Broadcasters push back on Ottawa’s plan to roll back foreign streamer contributions

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As the government plans to roll back several elements of the Online Streaming Act, including scrapping a base contribution from foreign streamers to support Canada’s news, broadcasters say those streamers should not be let off the hook from contributing to Canadian content.

The Globe and Mail reported on Sunday that Ottawa will direct the broadcasting regulator, the Canadian Radio-television and Telecommunications Commission, to scrap certain requirements for foreign streaming platforms to fund local news and niche broadcasters in the country, according to two senior government sources.

The two sources said Ottawa is planning to enter into talks with foreign streamers and other stakeholders to determine “a more reasonable rate” of contribution to Canadian programming, which has yet to be decided.

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The Globe is not naming the sources because they were not authorized to discuss the matter publicly.

The Online Streaming Act, which became law in 2023, forces foreign companies that stream audio and video content to contribute financially to Canada’s cultural industries. The rollback is widely seen as an attempt by Mark Carney’s government to assuage U.S. concerns about the impact on U.S. film and music streaming giants.

Kevin Desjardins, president of the Canadian Association of Broadcasters, said the position of the organization, which represents private broadcasters, is that foreign streamers should still be required to contribute to supporting Canadian news.

In the past, news was produced by traditional broadcasters, and was cross-subsidized by their entertainment content. But those streamers “have helped to weaken or break that internal cross-subsidy,” he said.

“Our opinion would be that if they don’t produce news themselves, they should actually be supporting it otherwise, through contributions to funds,” Mr. Desjardins said in an interview Monday.

However, “we gather that that’s not where the government’s head is at this point.”

In the longer term, Canadian broadcasters need structural solutions that treat broadcasters and streamers in the country’s media system equally, Mr. Desjardins said.

In light of the news Monday, David Errington, president of the non-profit Accessible Media Inc., said the organization still believes foreign streamers should be required to contribute to the Canadian broadcasting system in some form, as they do in many other countries.

Previously, AMI – which produces content for Canadians with disabilities – was slated to receive funding through contributions from streamers, required by the CRTC under the Online Streaming Act.

But last week, Ottawa ordered the CRTC to review its May policy which would have tripled streamers’ contribution from 5 per cent to 15 per cent of their Canadian revenue to Canadian content.

And in order to reorient the CRTC’s framework, Canadian Heritage said it would develop new policy directions to adjust the implementation of the Online Streaming Act, which would aim to keep access to content affordable for consumers.

At the same time last week, Ottawa announced $600-million in support of Canada’s media sector, as those contributions from streamers had been held up by a number of legal challenges.

On Monday, the two government sources said this new funding is likely to include money for local news and broadcasters that would no longer get financial support from foreign streamers through the CRTC’s Services of Exceptional Importance Fund.

“If we didn’t get this help, in three or four years from now we would probably be out of business,” Accessible Media’s Mr. Errington said.

These government subsidies for “services of exceptional service” – which also includes APTN, the Aboriginal Peoples Television Network – will provide “long-term sustainability” not connected to streaming revenue, he said.

Benoit Fortin, a spokesperson for the CRTC, an independent quasi-judicial tribunal, said it “is aware that the government intends to issue new policy directions to adjust the implementation of the Online Streaming Act,” and that the CRTC would review them as they are released.

In December, as it emerged the Online Streaming Act risked becoming a casualty of the trade war with the United States, Reynolds Mastin, president and CEO of the Canadian Media Producers Association, which represents independent TV, film and digital producers, told The Globe and Mail in a statement “it is imperative that the federal government continue to defend this important legislation.”

But in a statement on Monday, he said, that as the association awaits the new policy direction, “the most important thing is that foreign streaming services, operating in Canada and generating billions from Canadian audiences, be required to commission Canadian-owned, Canadian-produced shows that showcase the best Canadian creative talent.”

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In a statement, Corus Entertainment spokesperson Melissa Eckersley said the company continues to follow developments on this evolving file and looks forward to hearing more from the Government of Canada about next steps.

“Now more than ever, Canadian broadcasters need a level playing field with their foreign streaming competitors, and independent local news providers need robust support,” she said.

Graham Davies, president and chief executive of the Digital Media Association, a Washington-based non-profit that represents music streamers including Spotify, Apple and Amazon, welcomed the government’s shift in direction.

“Direct government support for creators is better policy than a streaming tax, and we’re pleased to see the government moving in that direction,” he said in an e-mail.

The act has been criticized by U.S. Trade Representative Jamieson Greer, who has said that it unfairly targets American tech companies.

Last week Marc Miller, Minister of Canadian Identity and Culture, said a key aim is to get money flowing swiftly to Canadian TV, film, music and broadcasting, which are sorely in need of funding.