The federal government plans to remove the financial contribution obligation for online streaming platforms as mandated by the CRTC. Instead, it will introduce government funding to replace these contributions, as stated in a court filing dated July 17 by the attorney general’s office.
However, the Canadian Association of Broadcasters expressed skepticism, noting discrepancies between the government’s statement and what they have previously understood. Kevin Desjardins, the association’s president, emphasized the need for caution and refrained from drawing definitive conclusions based on this communication.
Culture Minister Marc Miller’s office declined to comment on clarifying the government’s position. They also did not confirm if the contribution requirement elimination would be permanent or temporary, stating that a new policy direction is under development.
In early June, the government announced its intention to issue a revised policy directive to the CRTC following the regulator’s decision to raise contributions for major streaming services from five percent to 15 percent of Canadian revenue. Instead of these contributions, the government plans to offer $600 million in annual funding to the industry.
The changes, known colloquially as the “Netflix tax,” were introduced following the enactment of the Liberal government’s Online Streaming Act in 2023. The government intends to release the new policy directive to the CRTC in the coming weeks, as mentioned in the July 17 court document submitted in response to a Federal Court of Appeal challenge by streamers against the CRTC’s regulations.
Despite the shift in policy direction after the U.S. highlighted the Online Streaming Act as a trade concern, the U.S. Trade Representative recently indicated that Canada might not receive full recognition for this adjustment.
Dominic LeBlanc, the Canada-U.S. Trade Minister, is currently in Washington following threats by U.S. President Donald Trump regarding potential tariffs on various Canadian goods.
Prime Minister Mark Carney mentioned that the decision to alter streamer contributions was made two months earlier due to affordability concerns. Industry stakeholders, such as Reynolds Mastin from the Canadian Media Producers Association, stressed the importance of foreign streamers reinvesting a portion of their revenue generated from Canadian audiences back into Canadian content.
Hélène Messier from the Coalition for the Diversity of Cultural Expressions emphasized the need for the government to ensure ongoing funding for the audiovisual and music sectors, estimating at least $200 million annually.
In contrast, NDP MP Heather McPherson criticized the Liberals for scrapping fees for U.S. companies, potentially burdening Canadians to subsidize American tech and media firms. Conservative culture critic Rachael Thomas voiced opposition to the CRTC’s contribution mandates, accusing the Liberals of favoring American streamers and burdening Canadians with a substantial subsidy.