God bless the music fans within the Canadian Taxpayers Federation. They’re calling for the Feds to drop the requirement that Canadians pay GST or HST on downloads of digital entertainment like music and movies. They say it’s unfair that our providers have to pay these taxes while American competitors don’t.
For example, Netflix and iTunes–US companies–don’t have to collect any sales tax from us. However, any Canadian company which tries to compete with those giants does–as much as 15% in some provinces.
Gregory Thomas, a spokesman for the Federation, says this is the equivalent of Canadian Tire having to charge sales tax while Costco and Wal-Mart being exempt. That’s would be a silly situation, of course. So why does it apply in the digital realm?
Without a level playing field–and conditions that allow for true price competition–what incentive is there for a Canadian company to get into the game?