The federal government announced in a court document that it intends to remove the financial contribution obligation for streamers established by the CRTC. Instead, the government plans to substitute it with direct government funding. The attorney general’s office stated on July 17 that the government aims to eliminate the base contribution requirement for streaming services and introduce government funding as a replacement.
However, the Canadian Association of Broadcasters expressed a different perspective, noting discrepancies between the letter’s content and the government’s actual communication. Kevin Desjardins, the association’s president, emphasized the need for caution in drawing conclusions from the administrative correspondence between the court and a respondent.
Culture Minister Marc Miller’s office declined to comment when asked for clarification on the government’s position. Hermine Landry, a spokesperson, also refrained from confirming whether the contribution requirement would be permanently or temporarily eliminated, stating that a new policy direction is in development with no additional information available at present.
Earlier in June, the government disclosed its intention to issue a new policy directive to the CRTC following the regulator’s decision to raise contributions for large streaming services from five percent to 15 percent of Canadian revenue. In lieu of these contributions, the government pledged to provide the industry with $600 million annually.
The contributions, known as the “Netflix tax,” were established after the enactment of the Liberal government’s Online Streaming Act in 2023. The July 17 court document revealed that the new policy directive to the CRTC would be released in the upcoming weeks, submitted 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 concern, the United States Trade Representative recently indicated that Canada might not receive recognition for eliminating the tax on large streamers. Canada-U.S. Trade Minister Dominic LeBlanc engaged in discussions in Washington, prompted by U.S. President Donald Trump’s threat of imposing tariffs on various Canadian goods.
During a news conference, Prime Minister Mark Carney emphasized that the decision to alter streamer contributions was made months ago due to affordability concerns. Reynolds Mastin, president and CEO of the Canadian Media Producers Association, stressed the importance of foreign streamers reinvesting a portion of their revenues from Canadian audiences into Canadian content.
Desjardins highlighted the government’s long-term intention for streamers in Canada to contribute back into the system, and Messier from the Coalition for the Diversity of Cultural Expressions emphasized the need for sustainable funding aligned with online streaming service revenues. NDP MP Heather McPherson criticized the government for canceling fees for U.S. companies, risking the competitiveness of Canadian media, while Conservative culture critic Rachael Thomas opposed the CRTC’s contribution rules on streamers, accusing the Liberals of burdening Canadians with a substantial subsidy.
The developments surrounding the government’s decision to change the financial contribution model for streamers continue to provoke discussions and concerns from various stakeholders.
