Published on: June 8, 2024
Netflix, Spotify, Max, and other online streaming services may soon be required to pay a fee to the Canadian government to support the country’s broadcasting system.
The rule was announced earlier this week by the Canadian Radio-television and Telecommunications Commission (CRTC), explaining online streaming services will contribute 5% of their Canadian revenues to support locally produced content.
The rule stems from the Online Streaming Act, passed by the Canadian parliament in 2023, which tasked the CRTC with modernizing the country’s broadcasting system.
More specifically, it targets online streaming services that generate at least $25 million in revenue in Canada and aren’t affiliated with a Canadian broadcaster. Revenue from podcast, video game, and audiobook services is exempt from this requirement.
“Today’s decision will help ensure that online streaming services make meaningful contributions to Canadian and Indigenous content. The CRTC will continue to move quickly, listen carefully, and take action as we implement the new legislation,” said CRTC CEO and chair Vicky Eatrides.
In the news release, the CRTC stated that the additional funds would be allocated to “areas of immediate need in the Canadian broadcasting system,” including local news, French-language content, and Indigenous content. The release also noted that streaming companies would have some input on where their contributions are directed.
The commission says the rule will take effect in the 2024-2025 broadcasting year, beginning this fall. The fees are expected to generate approximately $200 million in new funding annually.
The Motion Picture Association-Canada, representing Netflix, Disney Plus, Paramount, and other streaming services, pushed back at the decision.
“We are disappointed in today’s decision that reinforces a decades-old regulatory approach designed for cable companies,” said MPA-Canada president Wendy Noss in a statement. “Today’s discriminatory decision will make it harder for global streamers to collaborate directly with Canadian creatives and invest in world-class storytelling made in Canada for audiences here and around the world.”