The federal government plans to remove the financial contribution obligation for online streamers established by the CRTC and will introduce government funding instead, as detailed in a legal document. The attorney general’s office conveyed this intention in a document dated July 17, stating that the government aims to eliminate the base contribution requirement for streaming services and substitute it with government funding.
However, the Canadian Association of Broadcasters expressed reservations about this information, indicating a discrepancy between the government’s message and what they have perceived. The association’s president, Kevin Desjardins, emphasized caution in drawing definitive conclusions from the court communication between the government and one of the respondents.
Culture Minister Marc Miller’s office declined to elaborate on the government’s position when asked for clarification. A spokesperson did not respond to inquiries regarding whether the elimination of the contribution requirement would be permanent or temporary. Instead, Hermine Landry reiterated that a new policy direction is being developed, with no further details available at present.
The government announced in early June its intention to issue a new policy directive to the CRTC after the regulator increased contributions from large streaming services to 15% of Canadian revenue, up from the previous 5%. In lieu of these contributions, the government pledged to provide the industry with $600 million in annual funding, following the passage of the Online Streaming Act in 2023.
The term “Netflix tax” was coined for these contributions, which stirred controversy and led to the government’s reassessment of the situation. The court document from July 17 disclosed that the new policy directive to the CRTC would be made public in the following weeks as part of the ongoing Federal Court of Appeal challenge by streamers against the CRTC’s regulations.
While the U.S. viewed the Online Streaming Act as a trade concern, recent statements from the United States Trade Representative suggested that Canada may not receive full recognition for its actions in this regard. Amidst these developments, Canada-U.S. Trade Minister Dominic LeBlanc engaged in discussions in Washington following threats of new tariffs by U.S. President Donald Trump on various Canadian goods.
Prime Minister Mark Carney emphasized that the decision to alter streamer contributions had been made two months prior, citing affordability concerns as the primary motivation. The Canadian Media Producers Association echoed the importance of supporting Canadian content and emphasized the need for foreign streamers to reinvest a portion of their Canadian revenue back into local content creation.
Members of Parliament from various parties expressed differing views on the matter, with some criticizing the government’s approach, while others advocated for standing up for Canadian stories and ensuring fair contributions from online streaming platforms.