Mr. Speaker, in this adjournment debate, I am pleased to follow up on a question that I asked the Minister of Revenue, but was answered by the Parliamentary Secretary to the Minister of Canadian Heritage. It seems as though he is the one who will be answering again this evening.
My question primarily has to do with the Netflix agreement. Everyone is starting to understand how this agreement gives Netflix a tax advantage over its competitors. I want to follow up on this issue and on the government's completely twisted logic.
Last week, the government kept spouting the same empty rhetoric to explain why it decided to give Netflix a tax holiday. This tax holiday was granted in exchange for an investment, but there is no guarantee of this investment. Netflix is getting a tax holiday in exchange for the infamous agreement presented by the Minister of Canadian Heritage. This is what I would like to talk about today.
The government gave a foreign company a tax break for doing business in Canada without having to abide by same tax rules as its competitors. This company is doing business with Canadian consumers. When it sells a product to consumers in Canada, it does not have to charge GST or federal sales tax because the government is allowing this situation to continue. The government is allowing a company to sell a product, in this case a subscription to Netflix, without charging consumers any GST.
According to the government and its twisted logic, this is not a problem because that is just how things work. That is the government's reason for not forcing Netflix to charge GST. It is possible to make Netflix charge sales tax because several other countries have already done so. Although Netflix is an American company that operates all over the world, it pays sales tax in some countries. Most countries actually have taxes associated with the sale of goods and services.
Canada can make Netflix charge sales tax. It is possible. The argument that the government cannot do this does not hold water. In fact, the government is not even using that argument. In the beginning, the Minister of Canadian Heritage said that it was too complicated and that it would require an international agreement to make Netflix charge sales tax. That is completely untrue.
Now the government's argument is that it does not want to impose a new tax on consumers. Based on the government's twisted logic, the GST is a new tax. This is like telling huge multinationals like Target or Walmart that when they come to Canada to sell their goods and services, they will not have to charge their customers GST at the checkout because that would be a new tax. This is like telling a new company that sets up shop in Canada that we cannot ask it to charge GST because that would be a new tax, and Canadians cannot afford any new taxes. That is the logic the Liberals are using today. In other words, they are saying that a foreign company or multinational that has a physical presence in Canada does not have to charge GST, although the store next door does.
Can my colleague explain how the government came up with this logic? How is the GST a new tax for businesses?