Canada’s federal government has ordered its telecommunications regulator to abandon a controversial decision that would have significantly increased financial obligations for American streaming platforms like Netflix to fund Canadian programming, according to an announcement Wednesday from the country’s culture minister.
Culture Minister Marc Miller announced that instead of implementing the fee structure, the government plans to invest hundreds of millions of dollars directly into the entertainment industry.
The policy reversal follows intense lobbying from the Motion Picture Association, which represents major streaming companies, urging Canadian leadership to reconsider the approach. U.S. Ambassador to Canada Pete Hoekstra had also pressed for the policy to be withdrawn.
The about-face occurs during ongoing negotiations between Canada and the United States regarding potential renewal of the trilateral trade pact that includes Mexico.
In May, the Canadian Radio-television and Telecommunications Commission — Canada’s counterpart to America’s Federal Communications Commission — announced it would mandate major streaming platforms contribute 15% of their Canadian earnings to domestic content production. The requirement was part of implementing the Online Streaming Act.
When questioned about whether the reversal represented another compromise to American interests, Canadian Prime Minister Mark Carney said Wednesday that officials were considering the financial impact on Canadian consumers.
“It is another step to reinforce affordability for Canadians. This is not the time to raise the costs for Canadians,” he stated.
U.S. Ambassador Pete Hoekstra praised the government’s decision on social media.
“American firms want to invest in Canada’s creative sector, and a fair, nonburdensome framework makes that possible,” Hoekstra wrote online.
Culture Minister Miller told media in Ottawa that American identification of the Online Streaming Act as a trade concern was not the sole factor behind the government’s request for the CRTC to reverse direction.
“We’re impatient to make sure that the (streaming) sector stays vital and stays supported, and that’s why we’re making that investment of $600 million Canadian (US$432 million) into the industry,” Miller explained.
The policy change has drawn criticism from some quarters.
Kyle Irving, chair of the board of the Canadian Media Producers Association, expressed concern in a statement, saying the board was still analyzing the development but “we are concerned that the federal government has sold out Canadian culture in favor of big U.S. tech interests.”
Irving questioned whether American streaming services, which earn “tens of billions” from Canadian subscribers, should be obligated to support Canadian storytellers producing domestic content.
