Canada’s telecom regulator, the Canadian Radio-television and Telecommunications Commission (CRTC), has introduced a 5% tax on the Canadian revenues of major streaming platforms like Netflix, Disney+, and Spotify. This move is designed to inject around $200 million annually into the Canadian media landscape, supporting film, television, music, and local news, with a focus on content creation by underrepresented groups.
New Streaming Regulations in Canada
Under the Online Streaming Act, the CRTC now mandates that streaming services such as Netflix, Spotify, and Amazon Prime contribute 5% of their annual Canadian revenues to support local broadcasting. This regulation targets foreign services that generate $25 million or more in Canadian broadcasting revenue each year, following the enactment of Bill C-11 last year.
The funds raised will support various initiatives, including the creation of Indigenous content, French-language productions, and projects by Black filmmakers and other diverse Canadian creators. A portion of the revenue will also go to the Canadian Starmaker Fund, which helps emerging Canadian recording artists signed by major Canadian labels.
Industry Reactions: Mixed Responses
The new regulations have sparked mixed reactions across the industry. While Canada’s film, TV, and music sectors have largely welcomed the move as a boost for local content creation, streaming giants have voiced concerns that the financial obligations might lead to higher consumer prices. Graham Davies, president and CEO of the Digital Media Association—which represents Amazon Music, Apple Music, and Spotify—criticized the new tax as discriminatory, claiming it unfairly targets services that already contribute significantly to Canadian culture.
“Given Canada’s affordability crisis, the government should avoid adding to this burden, especially for younger Canadians who are the predominant users of audio streaming services,” Davies said.
Promoting and Funding Canadian Content
The new regulations also require foreign streaming platforms to actively promote and financially support Canadian TV, film, and music. Vicky Eatrides, chairperson and CEO of the CRTC, emphasized that the decision ensures meaningful contributions to Canadian and Indigenous content.
Amazon Prime Video described the decision as an “onerous and inflexible financial levy” that could negatively impact Canadian consumers. Heritage Minister Pascale St-Onge, however, argued that the additional investment in Canadian content would benefit the streaming platforms by enriching the variety of content available on their services.
Ending the “Free Ride” for Foreign Streamers
Marla Boltman, executive director of Friends of Canadian Media, highlighted that foreign streaming services have long avoided contributing to the structures that support Canadian news and storytelling. She praised the CRTC’s decision as a necessary step to end this “free ride.”
In contrast, the Motion Picture Association – Canada, representing major studios like Disney and Netflix, expressed disappointment. Wendy Noss, the association’s president, pointed out that foreign studios and streaming services already spend over $6.7 billion annually on Canadian productions, a substantial investment not considered in the CRTC’s calculations.
Allocation and Impact of Funds
The mandated contributions will be directed to various funds. Two percent of the projected $200 million will support Canadian film and TV through the Canada Media Fund or direct funding for Canadian content. Funds will also go to the Black Screen Office Fund, the Canadian Independent Screen Fund for BPOC creators, and the Broadcasting Accessibility Fund. The Indigenous Screen Office of Canada and the new Indigenous Music Office will also receive support.
Future Implications and Ongoing Consultations
As the CRTC’s regulatory process continues into next year and beyond, streaming platforms may need to increase their contributions. Consultations are scheduled to run until 2026. Michael Geist, the University of Ottawa’s Canada Research Chair in internet law, criticized the decision, suggesting it focuses too much on regulatory payments rather than market success.
“Bill C-11 was about making web giants pay, and that’s what the CRTC is determined to do, even if consumers will ultimately get the bill,” Geist said.
This regulatory shift is reminiscent of past efforts by Ottawa to compel major players to support local industries, such as the Meta news ban. Experts warn that the current move could similarly backfire, potentially leading to higher subscription prices for consumers.
Impact on Canadian Production Hubs
Despite the contentious new tax, major Canadian cities like Toronto and Vancouver remain significant production hubs for the global entertainment industry. While much of the content produced there is not classified as “Canadian,” these cities continue to attract substantial investment from international studios.
Netflix, for example, has invested over $5 billion in Canadian productions over the past five years, far exceeding the new 5% tax. However, even with increased financial contributions, many Canadians still prefer US entertainment options.
As the regulatory landscape evolves, industry stakeholders and the public will closely monitor the balance between supporting local content and managing consumer costs.
