Canadian Internet providers are using data caps to inflate their profits, not provide better service, Netflix CEO Reed Hastings says.

The video-streaming company has released a plan to combat low downloading allowances, but Hastings said yesterday that customers shouldn’t have to ration their data use. The true cost of that data is less than a penny per gigabyte and shrinking, he said, though Internet providers have disputed that figure.

On Monday, Netflix reeled out options to control consumption of data. Users can still watch a movie or TV show with the best available quality, which can take more than two gigabytes per hour to stream. But a new default setting — at a lesser quality — will consume only 300 megabytes an hour.

With the new setting, watching 30 hours of content a month would transfer about nine gigabytes of data, which Hastings notes would come under the caps of most Internet plans.

U.S.-based Netflix, which launched in Canada in September, is on track to add its one-millionth Canadian customer this summer.