The federal government has revealed its plan to replace the financial contribution requirement for streamers established by the CRTC with government funding, according to a court document. The attorney general’s office stated that the government aims to eliminate the base contribution requirement for streaming services and substitute it with government funding in the document dated July 17.
However, the Canadian Association of Broadcasters expressed a different perspective, noting that the content of the letter doesn’t align with what they have heard from the government. Kevin Desjardins, the association’s president, emphasized the need for caution before drawing definitive conclusions from the communication between the court and one of the respondents.
Culture Minister Marc Miller’s office declined to comment on clarifying the government’s position. A spokesperson also remained silent when questioned about whether the government’s intention is to permanently or temporarily remove the contribution requirement. Hermine Landry mentioned that they are currently developing a new policy direction and have nothing more to disclose at this time.
In early June, the government announced its decision to issue a new policy directive to the CRTC following the regulator’s increase in contributions for large streaming services from five percent to 15 percent of Canadian revenue. At that time, the government also pledged to provide the industry with $600 million in annual funding. These contributions, commonly referred to as the “Netflix tax,” were introduced after 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. This development occurred within the context of a Federal Court of Appeal challenge against the CRTC’s regulations by streamers.
Although the U.S. flagged the Online Streaming Act as a trade issue, prompting Ottawa to alter its course, the United States Trade Representative indicated that Canada might not receive full recognition for this adjustment. Canada-U.S. Trade Minister Dominic LeBlanc’s visit to Washington coincided with U.S. President Donald Trump’s threats of imposing new tariffs on various Canadian goods.
During a news conference, Prime Minister Mark Carney disclosed that the decision regarding streamer contributions had been made two months earlier due to concerns about affordability. Reynolds Mastin, president and CEO of the Canadian Media Producers Association, emphasized the importance of continuing to support Canadian content by requiring foreign streamers to reinvest a portion of their revenue from Canadian audiences back into Canadian productions.
Desjardins highlighted the apparent long-term objective of having streamers operating in Canada contribute to the system, while Hélène Messier stressed the necessity for the government to ensure consistent funding for the audiovisual and music sectors, estimated at no less than $200 million annually. NDP MP Heather McPherson criticized the Liberal government for canceling fees charged to U.S. companies, potentially jeopardizing the future of Canadian media and content. Conservative culture critic Rachael Thomas voiced opposition to the CRTC’s contribution rules, accusing the Liberals of letting American streamers evade responsibilities at the expense of Canadian taxpayers.