The Trudeau-era Liberal ministers who brought in the Online Streaming Act had a Robin Hood-like story to tell: the government would take money from web giants and give the money to struggling creators of Canadian stories and music. Unfortunately, like the tale of Robin Hood, it was mostly fictional.
The ruse was up last week, when the news broke that the Carney government planned to direct the Canadian Radio-television and Telecommunications Commission (CRTC) to scrap its requirement for foreign streaming platforms to fund local news and niche broadcasters in Canada.
This followed the CRTC’s move to hike the percentage of Canadian revenues large streaming companies would need to pay to support Canada’s cultural sector threefold, to 15 per cent. The funding requirement was at the heart of the Online Streaming Act, which put internet streaming companies under the CRTC’s watch and required them to make Canadian content “discoverable.” But with the levy causing friction with the U.S. as Canada seeks to renegotiate the USMCA trade deal, it made sense to reverse course.
Even if Canada wasn’t in the midst of a head-splitting attempt at negotiation with a belligerent trade partner, the Online Streaming Act doesn’t make much sense. It is an awkward attempt to reconfigure old Canadian content broadcast rules for the digital era.
Ottawa orders CRTC review of policy to raise streamers’ spending obligations
While it made some sense half a century ago to force broadcasters, which had a valuable captive market due to their control of scarce airwaves, to fund Canadian content, it doesn’t work to apply the same logic to Netflix and Spotify today. Cancon can be found on global platforms by anyone who takes the time to search for it.
The legislation was predicated on the idea that there is a crisis in the Canadian cultural sector, despite healthy levels of film and television production that reached $3.62-billion in 2024/25, according to figures from the Canadian Media Producers Association.
While revenues are down for traditional broadcasters, forcing digital content companies to cough up money to cover their losses was always a leap. If iceberg lettuce drops in popularity as tastes change, should arugula producers be forced to cut cheques in perpetuity? Should oat milk companies be forced to share profits with dairy producers?
The wide scope of the Online Streaming Act also initially raised alarm bells from independent podcast producers and YouTube content creators who worried that the requirement to surface Canadian and Indigenous content meant the CRTC would pick winners and losers. It was little surprise that the act’s implementation was stalled by regulatory and legal challenges.
The reason given by Prime Minister Mark Carney for ditching the cross-subsidy model was that it would result in higher prices for Canadian consumers (a welcome acknowledgment). While the government originally framed the move as a way to get money from web giants, critics such as law professor Michael Geist pointed out at the time that costs would be passed on to subscribers.
The Canadian Media Producers Association was quick to accuse the Carney government of selling out Canadian culture to U.S. big tech companies, but the Prime Minister is right to walk back this deeply problematic policy. He threw in an annual $600-million sweetener for content creators to soften the blow, in addition to existing plans to consult about extending the Journalism Labour Tax Credit to broadcasters.
Marc Miller, Minister of Canadian Identity and Culture, also said the government will continue to pursue revenues from streamers to fund Canadian programming, although the rate will likely be lower than what the CRTC wanted.
Mr. Miller should instead take a fresh look at Canada’s cultural sector, recognizing that it’s not practical to try to regulate the internet, and the idea of foreign firms footing the bill for Canada’s cultural products is simplistic. In fact, the concept of forcing homegrown broadcasters to fund Canadian content also needs a rethink.
What kind of policies would spur creators to produce excellent content that would succeed on its own merits, rather than just appeal to government bureaucrats? How can cultural policies do more than just serve as handouts to industry, but bring benefits to the public?
The story might be more complex than a simple Robin Hood narrative, but it’s an essential plot line to figure out.