The Canadian government is planning to remove the financial contribution requirement for streamers established by the CRTC and replace it with government funding, according to a court document dated July 17. The attorney general’s office stated that the intention is to do away with the base contribution obligation on streaming services and substitute it with government funding.
However, the Canadian Association of Broadcasters has expressed differing views, stating that the content of the letter does not align with their understanding of the government’s position. Kevin Desjardins, the association’s president, emphasized caution in drawing definitive conclusions based on this communication between the court and the respondents.
Culture Minister Marc Miller’s office declined to comment on clarifying the government’s stance, and a spokesperson did not address whether the elimination of the contribution requirement would be permanent or temporary.
In early June, the government announced its plan to issue a new policy directive to the CRTC after the regulator raised contributions for major streaming services from 5% to 15% of Canadian revenue. Concurrently, the government committed to providing the industry with $600 million in annual funding.
The contributions, dubbed the “Netflix tax,” were introduced following the passage of the Liberal government’s Online Streaming Act in 2023.
The court document from July 17 indicated that the new policy directive would be released to the CRTC in the upcoming weeks. The document was submitted as part of a Federal Court of Appeal challenge against the CRTC’s regulations by streamers.
Despite the change in direction following pressure from the U.S., which identified the Online Streaming Act as a trade issue, the U.S. Trade Representative mentioned that Canada may not receive full credit for this decision.
Dominic LeBlanc, the Canada-U.S. Trade Minister, is currently in Washington amid threats of new tariffs on various Canadian goods by President Donald Trump.
Prime Minister Mark Carney emphasized that the decision to alter streamer contributions was made two months prior due to concerns about affordability. He highlighted the government’s investment in culture and the directive provided in this regard.
Reynolds Mastin, president and CEO of the Canadian Media Producers Association, stressed the importance of foreign streamers reinvesting a portion of their Canadian revenue back into Canadian content to support local stories.
Various political figures, including NDP MP Heather McPherson and Conservative culture critic Rachael Thomas, have expressed contrasting views on the government’s decision to eliminate contribution requirements for streamers and provide funding instead.