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Amazon, Apple and Spotify want to challenge Canada’s streaming tax

Amazon, Apple and Spotify want to challenge Canada’s streaming tax
Amazon, Apple and Spotify want to challenge Canada’s streaming tax

When Canada’s broadcast regulator announced plans in June to impose a five percent levy on local revenues from global streaming services, DSPs were not happy.

Now the owners of three of the largest music services – Amazon, Apple and Spotify – have filed a lawsuit against the tax.

The news was confirmed by their industry association DiMA, which said the case will be heard before Canada’s Federal Court of Appeal.

“The approach taken is backwards and poor policy by the current Canadian government. It fails to recognize the existing contribution of streaming to music production,” said DiMA President Graham Davies.

“Imposing a 5% levy on streaming services is unsustainable, bad for consumers and violates the policy guidance of Canadian Heritage and the Online Streaming Act. This levy risks increasing costs for Canadians and may also violate trade obligations, exposing Canada to economic consequences.”

The regulator, the Canadian Radio-television and Telecommunications Commission (CRTC), said the 5% levy would raise C$200 million annually. The funds would be used to support Canadian content, including local radio and television news, French-language and Indigenous content, and work by/for diverse and underrepresented communities.

Canadian politicians support this move: “This money will go back into Canadian creation, be it music, television series or music that will likely return to their platforms,” ​​said Culture Minister Pascale St-Onge at the announcement.

But the DSPs are determined to make their case in court – and not just the music services. As The Globe and Mail reported, the Motion Picture Association has also filed a lawsuit against the decision on behalf of its members.

As that process progresses, debate continues about what the tax would mean for Canada (and, more broadly, what impact similar measures might have elsewhere in the world).

Industry economist Will Page, a longtime critic of Canadian policy, appeared on the Law Bytes podcast this week and expressed his view that it is, for example, “discriminatory and could ultimately harm the Canadian music market.”

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