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Federal government says it won’t impose 5 percent broadband internet levy

The Canadian federal government has rejected a proposal by a special parliamentary to impose a five percent levy on broadband internet providers.

The office of Heritage Minister MĂ©lanie Joly announced the decision on Thursday morning, and Prime Minister Justin Trudeau spoke on the decision at an event in Montreal.

“We respect the independence of committees and Parliament and the work and the studies they do, but allow me to be clear: We’re not raising taxes on the middle class, we’re lowering them,” he said. “We’re not going to be raising taxes on the middle class through an internet broadband tax. That is not an idea we are taking on.”

The levy was the centrepiece of a special, more than a year in the making, majority report produced by the heritage committee. The levy would have been imposed on high-speed internet services that allow users to stream music, movies and TV shows, with the intention that the tax would boost the Canada Media Fund by hundreds of millions of dollars. Currently, the fund also receives contributions from a levy on cable bills.

Some of the report’s other suggestions call for the CBC to remove ads from its digital platforms, recommends that print outlets to receive a tax credit for their digital investments and suggests an allowance for media companies to deduct taxes on digital advertising on Canadian-owned platforms

The heritage committee spent more than a year researching and compiling the report. Hedy Fry, the Liberal MP who chaired the committee, says the main reason her committee proposed the five percent levy was to level the playing field for Canadian media companies.

“To try and replicate the ways of the analog world in a new digital world. This is a fool’s errand; the world is changing [and] change means disruption.”

Fry told the House of Commons as she tabled the report that today’s decision was not made easily.

“We had very important debates. We really were passionate about this. There was a difference of opinion, however, Mr. Speaker.”

The Conservative Party’s dissenting report was also tabled.

“Overwhelmingly, the recommendations of the majority on the committee have embraced an effort to turn back the clock in the media world, and keep things the way they were,” said Conservative MP Peter Van Loan.

“To try and replicate the ways of the analog world in a new digital world. This is a fool’s errand; the world is changing [and] change means disruption.”

[source]Canadian Press, CBC[/source]

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