A holiday movie set in Almonte, Ont., in 2024. Under new rules, streamers - many of them based in the U.S. - will need to pay more money into supporting Canadian content.DAVE CHAN/Getty Images
The Canadian Radio-television and Telecommunications Commission has formalized new rules for online streaming services that will force them to devote more of their revenues to Canadian and Indigenous content, as part of a $2-billion support system for domestic programming.
The broadcast regulator’s new policies will require companies that stream video and audio content to use 15 per cent of their Canadian revenue to support domestic programming – triple the 5-per-cent baseline requirement announced two years ago. Meanwhile, the CRTC lowered the minimum rate for traditional broadcasters to 25 per cent.
The new framework comes three years after Ottawa passed the Online Streaming Act, requiring the CRTC to impose spending requirements on streamers. This followed repeated calls from Canadian entertainment companies, broadcast workers and artists to support the industry by modernizing decades-old Canadian content regulations.
In an interim decision in 2024, the CRTC decided that streamers – including U.S.-based companies – would need to pay 5 per cent of their Canadian revenues into existing funds that support the broadcasting system.
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However, streamers immediately challenged that policy before the Federal Court of Appeal, and said that levies and content-promotion quotas would weaken their existing investments in Canadian content. Those payments were stayed by the court, which has yet to make a decision on the interim rates.
The new policy requires that streamers contribute to some media funds, but allows for the majority of the spending to be used for investments in Canadian content.
Despite this flexibility, experts are warning that the new policy could deepen a rift with the U.S. government over cross-border trade as the Trump administration continues on its protectionist course. U.S. Trade Representative Jamieson Greer, the administration’s top trade official, has raised the Online Streaming Act as an irritant because it imposes costs on American companies.
It is one of several Canadian policies expected to be targeted by the U.S. at a coming mandatory review of the United States-Mexico-Canada Agreement.
In March, Republican Representative Lloyd Smucker introduced a bill in Congress that promised to investigate the Online Streaming Act for discrimination against American companies, with retaliatory tariffs as a potential response.
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The Motion Picture Association, which represents large streamers, including Netflix, Paramount Pictures and the Walt Disney Studios, said the framework “directly violates” Canada’s obligations under the USMCA.
The association “strongly condemns the CRTC’s decision to impose unprecedented, unnecessary, and discriminatory investment obligations on American streaming services operating in Canada” chairman and chief executive Charles Rivkin said in a statement Thursday night.
Meredith Lilly, a professor of international economic policy at Carleton University, said the decision would “further provoke” the U.S. by adding to its list of grievances against Canada in the USMCA review.
“This again will be viewed as discriminatory by U.S. firms, and regarded as a subsidy by U.S. firms to Canadian ones,” she said.
The U.S. could see the decisions as a form of protectionism on Canada’s part, and resist the obligation to support Canadian content, said Lori Turnbull, a political analyst and professor at Dalhousie University.
Moreover, streamers “might decide the Canadian market isn’t worth it,” she said.
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When asked Thursday if the CRTC was concerned that the new measures could irritate trade talks, Scott Shortliffe, vice-president of broadcasting, said the regulator was focused on applying Canadian law and is not involved in trade negotiations.
“We believe that they will be respected by these companies. Whether they choose to challenge them through any of the measures that are available in Canadian law is, of course, totally up to them,” he said.
The CRTC is paying careful attention to the Canadian appeal court’s decision, but was not waiting for it, he said. “That would just give an incentive for people to continually take us to court, and then we would never get anything done.”
While Thursday’s decision increased the streamers’ spending requirements, it reduced them for some Canadian traditional broadcasters.
Under the new rules, companies with Canadian broadcasting revenues of more than $100-million will be required to spend 25 per cent of those revenues to support Canadian and Indigenous content through a combination of fund contributions and content production. The CRTC said this would “provide relief” as their current requirements range from 30 per cent to 45 per cent.
Previously, conditions around spending varied between companies. For these large broadcasters, the new policy sets out standard requirements for how they must allocate that total spending, including a minimum of 15 per cent of their total contribution on news content.
Medium-sized broadcasters, ranging between $25-million and $100-million in revenues, will also be required to spend 25 per cent of their broadcasting revenues on Canadian content, but can choose how they want to spend the money without set requirements. These broadcasters “need greater flexibility to compete for audiences,” Mr. Shortliffe said.
Small broadcasters with less than $25-million in revenues will not be required to contribute. “This will overall reduce red tape and administrative burden,” Mr. Shortliffe said.
The 25-per-cent spending cap was applauded by the Canadian Association of Broadcasters, who called it “a more equitable contribution model across traditional broadcasters and online streaming services.”
But the CAB said it remained concerned about the gap between the percentage requirements for broadcasters and streamers – 25 per cent versus 15 per cent – noting that the broadcasters are facing “unprecedented competitive pressures.”
As part of a separate decision on Thursday, the CRTC said that streamers must do more to make Canadian content visible.
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Unlike traditional broadcast regulations, which have required a minimum amount of Canadian content – such as 35 per cent of popular music played on a radio station – the CRTC stopped short of promotion quotas in Thursday’s policy announcement.
Rather, the new policy dictates that the content should be “presented equitably in relation to other content and services” on landing pages, carousels, playlists or channel listings, instead of being siloed only into Canadian-specific channels. More specific requirements are expected to be established later.
Streamers will also be required to measure the prominence they give Canadian content and the engagement it receives “using standardized metrics where possible.”
The Alliance of Canadian Cinema, Television and Radio Artists performers’ union said it needed more clarity around accountability and how the policy’s outcomes would be measured.
“The test is whether these proclamations will lead to meaningful, enforceable investment in Canadian culture,” Eleanor Noble, the union’s president, said in an e-mailed statement.
Editor’s note: This article has been updated to correct the surname of Scott Shortliffe.