The federal government plans to remove the financial contribution requirement for online streamers as set by the CRTC and intends to substitute it with government funding, according to a court document. The Attorney General’s office stated in a document dated July 17 that the government aims to scrap the base contribution requirement for streaming services and introduce government funding in its place.
The Canadian Association of Broadcasters has expressed conflicting viewpoints, stating that the language in the letter does not align with their understanding of the government’s position. Kevin Desjardins, the association’s president, emphasized that it would be premature to draw definitive conclusions based on the administrative communication between the court and one of the respondents.
Culture Minister Marc Miller’s office declined to comment on clarifying the government’s position. When asked whether the government plans to permanently or temporarily eliminate the contribution requirement, a spokesperson mentioned that they are developing a new policy direction and have no further details to share at this time.
In early June, the government announced its intention to issue a new policy directive to the CRTC following the regulator’s decision to increase contributions for major streaming services from five percent to fifteen percent of Canadian revenue. Instead of these contributions, the government stated it would provide the industry with $600 million in annual funding.
The financial contributions, often referred to as the “Netflix tax,” were introduced following the passage of the Liberal government’s Online Streaming Act in 2023. The court document from July 17 mentioned that the government would release 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.
While the U.S. identified the Online Streaming Act as a trade issue, recent statements from the United States Trade Representative indicated that Canada might not receive full acknowledgment for eliminating the tax on large streamers to support Canadian content.
Canadian-U.S. Trade Minister Dominic LeBlanc is currently in Washington after U.S. President Donald Trump threatened new tariffs on various Canadian goods. Prime Minister Mark Carney emphasized that the decision to change streamer contributions was made two months prior, citing concerns about affordability and the need for a different approach to supporting Canadian culture.
Reynolds Mastin, president and CEO of the Canadian Media Producers Association, stressed the importance of foreign streamers investing a portion of their earnings from Canadian audiences back into Canadian content. NDP MP Heather McPherson criticized the government for canceling fees on U.S. companies and potentially jeopardizing the future of Canadian media.
Conservative culture critic Rachael Thomas stated her party’s opposition to the CRTC’s contribution rules for streamers and criticized the government for subsidizing American streamers with a substantial $600 million fund.