Netflix Responds to "Conspiracy Theories" Over Canadian Investment

'Alias Grace'

U.S. streamer says recent price hike has "nothing to do" with $400 million investment deal for series like 'Alias Grace' that spares taxes and local content obligations.

Netflix on Tuesday responded to what it calls "conspiracy theories" over its CAN$500 million (US$400 million) Canadian investment.

"We’d like to set the record straight: The recent price increase has nothing to do with our investment or commitments," Corie Wright, Netflix’s director of global public policy, said in a blog post. "That price increase was planned a long time ago," she added.

Wright also denied the U.S. digital player made any "deals about taxes" when negotiating its Canadian production/investment deal with the federal government. That deal includes launching Netflix Canada, a permanent production presence north of the border for Netflix, its first outside the U.S.

Netflix drew fire from local broadcasters and cultural groups when it secured agreement from Ottawa to be spared fiscal and Canadian content obligations already imposed on Canadian broadcasters and cable operators. Wright reiterated Netflix's stance that it doesn't have to pay taxes as an online service, not a broadcaster.

"Some say Netflix got special treatment because the government didn’t force us to meet special content quotas as part of our investment — that's wrong," she argued. Wright said Netflix uses no local broadcast spectrum or rights of way, "and we don’t receive the regulatory protections and benefits that broadcasters get (and, by the way, we’re not asking for them)."

The Netflix policy chief said her company has "more work to do" to invest in Quebec, where the French-speaking government has unveiled plans to impose a provincial sales tax on Netflix, Amazon and other U.S. video streamers operating locally. Netflix also agreed to invest CAN$25 million (US$20 million) over five years in Canadian "market development," hosting recruitment drives and cultural events to bolster local producers.

At the same time time, Wright said Netflix's investments in Canada would be guided by market opportunities, not local content obligations. "We have invested in Canada because Canadians make great global stories. That says more about the quality and strength of Canadian content, talent and crew than a commitment of any dollar amount," she said.

Netflix and the CBC are co-producing the miniseries Alias Grace, written by Sarah Polley and directed by Mary Harron from a crime novel penned by Margaret Atwood, and Anne, a TV drama based on the Anne of Green Gables book series. Netflix and Rogers Media, which operated the now-defunct domestic streamer Shomi, also teamed up on the Canadian thriller series Between.

Wright said Netflix will continue acquiring TV series shot in Canada, like Hemlock Grove, A Series of Unfortunate Events and Okja, projects that showcase "Canada’s outstanding talent, facilities, resources and locations."