The Canadian Radio-television and Telecommunications Commission (CRTC) announced on Thursday that online streaming services must contribute 15 percent of their annual Canadian revenues to support Canadian and Indigenous content. This decision follows consultations on implementing the Online Streaming Act, which was passed in 2023 and requires platforms like Netflix to financially support and promote Canadian content.
Background and Previous Requirements
In 2024, the CRTC had already required online streamers earning over $25 million in annual Canadian broadcasting revenues to contribute 5 percent of their revenues to funds fostering Canadian content. The new 15 percent contribution includes this base amount, with the majority directed toward Canadian content productions. Nearly 30 percent of that expenditure must be allocated to French-language content.
Legal Challenges and U.S. Response
U.S. tech giants including Apple, Amazon, Spotify, and the Motion Picture Association-Canada, which represents major American studios, are challenging the CRTC's order in Canadian federal court. A decision is expected soon, with payments paused in the interim. The Online Streaming Act has become a significant trade irritant for the United States. In March, Republican lawmaker Lloyd Smucker introduced the Protecting American Streaming and Innovation Act, which could use Section 301 of the 1974 Trade Act to investigate whether Canada's broadcasting law discriminates against American companies. Canada argues that the streaming legislation falls under the cultural exemption in the Canada-United States-Mexico Agreement (CUSMA).
Impact on Traditional Broadcasters
As part of Thursday's decision, the CRTC reduced the financial contribution requirements for traditional broadcasters. They now need to spend only 25 percent of their annual revenues on Canadian and Indigenous content, down from the previous 30 to 45 percent obligation.
Discoverability Framework
The CRTC also introduced a discoverability framework outlining expectations for online streamers to ensure Canadian and Indigenous content is visible to audiences. This framework aims to promote such content on streaming platforms.
More details are expected to follow as the situation develops.
