The federal government has declared its plan to remove the financial contribution requirement for streamers mandated by the CRTC and substitute it with government funding, as per a court document. The attorney general’s office stated in a document dated July 17 that the government intends to eliminate the base contribution requirement for streaming services and offer government funding instead.
However, the Canadian Association of Broadcasters has expressed a differing view, noting that the language in the letter does not align with their understanding of the government’s position. The association’s president, Kevin Desjardins, emphasized that it would be premature to draw definitive conclusions based on the communication between the court and one of the respondents.
Culture Minister Marc Miller’s office declined to comment on clarifying the government’s stance. A spokesperson also refrained from confirming whether the contribution requirement elimination would be permanent or temporary. Hermine Landry mentioned in an email that they are in the process of developing a new policy direction and have no further details to share at this time.
In early June, the government announced 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. Instead of these increased contributions, the government proposed providing the industry with $600 million in annual funding.
The contributions, commonly known as the “Netflix tax,” were introduced after the passage of the Liberal government’s Online Streaming Act in 2023. The government plans to release the new policy directive to the CRTC in the upcoming weeks, as stated in the July 17 court document submitted in a Federal Court of Appeal challenge by streamers against the CRTC’s regulations.
Despite a change in direction after the U.S. labeled the Online Streaming Act a trade irritant, the United States Trade Representative recently indicated that Canada might not receive full credit for the decision. Canada-U.S. Trade Minister Dominic LeBlanc is currently in Washington amidst threats of new tariffs on Canadian goods by U.S. President Donald Trump.
Prime Minister Mark Carney emphasized that the decision to end the tax on large streamers for funding Canadian content was made two months ago due to concerns about affordability. Reynolds Mastin, president and CEO of the Canadian Media Producers Association, highlighted the importance of standing up for Canadian stories and ensuring that foreign streamers reinvest a portion of their revenue from Canadian audiences into Canadian content.
Desjardins mentioned that the government’s long-term intention is for streamers operating in Canada to contribute back to the system in some capacity. Hélène Messier from the Coalition for the Diversity of Cultural Expressions stressed the need for the government to ensure a permanent guarantee of funding for the audiovisual and music sectors as previously expected under the contribution requirement, estimating at least $200 million annually.
NDP MP Heather McPherson criticized the government for canceling fees charged to U.S. companies and shifting the burden of subsidizing American tech and media companies onto Canadians. Conservative culture critic Rachael Thomas expressed opposition to the CRTC’s contribution rules for streamers, accusing the Liberals of exempting American streamers from obligations and burdening Canadians with a substantial subsidy.