OTTAWA — The Canadian Radio-television and Telecommunications Commission (CRTC) announced on Thursday it will require online streamers to pay 15 per cent of its annual Canadian revenues towards Canadian and Indigenous content.
The decision was made following consultations on how to implement the Online Streaming Act; legislation passed in 2023 that obliges Netflix and other streaming services to financially support Canadian content and promote it on their platforms.
In 2024, the CRTC required online streamers that generate more than $25 million in annual Canadian broadcasting revenues, to pay five per cent of its revenues towards funds that fostered Canadian content.
U.S. tech giants such as Apple, Amazon, Spotify and the Motion Picture Association-Canada, which represents the largest American studios, are challenging the order in Canadian federal court.
A decision is expected soon, with the payments paused in the meantime.
“One of the things about the CRTC – we’re a quasi-judicial tribunal; we have effectively the powers of the federal court, which is why when we’re challenged, it goes to the Federal Court of Appeal,” said Scott Shortliffe, vice-president of broadcasting at the CRTC, during a media briefing on Thursday.
“The overall policy of the CRTC is we move forward, if we waited for courts to rule, whether it’s on the broadcasting or telecom side, [firstly] we would just give an incentive for everyone to take us to court on everything all the time,” added Shortcliffe, noting that the regulator needs to keep doing its work.
Shortcliffe said the CRTC will “pay careful attention” to whatever court rulings eventually come out.
The CTRC said the 15 per cent contribution includes the pre-existing 5 per cent base contribution, the majority of which can be spent on Canadian content productions. Nearly 30 per cent of that expenditure must go towards French content.
Canadian broadcasting groups and foreign streamers that make over $100 million in annual revenues will be subject to additional requirements, including that 30 per cent of their expenditures must be directed to enhance partnerships with Canadian production companies, which are defined as companies where Canadians own the majority of the copyright, and at least 15 per cent of investments must go towards support for Canadian news content.
The CRTC said Thursday’s decision will ensure $2 billion in support of Canadian and Indigenous content, such as French-language content and news.
The Online Streaming Act has become a major trade irritant for the U.S. In March, Republican lawmaker Lloyd Smucker tabled a bill in U.S. Congress titled the Protecting American Streaming and Innovation Act, which if passed, could use Section 301 in the 1974 Trade Act to investigate whether Canada’s new broadcasting law discriminates against American companies.
Canada has argued the streaming legislation falls within the cultural exemption laid out in the Canada-United-States-Mexico-Agreement (CUSMA).
Shortliffe said potential U.S. trade action is a matter that the federal government or Global Affairs Canada are better positioned to address.
As part of Thursday’s decision, the broadcast regulator also decreased the level of financial contributions required from traditional broadcasters, who now only must spend 25 per cent of their annual revenues on Canadian and Indigenous content, down from the current 30-45 per-cent obligation.
The CRTC also laid out a discoverability framework, which lays out expectations for online streamers to ensure Canadian and Indigenous content is visible to an audience.
“No one ever likes being regulated,” said Shortliffe, noting the criticism by U.S. streamers. “No one ever likes, particularly, being asked that they should pay more into a system.”
“Clearly, streamers would have preferred not to have base contributions, much less the requirements today,” he said, adding that the financial requirements are still not as high as those being asked of Canadian broadcasting groups.
National Post
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