Numerous organizations within Canada’s cultural sector are urging Prime Minister Mark Carney to retain regulations that mandate foreign streaming services, such as Netflix, to contribute financially to Canadian content.
The government has committed to replacing the 15 percent tax imposed on the Canadian earnings of major streamers with direct funding, but these organizations argue that this is inadequate.
In a letter addressed to Carney and endorsed by 50 organizations, the groups express concern that the promised annual funding, unlike a contribution system regulated by the CRTC, is subject to changes through the federal budget.
“While the government’s $600 million-per-year commitment is appreciated and welcomed, it cannot replace the need for stable, legally binding contribution requirements. Discretionary funding is vulnerable to budget constraints and external political influences, whereas a regulated contribution framework is not,” states the letter.
Among the signatories are the Canadian Media Producers Association, which advocates for independent producers, along with unions representing actors, writers, and directors in Canada, as well as various film festivals.
Following the CRTC’s decision to raise the contribution rate for large streaming platforms to 15 percent, the government announced in June its intention to introduce a new policy directive, opting instead for direct annual funding for the industry.
Subsequently, the government indicated in a court filing that it would “remove” the financial contribution obligation for streaming services.
The letter, which is also addressed to Culture Minister Marc Miller, highlights that the government’s June declaration has “created significant uncertainty within the production sector.”
When asked how Canadians should interpret Ottawa’s decision to eliminate the tax on large streaming services to fund Canadian content, Prime Minister Mark Carney stated that “we made that decision with a focus on affordability right out of the gate” and that it had been made “two months ago.”
The letter asserts that the 15 percent contribution requirement “should serve as an appropriate standard for the new regulatory framework and must not be diminished by replacing the base contribution mechanism. Keeping this threshold is both fair and reasonable.”
Although Ottawa altered its approach to streaming regulations after the U.S. identified the enabling legislation as a trade issue, the U.S. trade representative has remarked that Canada wouldn’t “really gain credit” for this change.
