The Canadian government will instruct the broadcast and telecommunications regulator to reconsider its recent decision to triple the financial contributions that streaming services such as Netflix must allocate to Canadian content. The Heritage Department expressed concerns that the Canadian Radio-television and Telecommunications Commission (CRTC)’s new requirements may lead to increased costs for streamers, potentially impacting Canadian consumers with higher prices.
Prime Minister Mark Carney emphasized the importance of not burdening Canadians with additional costs during a meeting with his cabinet. Additionally, the government announced a $600 million investment to offer immediate support and stability to Canada’s audio and audiovisual sectors, ensuring that the country’s culture remains accessible and affordable for all citizens.
The Online Streaming Act, passed in 2023 under the previous Trudeau government, empowered the CRTC to mandate that all streaming companies generating at least $25 million in annual Canadian revenue contribute a portion of their earnings to support the production of Canadian content, including movies, TV shows, and local news. Initially set at five percent, the CRTC recently raised this contribution requirement to 15 percent.
In response to the situation, Ottawa will issue a revised policy directive to the CRTC to adjust the implementation of the Online Streaming Act. The law has been flagged as a trade concern by the U.S. as both countries renegotiate their free trade agreement.
The Motion Picture Association, representing U.S. streamers, urged the cabinet to reconsider its stance, while U.S. Ambassador to Canada Pete Hoekstra applauded the decision to review the contribution hike, emphasizing the importance of a fair and supportive framework for American firms investing in Canada’s creative industry.
Although the Broadcasting Act restricts the cabinet from directly overturning the regulator’s decisions, it can provide direction to the CRTC on the Act’s general implementation. The CRTC confirmed its awareness of the government’s plan to adjust the Online Streaming Act’s implementation and stated its readiness to review any new policy directions.
Minister of Identity and Culture Marc Miller acknowledged the U.S. Trade Representative’s concerns regarding the Online Streaming Act and highlighted the financial challenges faced by the industry. The government is currently evaluating the specifics of its directive to the CRTC, with Miller emphasizing that platforms will still be obligated to contribute to Canadian content.
Miller clarified that the industry’s financial support remains essential, indicating that the review’s timing during U.S. trade negotiations was coincidental, as stated during an interview on CBC’s Power & Politics.
