The Canadian government has revealed plans to remove the financial contribution obligation for online streamers as mandated by the CRTC. Instead of the current requirement, the government intends to substitute it with direct funding. This decision was outlined in a legal document dated July 17, according to the attorney general’s office.
However, the Canadian Association of Broadcasters has expressed skepticism regarding the government’s intentions, stating that the information in the document does not align with what they have been informed. Kevin Desjardins, the association’s president, 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 on whether the elimination of the contribution requirement is permanent or temporary. Hermine Landry, a spokesperson, mentioned that a new policy direction is being developed and no additional information can be shared at this time.
Earlier in June, the government announced its decision to issue a revised policy directive to the CRTC following the regulator’s increase of contributions from large streaming services to 15% of Canadian revenue from the previous 5%. In place of these contributions, the government pledged to allocate $600 million annually to the industry.
The financial contributions, commonly referred to as the “Netflix tax,” were introduced following the enactment of the Liberal government’s Online Streaming Act in 2023. The government indicated that the new policy directive to the CRTC would be released in the upcoming weeks, as mentioned in the July 17 court document submitted as part of a Federal Court of Appeal challenge by streamers.
Despite the shift in policy direction prompted by the U.S. labeling the Online Streaming Act as a trade issue, the United States Trade Representative expressed skepticism about Canada receiving acknowledgment for this step. Canadian-U.S. Trade Minister Dominic LeBlanc is currently in Washington amid threats of new tariffs on Canadian goods by U.S. President Donald Trump.
During a news briefing, Prime Minister Mark Carney clarified that the decision to eliminate the contribution requirement for streamers was made two months earlier, citing concerns about affordability. Reynolds Mastin, president of the Canadian Media Producers Association, emphasized the importance of foreign streamers reinvesting a portion of their earnings from Canadian audiences back into Canadian content.
Hélène Messier from the Coalition for the Diversity of Cultural Expressions stressed the need for a permanent guarantee of funding for the audiovisual and music sectors, estimating an annual requirement of at least $200 million. NDP MP Heather McPherson criticized the government for canceling fees for U.S. companies and placing the burden on Canadians to subsidize American tech and media firms.
Conservative culture critic Rachael Thomas voiced opposition to the CRTC’s contribution rules for streamers, accusing the Liberals of exempting American companies from financial obligations while burdening Canadians with a substantial subsidy.