The federal government has declared its plan to replace the financial contribution requirement for streamers, as mandated by the CRTC, with government funding, according to a court document dated July 17. The attorney general’s office conveyed that the government’s intention is to scrap the base contribution mandate on streaming services and introduce government funding in its place.
The Canadian Association of Broadcasters expressed skepticism regarding the government’s stance, stating that the communication they received does not align with their understanding of the situation. Kevin Desjardins, the association’s president, emphasized the need for caution in drawing definitive conclusions from the correspondence between the court and one of the respondents.
Culture Minister Marc Miller’s office declined to offer further details on the government’s position when pressed for clarification. The spokesperson refrained from confirming whether the contribution requirement would be eliminated permanently or temporarily, reiterating that a new policy direction is currently under development.
In early June, the government announced its intent to issue a revised policy directive to the CRTC following the regulator’s decision to increase contributions for major streaming services from five percent to 15 percent of Canadian revenue. Concurrently, the government disclosed plans to allocate $600 million in annual funding to the industry.
The contributions, dubbed the “Netflix tax,” were introduced subsequent to the passage of the Liberal government’s Online Streaming Act in 2023. The court document dated July 17 indicated that the new policy directive would be published to the CRTC in the coming weeks as part of the ongoing Federal Court of Appeal challenge by streamers against the CRTC’s regulations.
Despite the initial resistance, the government altered its course after the U.S. flagged the Online Streaming Act as a trade concern. The U.S. Trade Representative recently remarked that Canada would not receive due acknowledgment for this adjustment.
As discussions unfold between Canada and the U.S., Canadian Media Producers Association’s President and CEO, Reynolds Mastin, emphasized the importance of upholding Canadian content requirements for foreign streamers operating in Canada. Mastin stressed the necessity of reinvesting a portion of the revenue generated from Canadian audiences back into Canadian content.
Various stakeholders, including the Coalition for the Diversity of Cultural Expressions and political representatives, have expressed divergent views on the government’s decision, highlighting concerns over the impact on Canadian media and cultural sectors.
