What’s Missing from the Netflix Deal?

Commentary, Regulation, Alexandra Burnett

In the last few years, Netflix has begun to take over the television world, first in the United States, but now it’s made its way to Canada.

According to CBC, as of June 2016, there are more than 5.2 million Netflix customers in Canada. On September. 28, 2017, Heritage Minister Joly announced the new Canadian film venture with Netflix. She said that a $500 million investment over five years, of “new money”, is a way to fulfill the government’s new vision for cultural policy in Canada. As well, the money would fund new Canadian film productions. From the $500 million investment, approximately $25 million will be used to produce more French-language content.

This deal was already controversial, with many people wondering why a tax on Canadian subscribers to Netflix was not imposed instead. The Netflix tax was, in fact, proposed by a parliamentary committee earlier in June, but was rejected by Prime Minister Trudeau. This type of tax has been instituted in some European countries and in Australia, and would have added more funding to the Canadian sector than the proposed $500 million. Rather than giving Netflix control over Canadian content, many Canadian filmmakers are concerned that the decisions about Netflix Canada will be made in its headquarters in California.

While this investment is good for Canada, and its film industry, it is important to look at the deal itself. First, this deal is part of the government’s new cultural policy, and according to Minister Joly, “everything” was put on the table and reviewed. When the deal was announced one week ago, not one of Netflix’s Canadian representative was present for the announcement. This leaves a lot of room for uncertainty. Canadians are confused with the specific role that Netflix will play in the country, and in hopes that it will not just create a few more productions using Canadian film crews and locations, but not tell Canadian stories.

The Canadian film industry has earned an admirable reputation on the international stage, however, it is still a challenge to compete with films made next door in Hollywood. This new deal will create an equal playing field for Canada, but only if the money is used to produce high-quality Canadian content. In order for this deal to work, the government needs to be more transparent.  Both Netflix and the Canadian government need to present a fleshed-out plan to make it clear what Netflix will actually do. Canadians, and especially taxpayers, need to know how they will benefit from this deal. This is a policy that the Federal government should adopt for the future; anytime there is a deal struck that affects taxpayers, transparency is crucial.  

It is refreshing that the Federal government is looking to a private company to generate competitive content, but it must be clear to citizens what it is doing. Hopefully over the next few weeks, the government will publish a more thorough plan showing what the deal with Netflix really entails. For now, the plan is ambiguous.


*Alexandra Burnett is Junior Research Associate currently enrolled in the Frontier Centre for Public Policy Internship Program.