The federal government has stated in a court document that it intends to remove the financial contribution obligation for streamers imposed by the CRTC and substitute it with government funding. The attorney general’s office mentioned in a document dated July 17 that the government plans to eliminate the base contribution requirement on streaming services and replace it with government funding.
However, the Canadian Association of Broadcasters expressed a different understanding of the situation. Kevin Desjardins, the association’s president, stated that the language in the letter does not match what they have heard from the government. He emphasized the need for caution in drawing conclusions from this communication between the court and one of the respondents.
Culture Minister Marc Miller’s office declined to provide further clarification on the government’s position. When asked about whether the contribution requirement elimination is permanent or temporary, a spokesperson responded that they are currently developing a new policy direction and have no additional details to share at this time.
In early June, the government announced its intention to issue a new policy directive to the CRTC after the regulator raised contributions for large streaming services from five percent to 15 percent of Canadian revenue. The government also revealed plans to allocate $600 million annually to the industry.
The contributions, commonly known as the “Netflix tax,” were introduced following the passing of the Liberal government’s Online Streaming Act in 2023. The July 17 court document mentioned that the government would release the new policy directive to the CRTC in the upcoming weeks as part of a Federal Court of Appeal challenge by streamers against the CRTC’s regulations.
Despite the initial stance, the government altered its course after the U.S. identified the Online Streaming Act as a trade irritant. The United States Trade Representative recently stated that Canada might not receive full recognition for this decision.
Reynolds Mastin, president and CEO of the Canadian Media Producers Association, emphasized the importance of foreign streamers investing a portion of their revenue back into Canadian content. He highlighted the necessity for the government to continue supporting Canadian stories.
In response to the government’s actions, NDP MP Heather McPherson criticized the Liberals for canceling fees charged to U.S. companies and shifting the burden onto Canadians. Conservative culture critic Rachael Thomas mentioned that her party opposes the CRTC’s rules on streamer contributions, accusing the Liberals of letting American streamers off the hook and placing the financial burden on Canadians.