The federal government has stated in a court filing that it intends to do away with the financial contribution obligation for streamers imposed by the CRTC and replace it with government funding. The attorney general’s office conveyed this information in a document dated July 17, indicating the government’s plan to eliminate the base contribution requirement on streaming services and substitute it with government funding.
However, the Canadian Association of Broadcasters has expressed skepticism, stating that the message in the document 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 from this communication between the court and a respondent.
Culture Minister Marc Miller’s office declined to provide further clarity on the government’s stance when approached for comments. The spokesperson did not confirm whether the government intends to permanently or temporarily eliminate the contribution requirement, reiterating that a new policy direction is being developed and no additional information is available at this time.
Earlier in June, the government announced its intention to issue a new policy directive to the CRTC following the regulator’s decision to increase contributions from large streaming services from five percent to 15 percent of Canadian revenue. Alongside this change, the government pledged to allocate $600 million in annual funding to the industry.
The contributions, dubbed the “Netflix tax,” were introduced following the enactment of the Liberal government’s Online Streaming Act in 2023. The court document from July 17 affirmed that the government would release the new policy directive to the CRTC in the forthcoming weeks, as part of a Federal Court of Appeal challenge by streamers against the CRTC’s regulations.
Despite the shift in policy direction attributed to pressure from the U.S., the United States Trade Representative remarked that Canada might not receive adequate recognition for this move. This development coincided with Canada-U.S. Trade Minister Dominic LeBlanc’s visit to Washington amid threats of new tariffs on Canadian goods by U.S. President Donald Trump.
During a news conference, Prime Minister Mark Carney clarified that the decision to alter streamer contributions had been made two months prior, emphasizing affordability concerns as the driving factor behind the government’s decision. Reynolds Mastin, president and CEO of the Canadian Media Producers Association, stressed the importance of foreign streamers reinvesting a portion of their revenue from Canadian audiences into Canadian content to support the local industry.
Desjardins reiterated the expectation for streamers operating in Canada to contribute back to the system, noting the necessity for a guaranteed funding mechanism to sustain the cultural sectors adequately. Additionally, NDP MP Heather McPherson criticized the government’s move as favoring U.S. companies and posing a threat to Canadian media’s future, while Conservative culture critic Rachael Thomas voiced opposition to the CRTC’s contribution rules and criticized the government for subsidizing American streamers at the expense of Canadian taxpayers.