Canada will require streaming giants such as Netflix Inc. and Spotify Technology SA to spend 15 per cent of their domestic annual revenues on Canadian content, moving ahead with a law that has been identified as a trade irritant by the U.S. Trade Representative.
The Canadian Radio-television and Telecommunications Commission announced new regulations for the country's Online Streaming Act, which brings global streaming platforms under domestic broadcasting rules, including a requirement to pay into funds that support Canadian content.
New Contribution Requirements
The rules unveiled on Thursday seek to ensure that traditional and online broadcasters contribute to the creation of Canadian and Indigenous content in an equitable way that reflects their size and business models, the federal broadcast regulator said in a news release.
Traditional broadcasters must contribute 25 per cent of their domestic annual revenues to Canadian content, down from the current requirement range of 30 per cent to 45 per cent. Meanwhile, online broadcasters, which refers to streaming platforms, will have to contribute 15 per cent, up from the five per cent base contribution they were previously required to make.
How Contributions Will Be Made
More than half of the contributions streamers will have to make can be made directly through content, while some will go toward funds. The regulator also set out rules on the discoverability of Canadian content on platforms.
Trade and Legal Challenges
In a report last month, U.S. Trade Representative Jamieson Greer's office again cited Canada's laws about online platforms as trade barriers. Global streaming giants have been fighting the new law and were able to obtain a temporary pause on the five per cent contribution requirement from the U.S. Federal Court of Appeal in December 2024.
These new regulations are expected to significantly increase operational costs for streaming platforms operating in Canada, as they must now allocate a larger portion of their revenue to Canadian content production and related funds.
