The Canadian government is set to request the broadcasting and telecommunications regulator to reconsider its recent decision to triple the contributions that streaming services such as Netflix must make towards Canadian content.
According to the Heritage Department, the Canadian Radio-television and Telecommunications Commission (CRTC)’s increased requirements could lead to higher costs for Canadian consumers. Prime Minister Mark Carney emphasized the importance of not raising costs for Canadians during a meeting with the cabinet.
To support the audio and audiovisual sectors in Canada and ensure the accessibility and affordability of culture for all Canadians, the government announced a $600 million investment.
The Online Streaming Act, enacted in 2023 during the previous Trudeau administration, empowered the CRTC to mandate that streaming companies generating at least $25 million in annual Canadian revenue allocate a portion towards Canadian content creation, including movies, television, and local news.
Initially, the CRTC set the contribution at five percent of a company’s Canadian revenue, but later increased it to 15 percent last month. Ottawa will issue a new policy direction to the CRTC for adjusting the implementation of the Online Streaming Act.
The Motion Picture Association, representing U.S. streamers, had urged the cabinet to reconsider its stance. U.S. Ambassador to Canada Pete Hoekstra welcomed the decision to review the contribution hike, stating that it facilitates American firms’ investments in Canada’s creative sector.
While the Broadcasting Act prohibits the cabinet from directly overturning the regulator’s decisions, it can provide broad directives to the CRTC for implementing the act. The CRTC confirmed its awareness of the government’s plan to direct adjustments to the implementation of the Online Streaming Act.
Minister of Identity and Culture Marc Miller acknowledged the U.S. Trade Representative’s concerns about the Online Streaming Act but highlighted the industry’s financial struggles and the need for assistance. Miller stated that the government is currently reviewing the specifics of its new directive to the CRTC, emphasizing that platforms will still be required to contribute to Canadian content.
Miller clarified that the responsibility to support the sector remains, despite the ongoing review coinciding with U.S. trade negotiations.