly promised in the 2015 election campaign that we would not be raising taxes on Netflix”
After July, Premium users will pay over CAD20.00 for their binge-watching habits.