Ottawa hits pause button on CRTC streaming tax, orders review
· Toronto Sun
OTTAWA — Fearing the move could trigger a massive price spike, the federal government is directing Canada’s broadcast regulator to review its contentious plan to regulate and tax foreign streaming platforms.
Canada’s Identity and Culture Minister Marc Miller made the announcement on Wednesday, a reaction to the contentious May 21 decision by the Canadian Radio-television and Telecommunications Commissions (CRTC) requiring streaming giants such as Spotify and Netflix to spend some of their Canadian-sourced revenue to acquire or produce Canadian programming.
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“The CRTC’s new requirements would impose new costs on the companies providing these services, which could ultimately fall on Canadian consumers through higher prices,” read a statement released Wednesday by Canadian Heritage.
“At a time when Canadians face cost-of-living pressure, now is not the time to make culture and entertainment more expensive.”
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Tax a Trump trade irritant
This move follows years of pushback from 2023’s Online Streaming Act, which quickly became a flashpoint in the ongoing trade war between Canada and the Donald Trump White House — which views the legislation as a barrier to trade rather than a means to preserve Canadian culture.
The situation boiled over on May 21 when the CRTC ruled that non-Canadian streaming platforms making more than $25 million in annual revenue from Canadian customers would face a 15% Canadian Programming Expenditure (CPE) requirement — up from the original 5%.
The move to force steaming giants to fund Canadian productions is the subject of a court challenge being led by the Motion Picture Association – Canada, an Ottawa-based lobby group representing major movie studios and streaming platforms in Canada, arguing the Online Streaming Act violates CUSMA.
“American studios and streaming services are already the top foreign investors in Canada’s film and TV ecosystem – delivering content to Canadian audiences and sharing Canadian stories with the world,” MPA CEO Charles Rivkin said in a statement.
$600M to help Canadian productions
In Wednesday’s announcement, Miller announced a cabinet directive to instead issue $600 million in funding to support and stabilize Canadian production.
The government will also develop a new four-point policy directive meant to smooth the act’s rough edges, which includes keeping streaming platforms affordable, protecting choice for consumers, ensuring flexibility and new government investments to support the telling of Canadian stories, local news, and French and Indigenous voices.
“The additional federal investments will ensure Canadian creators, producers and broadcasters receive the financial support they would otherwise have had as a result of the CRTC decisions,” the statement read.
“Additional details on these investments will be announced after consultation with the sector. They will ensure strong support for French-language productions. Once the new CRTC rules are finalized, the level of government investment will be adjusted as appropriate.”