The Canadian government has announced plans to request the broadcasting and telecommunications regulator to reconsider its decision to increase the financial contributions that streaming services such as Netflix must make towards Canadian content.
The Department of Heritage expressed concerns that the new requirements set by the Canadian Radio-television and Telecommunications Commission (CRTC) could potentially lead to higher costs for Canadian consumers. Prime Minister Mark Carney emphasized the importance of not burdening Canadians with increased expenses during a press briefing following a meeting with his cabinet.
In response to the situation, the government revealed a $600 million investment aimed at providing immediate support to Canada’s audio and audiovisual sectors. This move is intended to ensure the accessibility and affordability of Canadian culture for all citizens.
The Online Streaming Act, enacted in 2023 under the previous Trudeau administration, empowered the CRTC to mandate that streaming companies generating over $25 million in annual revenue in Canada allocate a portion of their earnings towards fostering Canadian content production, including films, television shows, and local news.
Initially, the CRTC had set the baseline contribution at five percent of a company’s Canadian revenue but escalated it to 15 percent recently. Consequently, Ottawa intends to issue a new policy direction to the CRTC to reassess the implementation of the Online Streaming Act.
The Motion Picture Association, representing U.S. streaming platforms, urged the cabinet to reconsider its stance, while U.S. Ambassador to Canada Pete Hoekstra welcomed the decision to review the contribution hike.
Although the cabinet lacks the authority to directly overturn the regulator’s decisions under the Broadcasting Act, it can provide directives to the CRTC on the broader implementation of the law. The CRTC acknowledged the upcoming directive from the government and committed to reviewing and adhering to any new policy directions.
Minister of Identity and Culture Marc Miller acknowledged the industry’s financial struggles and the need for assistance, especially amid ongoing trade negotiations with the U.S. He emphasized that while the government is finalizing its directive to the CRTC, platforms will still be expected to contribute towards Canadian content creation.
Miller clarified that the obligation to support the sector remains intact, despite the ongoing review process coinciding with trade discussions with the U.S.
