The federal government has stated in a court filing that it plans to remove the financial contribution requirement for online streamers established by the CRTC and intends to substitute it with government funding. The attorney general’s office conveyed this information in a document dated July 17, indicating a shift in the funding mechanism for streaming services.
However, the Canadian Association of Broadcasters has expressed skepticism regarding this announcement, highlighting a discrepancy between the government’s message and what they have previously understood. Kevin Desjardins, the president of the association, emphasized the need for caution in interpreting the communication between the court and the respondents.
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 had earlier indicated its intention to issue a new policy directive to the CRTC following the regulator’s decision to raise contributions for major streaming platforms from five percent to 15 percent of Canadian revenue.
The funding model, often dubbed the “Netflix tax,” was implemented after the passage of the Online Streaming Act by the Liberal government in 2023. The government had initially pledged $600 million in annual funding for the industry as an alternative to these contributions.
The court document from July 17 outlined the government’s plan to release the new policy directive to the CRTC in the near future. This development occurred amidst pressure from the U.S., which had identified the Online Streaming Act as a trade concern. Despite this adjustment, the United States Trade Representative remarked that Canada might not receive full recognition for this policy shift.
Canadian and U.S. Trade Minister Dominic LeBlanc visited Washington following threats of new tariffs on Canadian goods by U.S. President Donald Trump. The decision to alter the contribution requirements for streamers was confirmed by Prime Minister Mark Carney, citing affordability as a primary concern for the government.
Reynolds Mastin, CEO of the Canadian Media Producers Association, emphasized the importance of upholding Canadian content standards and ensuring that foreign streamers reinvest in the Canadian industry. The government faces calls to secure consistent funding for cultural sectors, as outlined by various industry representatives.
Opposition parties have criticized the government’s approach, with NDP MP Heather McPherson accusing the Liberals of favoring U.S. companies over Canadian interests. Conservative culture critic Rachael Thomas raised concerns about the impact of the government’s decision on the Canadian media landscape, highlighting the shift towards subsidizing foreign tech and media giants.