Controversy as Canadian gov’t injects $430m, tears up regulator’s SVoD decision

The government of Canada has revealed plans to inject C$600m (US$430m) annually into the audiovisual and audio sectors in a surprise announcement that essentially tears up a recent decision by the country’s broadcasting regulator.

Last month, the Canadian Radio-television and Telecommunications Commission (CRTC) issued a long-awaited decision mandating that large streamers like Netflix and Disney+ must contribute 15% of their Canadian revenue toward local content production.

Marc Miller

Taymaz Valley via CC

On Tuesday, Mark Carney’s Liberal government said the new costs for these streamers would ultimately be passed on to consumers at a time when Canada is in a cost-of-living crunch. “Now is not the time to make culture and entertainment more expensive,” said the government.

Marc Miller, Canada’s minister of Canadian identity and culture and minister responsible for official languages, has subsequently directed the CRTC to “review” its decision, at the same time as announcing a C$600m cash injection designed to “provide stability and immediate support to Canada’s audio and audiovisual sectors and to keep our culture accessible and affordable for all Canadians.”

Exactly how the funds will be apportioned is unclear, with the government saying additional details would be announced “after consultation with the sector.” It added that “once the new CRTC rules are finalised, the level of government investment will be adjusted as appropriate.”

The announcement represents a stunning turn of events in a saga that has raged on for more than a decade.

Within the industry, this latest twist has been greeted with astonishment and uncertainty, with most unsure how to react given there remain so many unknowns about how the funding will be divided up.

Elsewhere in its announcement, the Canadian government said it would “develop new policy directions to adjust the implementation” of the Online Streaming Act (OSA), which was passed into law in 2023 with a view to bringing US streamers under Canadian regulation.

The decision to walk back the 15% streaming levy comes as Canada and the US engage in wider trade talks. While there are far larger industries and items being discussed in the negotiations, including agriculture, car manufacturing and energy, it was widely known that the OSA is viewed as a “trade irritant” by the White House.

Even before the CRTC issued its decision last month, many questioned the wisdom of announcing a potentially incendiary policy decision that could create additional friction at a time when high-stakes trade talks are underway.

In the aftermath, the Motion Picture Association (MPA), which represents the US streamers and studios, said it “strongly condemns the CRTC’s decision to impose unprecedented, unnecessary and discriminatory investment obligations on American streaming services operating in Canada.”

Some have interpreted the government’s actions as evidence of bending to the Trump administration and making Canada’s cultural industry a sacrificial lamb.

The Canadian Media Producers Association (CMPA) criticised the government’s move, with chair Kyle Irving saying it was “concerned that the federal government has sold out Canadian culture in favour of big US tech interests.”

He added: “Since US streamers entered Canada a decade ago, they have consistently raised their prices on Canadian subscribers, year after year. Make no mistake, this will continue regardless of any government action. The question we must ask is should US streamers, who’ve made tens of billions from Canadian audiences, also be required to invest in Canadians telling Canadian stories?

“Prime minister Carney must stand up for Canadian stories, Canadian labour, Canadian independent producers and Canadian cultural sovereignty. The free ride for the big US tech giants must end.”

Canadian actors’ union ACTRA said it was “shocked by the federal government’s decision to dismantle the contribution obligations for foreign streaming giants and instead replace those investments with a US$600m taxpayer-funded investment for Canada’s broadcasting and cultural sector.”

ACTRA national president Eleanor Noble added: “Our industry was assured that culture would not be a bargaining chip in North American free trade negotiations, but this decision proves differently.”

While the decision was primarily derided by the creative and production community, the Canadian branch of the MPA welcomed it.

“Today’s announcement acknowledges that the CRTC’s proposed framework for investment obligations needs to change,” said MPA-C president and MD Michele Austin. “We are encouraged by the government’s commitment to new policy directions. While certain concerns about the Online Streaming Act’s framework for global streamers remain unresolved, we look forward to engaging with leaders in Ottawa to develop a new approach to supporting Canadian stories.”

Canadian media company Rogers Sports & Media (RSM) also said it was “pleased minister Marc Miller is taking swift and decisive action to put the CRTC on the correct path to modernising Canada’s broadcasting regulatory framework.”

RSM spokesman Zac Carreiro claimed the CRTC’s decision would have imposed “complicated and onerous new expenditure quotas with no meaningful relief to Canadian broadcasters, while placing a much lighter set of obligations on American streamers.”

He added that today’s “fiercely competitive environment demands the immediate reduction or elimination of the mandatory financial contributions and inflexible expenditure requirements imposed on Canadian cable companies and broadcasters.”