The federal government revealed its plan to do away with the financial obligations imposed on streamers by the CRTC, opting instead for government funding, as stated in a court document dated July 17. The attorney general’s office conveyed that the government’s aim is to eliminate the base contribution requirement for streaming services and substitute it with government funding.
However, the Canadian Association of Broadcasters expressed skepticism, noting discrepancies between the government’s communication and their understanding. Kevin Desjardins, the association’s president, emphasized the need for caution in drawing conclusions from the court’s correspondence.
Culture Minister Marc Miller’s office declined to comment on clarifying the government’s position, leaving unanswered questions about the permanency or temporariness of the contribution requirement elimination. The government announced in early June its intention to issue a new policy directive to the CRTC following the regulator’s decision to increase contributions from large streaming services and allocate $600 million annually instead.
The contributions, dubbed the “Netflix tax,” were established after the Liberal government passed the Online Streaming Act in 2023. The government plans to release the new policy directive to the CRTC soon, as outlined in the July 17 court document submitted in a Federal Court of Appeal challenge by streamers.
Despite a change in direction prompted by U.S. objections to the Online Streaming Act, the United States Trade Representative recently commented that Canada may not receive full credit for the move. Canada-U.S. Trade Minister Dominic LeBlanc’s visit to Washington coincided with threats of new tariffs on Canadian goods by U.S. President Donald Trump.
Prime Minister Mark Carney clarified that the decision to eliminate streamer contributions was made two months ago, emphasizing affordability concerns as the primary driver for the policy change. Industry stakeholders, such as the Canadian Media Producers Association, are awaiting further details of the policy direction to ensure continued support for Canadian content.
The government’s commitment to ensuring a fair contribution from streamers operating in Canada was echoed by various groups, emphasizing the need for sustainable funding aligned with the revenue growth of online streaming services. Political reactions to the government’s decision varied, with some expressing concerns about subsidizing foreign tech and media companies at the expense of Canadian media.