New Canadian tax may lead to Spotify price rises
Canada are going to make streaming services pay more to the government, and we’ve already seen what that means for Spotify subscribers.
Canada have launched a new ‘Online Streaming Act‘. Part of that will require online streaming services who generate over CA$25 million a year in Canada to contribute 5% of their Canadian revenues to the Canadian broadcasting system.
A service that is definitely eligible for the new tax is Spotify. This may worry Canadian Spotify subscribers, with the potential that this will lead to increased prices for their music streaming plans. Earlier in the year, Spotify announced they would increase their prices in France in response to higher tax charges from the government.
France introduced a new streaming tax for eligible companies that would be used to fund their Centre National de la Musique. The tax required 1.2% more of streaming revenues to be paid to the government. Spotify passed the cost onto subscribers, by raising their subscription prices by 1.2%.
Canada are similarly looking to raise money to fund new Canadian-made entertainment. Whilst Spotify haven’t yet announced that they will pass the 5% tax increase on to subscribers, the precedent suggests that there will be a response from the service in due course.
DiMA, the body representing music services, have hit out against the 5% tax. DiMA boss Graham Davies says: “We are deeply concerned with today’s decision to impose a discriminatory tax on music streaming services that are already making significant contributions to Canadian artists and culture.”
Late last year, a similar uncertainty over increased government payments by Spotify in Uruguay made them threaten to leave the country entirely. Whilst there may have been a misunderstanding in that case, Spotify are clearly not simply taking any decisions to make them pay more lightly.