The federal government plans to remove the financial contribution obligation for online streaming platforms established by the CRTC and intends to substitute it with government funding, according to a court filing. The attorney general’s office stated in a document dated July 17 that the government aims to eliminate the current contribution requirement on streaming services and introduce government financing as an alternative.
However, the Canadian Association of Broadcasters has expressed conflicting views, noting a discrepancy between the letter’s content and the government’s actual discussions. Kevin Desjardins, the association’s president, emphasized caution in drawing definitive conclusions based on this correspondence between the court and a respondent.
Culture Minister Marc Miller’s office declined to provide further clarity on the government’s position. In June, the government announced plans to issue a new policy directive to the CRTC following the regulator’s decision to raise contributions for major streaming services from five percent to fifteen percent of Canadian revenue. Additionally, the government disclosed its intention to allocate $600 million in annual funding to the industry.
The contributions, dubbed the “Netflix tax,” were initiated following the enactment of the Liberal government’s Online Streaming Act in 2023. The court document from July 17 indicated that the government would publish the new policy directive to the CRTC in the upcoming weeks as part of a Federal Court of Appeal challenge by streamers against the CRTC’s regulations.
Despite the U.S. branding the Online Streaming Act as a trade irritant, prompting Ottawa to change its stance, the United States Trade Representative recently remarked that Canada may not receive full recognition for this adjustment. Canada-U.S. Trade Minister Dominic LeBlanc’s visit to Washington coincided with threats from U.S. President Donald Trump of imposing new tariffs on various Canadian goods.
During a news conference, Prime Minister Mark Carney clarified that the decision to revise streamer contributions was made two months earlier due to affordability concerns. Reynolds Mastin, president and CEO of the Canadian Media Producers Association, emphasized the importance of foreign streamers reinvesting a portion of their Canadian revenue into local content.
Hélène Messier from the Coalition for the Diversity of Cultural Expressions stressed the necessity for sustainable funding in the audiovisual and music sectors. NDP MP Heather McPherson criticized the government for eliminating fees for U.S. companies and jeopardizing Canadian media’s future, while Conservative culture critic Rachael Thomas opposed the CRTC’s contribution rules, accusing the Liberals of burdening Canadians with a significant subsidy for American streamers.