Tax Netflix and other e-commerce companies, say Canadians and CRA professionals

Ottawa, February 21, 2019 – The federal government needn’t worry about a consumer backlash to a sales tax on Canadians’ Netflix accounts, if newly released results from an Environics Research poll and a separate survey of Canada Revenue Agency (CRA) tax professionals are any indication, says the Professional Institute of the Public Service of Canada (PIPSC).

When asked if “E-commerce companies such as Netflix, Google, Amazon and Uber, should be subject to Canadian taxes for business carried out in Canada,” almost 8 out of 10 Canadians (77%) agreed, more than half of them (54%) strongly. Professionals at the CRA went further, with almost 9 out of 10 (87%) agreeing and almost 7 out of 10 (67%) strongly agreeing.

“It’s clear that Canadians, including our own CRA members, believe it’s only fair that foreign e-commerce giants who do business in Canada be taxed,” said PIPSC President Debi Daviau. “In fact, it’s high time they were, and we hope the next federal budget includes measures to ensure they are.”

The findings are contained in a third and final report on tax fairness based on the two surveys. In addition to taxing e-commerce companies, the report, which examines the ways some companies have been avoiding taxes, recommends:

  • Creating a publicly accessible “beneficial ownership” registry to curb the use of shell companies that redirect profits from one country to an offshore tax haven in another (Canada is particularly vulnerable to this practice, also known as “snow washing”), and
  • Ending “profit shifting” – the strategic transfer of corporate profits from one country to another in order to minimize or eliminate paying taxes – a practice Canada and other member countries of the Organisation for Economic Cooperation and Development are seeking (if too slowly) to end.

Over 7 out of 10 (75%) of CRA tax professionals surveyed believe that federal and provincial governments should require corporations to publicly identify "beneficial ownership" relationships. And over two-thirds (71%) believe that Canadian rules related to setting up offshore corporations or tax accounts are too lenient and should be reformed.

The public opinion survey by Environics Research was commissioned by PIPSC and conducted by telephone among 1,000 Canadians between July 3 and 8, 2018. The results can be considered accurate + or – 3.2%, 19 times out of 20.

Invitations to participate in the CRA professional employees survey were sent to 11,599 members of the Audit, Financial and Scientific Group (AFS) between February 20 and March 6, 2018, of which 2,170 (18.7%) responded.

The full report on the survey results, titled Shell Game: How Off-Shore Havens, Tax Loopholes, and Federal Cost-Cutting Undermine Tax Fairness, can be read here.

The Professional Institute of the Public Service of Canada represents approximately 60,000 public service professionals across Canada, including nearly 12,000 auditors, managers, forensic accountants and other tax professionals at the CRA.

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For further information: Johanne Fillion, 613-228-6310, ext. 4953 or 613-883-4900 (cell), jfillion@pipsc.ca