The federal government announced its plan to remove the financial contribution requirement for online streaming services, as mandated by the CRTC, and replace it with government funding. This decision, outlined in a court document dated July 17, aims to eliminate the base contribution obligation for streamers and substitute it with financial support from the government.
However, the Canadian Association of Broadcasters expressed skepticism about the government’s intentions. Kevin Desjardins, the association’s president, stated that the content of the document did not align with previous communications from the government. He cautioned against drawing definitive conclusions based on this correspondence.
Culture Minister Marc Miller’s office declined to provide further details or clarify whether the elimination of the contribution requirement would be permanent or temporary. The government previously announced its intention to issue a new policy directive to the CRTC, following the regulator’s decision to raise contributions for major streaming services to 15% of Canadian revenue from the initial 5%.
The new policy directive, which follows the passage of the Online Streaming Act in 2023, seeks to replace the contributions, known colloquially as the “Netflix tax,” with $600 million in annual funding for the industry. The government plans to release the policy directive to the CRTC in the near future, as indicated in the July 17 document submitted to the Federal Court of Appeal.
While the U.S. had identified the Online Streaming Act as a trade concern, leading to a shift in Ottawa’s approach, the United States Trade Representative remarked that Canada might not receive full recognition for this change. Trade Minister Dominic LeBlanc’s visit to Washington coincided with President Donald Trump’s threats of new tariffs on Canadian goods.
Prime Minister Mark Carney emphasized that the decision to alter streamer contributions had been made two months prior due to affordability concerns. He highlighted the importance of investing in Canadian culture and providing appropriate direction in this regard. Reynolds Mastin of the Canadian Media Producers Association stressed the need for foreign streamers to reinvest revenue generated from Canadian audiences into Canadian content.
Various stakeholders, including NDP MP Heather McPherson and Conservative culture critic Rachael Thomas, expressed differing opinions on the government’s decision. McPherson criticized the move as subsidizing U.S. tech and media companies at the expense of Canadian media, while Thomas opposed the CRTC’s contribution rules and the government’s subsidy approach.
