The Canadian Radio-television and Telecommunications Commission (CRTC) revealed on Thursday that major online streaming services such as Disney+, Netflix, and Prime Video will be required to allocate a higher portion of their revenue towards Canadian content. This decision follows the enactment of the Online Streaming Act in 2023 during the previous Trudeau administration, granting the CRTC the authority to mandate streaming companies with over $25 million in annual Canadian revenue to contribute to the production of Canadian content, including films, TV shows, and local news.
Initially, the CRTC set the minimum contribution at five percent of a company’s Canadian revenue, but it has now been raised to 15 percent. Scott Shortliffe, a CRTC vice-president, stated during a media briefing that the focus is on readjusting Canadian content contributions. Concurrently, the CRTC is reducing the minimum contribution rate for traditional broadcasters to 25 percent, down from the previous range of 30 to 45 percent. The CRTC projects that these new regulations will maintain funding for Canadian content at approximately $2 billion annually.
In addition to altering the contribution percentage, the CRTC has revised how it expects streaming services to allocate their Canadian content funds. Instead of requiring contributions to national funds like the Canada Media Fund, the new rules permit platforms to collaborate with Canadian production companies for content creation.
Furthermore, large broadcasters and online streaming platforms generating over $100 million in annual Canadian revenue will be obliged to allocate funds to support services deemed of “exceptional importance,” such as the Cable Public Affairs Channel and the Weather Network. The CRTC is also introducing discoverability guidelines to ensure that Canadian and Indigenous content receives prominent placement on streaming platforms for viewer accessibility.
Minister of Canadian Identity and Culture, Mark Miller, acknowledged the CRTC’s changes in a social media post, emphasizing the importance of reflecting Canadian diversity and uniqueness in media content. Despite ongoing legal disputes initiated by streamers challenging the initial five percent contribution requirement, the CRTC remains confident in its authority. The Motion Picture Association of Canada criticized the CRTC’s decision, contending that it unfairly targets global streamers and violates trade agreements.
According to Michael Geist, a legal expert from the University of Ottawa, if the CRTC regulations withstand legal challenges, Canadian consumers may experience increased subscription costs due to the higher operating expenses for streaming services. The Online Streaming Act has also attracted scrutiny from U.S. lawmakers, who view it as a trade barrier and have proposed retaliatory actions. As discussions over the Canada-U.S.-Mexico Agreement (CUSMA) continue, the implications of these new regulations on trade relations remain uncertain.