U.S. streaming industry slams CRTC rules for Canadian content investment

The industry lobby group representing big American streaming services slammed new revenue rules on Friday forcing them to invest in Canadian content while some Canadian industry organizations said the rules are in line with what this country has required for decades.

The groups are reacting after Canada’s broadcast regulator, the CRTC, said Thursday large TV streaming services must contribute 15 per cent of their Canadian revenues to Canadian content.

That’s three times the initial contribution requirement the CRTC set out in 2024, which is being challenged in court by streamers including Apple, Amazon and Spotify.

The CRTC made the decisions as part of its implementation of the Online Streaming Act, which the United States has identified as a trade irritant ahead of negotiations with Canada.

The Motion Picture Association, the U.S. group representing streamers including Netflix and Prime Video, said the new rules impose unprecedented, unnecessary and discriminatory investment obligations on U.S. streaming services.

It said it will triple the cost of doing business in Canada and called on the federal government to reconsider.

0:39 CRTC orders Netflix, Apple TV to boost Canadian content spending

“American studios and streaming services are already the top foreign investors in Canada’s film and TV ecosystem — delivering content to Canadian audiences and sharing Canadian stories with the world,” the group wrote in a media statement.

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The Canadian Media Producers Association, a national advocacy body for independent media producers, however, said the rules are largely in line with federal broadcasting policy for generations.

In a statement released on Friday, it said the CRTC’s decisions “reflect the underlying philosophy of the Online Streaming Act, namely that broadcasters and streaming services that generate significant revenues from Canadian subscribers and viewers must also invest in Canadian programming.”

The organization said they are reviewing the changes and will work to ensure they enable Canadian producers to continue making contributions to Canadian programming.

2:42 Will Netflix and other major streaming services leave Canada after CRTC ruling?

ACTRA Toronto, the union representing performers in film, radio and TV, also expressed support for the CRTC’s decision.

“Decisions to strengthen support for Indigenous and Canadian content and to improve discoverability are a step in the right direction. For ACTRA Toronto performers, this has the potential to generate new opportunities, strengthen domestic production, and help ensure Canadian audiences continue to see themselves reflected on screen,” said ACTRA Toronto president Kate Ziegler.

“However, funding formulas are not the only determinant factor.”

Canadian Heritage Minister Marc Miller said in a social media post Thursday he is reviewing the CRTC’s decision.

“As we carefully assess its impacts, it will always be paramount to ensure that Canadians continue to see themselves reflected on screen, hear Canadian voices, and celebrate what makes this country unique,” he wrote.

U.S. Ambassador to Canada, Pete Hoekstra, said the CRTC’s decision “is making a bad situation worse.”

“CRTC is targeting and taxing U.S. companies, putting up new, discriminatory trade barriers, and worsening the investment climate for American businesses,” he wrote on social media.

The CRTC’s new rules also change the contribution requirements for traditional broadcasters. Currently paying between 30 and 45 per cent, those fees will be lowered to 25 per cent.

The CRTC also set out rules on how the money must be spent for both streamers and broadcasters, including contributions toward production funds and direct spending on Canadian content.

Most of the streamers’ financial contributions can go toward content, though the CRTC is imposing rules on how that money must be spent for the largest streamers.

For instance, streamers with Canadian revenues of more than $100 million annually must direct 30 per cent of spending toward partnerships with Canadian broadcasters and independent producers.

Large Canadian broadcasters will have to direct at least 15 per cent of their contributions toward news.

— With files from Anja Karadeglija in Ottawa