Online streaming services operating in Canada will be required to contribute five per cent of their Canadian revenues to support the domestic broadcasting system, the country’s telecoms regulator said on Tuesday.
The money will be used to boost funding for local and Indigenous broadcasting, officials from the Canadian Radio-television and Telecommunications Commission (CRTC) said in a briefing.
“Today’s decision will help ensure that online streaming services make meaningful contributions to Canadian and Indigenous content,” wrote CRTC chief executive and chair Vicky Eatrides in a statement.
The measure was introduced under the auspices of a law passed last year designed to make sure that companies like Netflix make a more significant contribution to Canadian culture.
The government says the legislation will ensure that online streaming services promote Canadian music and stories, and support Canadian jobs.
Minister of Canadian Heritage Pascale St-Onge told reporters on Tuesday that a decision by the CRTC, which calls for online streaming services to hand over five per cent of domestic revenues, will help stimulate investment in Canadian content.
Funding will also be directed to French-language content and content created by official language minority communities, as well as content created by equity-deserving groups and Canadians of diverse backgrounds.
The release also said that online streaming services will “have some flexibility” to send their revenues to support Canadian television directly.
“I think one of the prime concerns associated with the decision, as it stands right now, is that there are a lot of other decisions that the CRTC has to make to make the entire framework work,” said Michael Geist, a law professor at the University of Ottawa.
The government has said that the definition of Canadian content needs to be re-examined and modernized, so that the beneficiaries of payments from a foreign streamer are in fact creating works that meet those standards, he said.
“The problem is that the CRTC hasn’t done that,” Geist said.
The measure, which will start in the 2024-2025 broadcasting year, would raise roughly $200 million annually, CRTC officials said. It will only apply to services that are not already affiliated with Canadian broadcasters.
Netflix, Apple TV+, Disney+, Spotify and Amazon did not immediately respond to a request for comment.
A Canadian group was among 20 screen organizations from around the world that signed a statement in January asking governments to impose stronger regulations on streaming companies operating in local markets.
One of the demands was a measure that would force companies profiting from their presence in those markets to contribute financially to the creation of new local content.
Canada isn’t the first country to ask foreign streamers to direct domestic revenues toward local content. France set similar rules in 2021, requiring streamers to allocate 20 to 25 per cent of revenues to European and French content creation.
