The federal government is overriding a CRTC decision that would have forced major streaming platforms to pay a 15% levy to fund Canadian content, citing concerns that the costs would have been passed straight to consumers.
The CRTC had bumped the contribution rate from 5% to 15% under the Online Streaming Act, targeting foreign (well, mainly U.S.) streamers like Netflix, Apple TV+, Paramount+, and Prime Video. The backlash was quick, with Canadians already squeezed by the cost of living not thrilled about the prospect of higher subscription bills.
Instead of letting those rules stand, Ottawa is putting $600 million in taxpayer funding directly into the audio and audiovisual sectors. The money is meant to support local news, French-language productions, and Canadian creators, essentially filling the hole that the CRTC tax would have generated without making streaming more expensive.
It’s a surprise announcement considering the feds said last week they would not be able to intervene with the CRTC decision. The Motion Picture Association, which represents big studios in Hollywood, called the Online Streaming Act illegal and was ready to fight it as it was said to have violated USMCA agreement between North America.
The government says it is also rewriting how the Online Streaming Act gets implemented, with a new approach focused on flexibility for platforms, consumer choice, and keeping content affordable. Alrighty then.
“Canadians should be able to see themselves in the films and series they watch and hear their lives reflected in the artists they listen to,” said Marc Miller, Minister of Canadian Identity and Culture, in a statement on Tuesday. “That’s why we are investing to support the audiovisual and audio sectors now, while bringing necessary stability as we develop new directions that will ensure Canadian content remains affordable and that our stories continue to shape our identity and how the world sees us.”
Of course, there will be consultations with the cultural sector before the government finalizes how the funding gets distributed, it said.
The timing isn’t accidental either. With CUSMA renegotiations on the horizon, the last thing Ottawa wanted was a fight with Washington over a tax that directly targeted American streaming giants like Netflix, Apple TV+, and Prime Video. Killing it now was as much about keeping the trade relationship smooth as it was about protecting Canadian wallets. Well, this time taxpayers are footing the bill instead, regardless.
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