A Liberal-dominated committee will be calling for a 5-per-cent tax on broadband Internet services to fund Canada’s media industries, which are struggling to adapt to technological changes and evolving consumer habits, sources said.

The move would add hundreds of millions of dollars in revenues to the Canadian Media Fund, which already receives a levy on cable bills to finance the production of Canadian content. However, it would open up the government to accusations that it is once again raising taxes on consumers.

Liberal and opposition sources said the new levy is the central proposal in the majority report of the Canadian Heritage Committee of the House of Commons, which will be released on Thursday. The sources spoke on condition of anonymity as the report is not yet public.

The Heritage committee has spent more than a year studying Canada’s media industry, in which companies are steadily losing advertising revenue and market shares to Facebook, Netflix, Google and other international giants.

Sources said MPs of all stripes acknowledged the shaky state of the industry, including the decline in local news coverage in communities across Canada. However, they disagreed on the solutions to the problems, with the Conservatives refusing to sign on to the majority report, sources said.



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