OTTAWA — Amid widespread backlash and the fast-approaching deadline to review the Canada-U.S.-Mexico Agreement, the federal government is directing the Canadian Radio-television and Telecommunications Commissions to review its recent decision to triple the amount it charges digital streaming giants to contribute to Canadian content.
The order comes after pushback from broadcasting associations and as the U.S. administration continues to point to the Online Streaming Act as a trade irritant.
Digital streaming giants — including American companies such as Netflix and Disney — were previously required to contribute five per cent of their Canadian revenues to domestic content. The federal government has yet to collect any of those funds, however, with a number of streaming companies fighting the decision in court.
Late last month, the CRTC announced its decision to triple the amount, from five per cent to 15.
“The CRTC’s new requirements would impose new costs on the companies providing these services, which could ultimately fall on Canadian consumers through higher prices,” reads a news release from Canadian Heritage announcing the review order. “At a time when Canadians face cost-of-living pressure, now is not the time to make culture and entertainment more expensive.”
The U.S. administration, meanwhile, has continued to push back against the legislation. In April, U.S. Trade Representative (USTR) Jamieson Greer’s office released its annual longlist of trade irritants, with several pages specifically relating to Canada, and pointing to liquor, supply management, Buy Canadian procurement policies, and the Online Streaming Act, among others, as key sticking points.
U.S. Ambassador Pete Hoekstra also called out the CRTC’s decision last month, calling it “discriminatory.”
“CRTC is targeting and taxing U.S. companies, putting up new, discriminatory trade barriers, and worsening the investment climate for American businesses,” Hoekstra wrote in a post on X.
Speaking to reporters on his way into a caucus meeting on Parliament Hill Wednesday, Canadian Identity and Culture Minister Marc Miller said “the reality is the sector’s been suffering,” and pointed to the ongoing litigation for preventing the funds from being collected and distributed to the sector.
“It’s no secret to anyone that’s been paying any attention to this that the USTR has identified these issues as a trade issue,” Miller also said. “It would be disingenuous to suggest that this is the single issue.”
“The reality is we’re impatient to make sure that that sector stays vital and stays supported,” he also said. “And that’s why we’re making that investment of $600 million into the industry that again needs it, and can’t wait for the litigations to be solved before people and jobs get lost.”
The minister added that affordability is “an important aspect” to the discussion.
In an email statement to CTV News, CRTC spokesperson Mirabella Salem said the independent quasi-judicial body makes decisions on telecommunications and broadcasting matters based on public consultations.
“The CRTC is aware that the government intends to issue new policy directions to adjust the implementation of the Online Streaming Act,” Salem wrote. “The CRTC will review any new policy directions as they are released.”
Canadian broadcasters pay more
The new rules announced by the CRTC last month affect broadcasters and streamers differently.
In a press release late last month, the Canadian Association of Broadcasters (CAB) pointed to a “significantly higher financial burden” on private Canadian broadcasters, which, under the new rules, must contribute 25 per cent of their revenues, down from contributions as high as 45 per cent.
While the CRTC categorized the reduction as a “relief,” the CAB said the rate remains higher than that imposed on streamers.
The press release from the federal government Wednesday does not specify whether the private broadcasters’ rate change will also fall under the review.
With files from CTV News’ Abigail Bimman, Annie Bergeron-Oliver and Luca Caruso-Moro
CTV News, BNN Bloomberg, and CP24 are owned by Bell Media, which is a division of BCE.
