Dozens of Canadian cultural sector organizations are urging Prime Minister Mark Carney to retain regulations that mandate foreign streaming companies like Netflix to contribute financially to Canadian content. The government’s proposal to substitute the 15 per cent tax on significant streamers’ Canadian revenue with government funding is being contested by these groups. In a letter signed by 50 organizations, it is highlighted that the proposed annual funding, unlike a CRTC-regulated contribution system, is susceptible to modifications through the federal budget.
The letter emphasizes, “The government’s commitment of $600 million per year, while appreciated, is not a sufficient replacement for enduring, legally enforceable contribution obligations. Discretionary funding is subject to budgetary and external political influences; in contrast, a regulated contribution framework is not.”
Signatories of the letter comprise the Canadian Media Producers Association, representing independent producers, as well as unions representing Canadian actors, writers, directors, and multiple film festivals. Following the Canadian Radio-television and Telecommunications Commission’s decision to raise contributions for large streaming services to 15 per cent, the government announced its intention in June to issue a new policy directive and offer direct annual funding to the industry instead.
Subsequently, the government indicated in a court filing its intent to “eliminate” the financial contribution mandate for streamers. The letter, also directed to Culture Minister Marc Miller, expresses concern over the “significant uncertainty” introduced into the production sector by the government’s June pronouncement.
The letter argues that the 15 per cent contribution requirement “remains a suitable standard for the ensuing regulatory framework and should not be diluted by the replacement of the core contribution mechanism. Upholding this threshold is just and equitable.” Although Ottawa altered its stance on the streaming regulations following pressure from the U.S., which identified the enabling legislation as a trade concern, the United States trade representative asserted that Canada would not receive full recognition for the adjustment.