Netflix fends off criticism over Canada investment

Netflix Inc said on Tuesday it had received formal approval to start a C$500 million production unit in Canada and sought to quell talk that it had asked for special tax benefits for investing in its first such unit outside the United States.

I don’t understand the criticism. A company should ask for all the deals it can, including tax breaks. If a country, city, state, or province doesn’t want the business, jobs, and investment, someone else will.

  • The Cappy

    I agree 100%. It’s called competition. (It’s one of the problems with the EU. The separate nations no longer truly compete with one another. But that’s a different story) If Canada incentivized Netflix, good for them. Hopefully it’ll be good for the region there, stimulate nascent talent, etc.

    • Mo

      Private corporations are supposed to compete with each other, but why are nations expected to?

      • The Cappy

        Other than innovation and advancement? All you need for evolution is variation, the ability to pass on changes, and competition. However, all three are actually necessary.

        • Mo

          For governments that have deliberately reduced their tax bases, and then have to go begging for corporate investment by granting even more tax breaks, we’re not talking about evolution here.

          • The Cappy

            Corporations… Ah yes, the evil of it. Except corporations are really just people exercising their freedoms competing in a very complicated marketplace. When people inside corporations fail, they get fired. When the corporations themselves fail, they die. Sometimes government tries to intervene, but mostly that’s how it actually works. Governments do best when they provide a milieu for the marketplaces to thrive, then they step back (cf Hong Kong as an interesting example of this). They do very poorly when they try to manage the infinite moving parts of an economy centrally (cf the entire 20th century, but Hayak described the problem very well). Do I get frustrated when large companies are given tax breaks that I don’t enjoy? Yes. But my area has done that, and there’s been a huge upsurge of building and renovation, a huge upswing in employment, and whole new shopping areas for all those new employees. There’s something to be said for it. It’s not just a bunch of evil elders white people in cigar-smoke filled boardrooms who benefitted from it.

          • Mo

            I’m glad you cited Hayek, because it tells me where your blinders are, and what parts of history you’ve been deliberately ignoring.

    • giannisg2004

      Not really.

      With the financial surface and lobbying power of a mogul like Netflix compared to the average taxpayer, it’s like 2 wolves and 1 sheep voting for dinner. It’s not “asking for a deal”, it’s blackmailing.

      The only reason why they get away with it, is shortsighted or corrupt politicians from other regions will succumb to the blackmailing and take the “deal”, so Netflix has a bargaining chip of taking their business elsewhere.

      Politicians and regulators need to cooperate to enforce fair taxation for everybody, include huge corporations, who then will have nowhere else to “take their business to” and will have to play by the rules, like everybody else.

      • The Cappy

        Don’t be silly. Netflix isn’t stealing from anybody, except viewed through the lens of the politics of envy.

  • Heos Phorus

    It‘s a „fear of missing out“-critique. Canada doesn‘t get the sales tax, but otoh it could get jobs and other benefits.

    Still on the other hand, tax breaks for big foreign companies create an unfair disadvantage for smaller, local companies. So at the end of the day that might still be worse for your economy – and worse for the customer.

    It‘s a hard call – those economic decisions are often not based on empirical science and come down to ideology.

  • sure but let’s call it what it is — corporate welfare. i just don’t like it when conservatives are anti citizen welfare but pro corporate welfare.

    • rick gregory

      It’s a fine policy if the government negotiates well. That is, if your state gives $5m in tax breaks to get film companies to do projects there, they need to be able to point to significantly more than $5m in benefits. So it adds jobs… and those people pay taxes. And if the secondary jobs that arise because of those jobs also are created and all told this result in, say, $4m in new taxes… oops. You lost $1m. If the knock on benefit it $15m in new tax revenue, yay, you’re $10m ahead.

      Basically, government needs to negotiate as a business – We’ll give you $N in benefits of Y years if you bring these benefits (and those benefits are worth something more than $N). Too often government doesn’t do this, though. They like the top-line credit of “this brings X jobs!” and not so much the math.

    • GlennC777

      It’s a classic tragedy of the commons situation. Whether Apple in Ireland, financial institutions in Delaware or BMW plants in South Carolina, the incentive to “attract investment” with tax breaks or other friendly policies results in an investment deficit elsewhere. Just look at off-shoring and “inversions” as two examples of these forces weakening our tax base in the US.

      It also favors large businesses over small, the opposite of what is desirable.

    • The Cappy

      Corporations employ people. If you bring an industry into an area, you increase employment, deepen the community skillset, and broaden your tax base. All of which are good things.

      • Mo

        Sure it is. Until the film shoot’s over.

      • Which is meaningless if the project-based tradesmen don’t delivery a whole lot of income tax, compared to the corporate income tax losses.

        Classic conservative move tho — shift the tax burden from the corporate entity and onto the worker. Nice.

        • Mo


  • Richard Wolf

    Tell that to Margrethe Vestager.

  • caIicojane

    Nothing but upside to this — pure tax & job generation that will boost regional economies, unlike the bogus tax incentives for banks just to employ a handful of people despite earning several billion in net profit every quarter. 😛

    • Mo

      Nothing but upside for the corporate recipient of a tax abatement, anyway. We can always cut funding from some already-depleted vital public service or other, right?