Quebec will forge ahead with plans to tax Netflix with or without the support of the federal government, the province’s finance minister has said in a letter to his federal counterpart.
“Our sales taxes have to apply to the realities of the 21st century,” Carlos Leitao wrote in the letter dated Tuesday to Bill Morneau.
Calling it a matter of “fairness,” Leitao said “Quebec will have no choice but to act alone” if the federal government doesn’t budge.
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An agreement the federal government has reached with Netflix allows the U.S. web-streaming giant to forgo paying sales tax by investing $500 million in Canadian productions over the next five years.
Leitao says the deal gives Netflix an unfair advantage over Quebec-based companies that offer similar services.
Quebec’s position did nothing to sway Morneau.
“We have been clear: our government has no plans to introduce a new tax on middle class Canadians,”, his spokeswoman, Chloe Luciani-Girouard, wrote in an email Wednesday.
“Should (Quebec) determine they want to move forward on imposing a sales tax on Netflix, they can proceed.”
In Quebec City, Leitao told reporters he doesn’t require the feds’ permission to proceed but that he still needed to inform the federal government because the province’s sales tax is harmonized with the federal GST.
Leitao said his government has been given indications by the company it is willing to pay taxes to the province.
“(Netflix) is telling us, very honestly and clearly, that they will co-operate,” he said.
A spokesperson for Netflix said in an email, “Netflix pays all taxes where required by law.”
Leitao intends to introduce the measure as of 2018.
Last month, all Quebec political parties voted unanimously in favour of a motion to ensure the provincial sales tax is quickly imposed on all foreign companies that offer products and services online, notably in the cultural sector.
