Nobody wants to pay more in taxes. But there’s no logical reason why Netflix and other Internet companies should be allowed to sell their services in Canada without being required to collect the HST.
Tax rules are very clear: if a product or service is being delivered in Canada to Canadians, the tax applies. Governments never want to be responsible for a new tax, but this one wouldn’t be new. It’s simply applying an existing tax properly to a company doing business in our country. And the effect is not insignificant. Netflix, as one example, is causing many Canadians to stop paying for other services on which the HST applies. By not enforcing the rules, the government is forgoing hundreds of millions in revenue, which means it has to collect more in other areas in order to pay for health care and other expenses.
By letting foreign Internet players off the hook for the HST, the government isn’t really saving Canadians money. It’s letting American and other businesses get away with breaking the rules and giving them an unfair advantage over their Canadian competitors.