The federal government has revealed plans to discontinue the financial contribution requirement for streamers imposed by the CRTC. Instead, the government intends to substitute this requirement with direct government funding, as outlined in a court document dated July 17. While the Canadian Association of Broadcasters has expressed skepticism about this change, stating that it contradicts previous information, the government has not provided further clarification.
Culture Minister Marc Miller’s office declined to comment on whether the contribution requirement elimination is permanent or temporary, emphasizing the ongoing development of a new policy direction announced in June. This decision follows the CRTC’s decision to raise contributions for large streaming services from five percent to 15 percent of Canadian revenue. The government aims to allocate $600 million in annual funding to the industry in place of these contributions, which were dubbed the “Netflix tax” after the passage of the Online Streaming Act in 2023.
The court document from July 17 also mentioned the government’s intention to issue a new policy directive to the CRTC shortly, following a Federal Court of Appeal challenge by streamers against the CRTC’s regulations. Despite altering its approach due to pressure from the U.S., the United States Trade Representative indicated that Canada may not receive full recognition for this move.
Prime Minister Mark Carney stated that the decision to end streamer contributions was made two months ago, emphasizing affordability as the primary concern. Industry stakeholders, including Reynolds Mastin from the Canadian Media Producers Association, highlighted the importance of foreign streamers investing in Canadian content. However, critics such as NDP MP Heather McPherson and Conservative culture critic Rachael Thomas have raised concerns about the government’s decision to shift from contributions to direct funding.