Major U.S. video streaming services including Netflix and Disney have asked a Canadian court to block a plan to force authorities to use 5% of their domestic sales to fund local news broadcasts and other domestic content.
The Motion Picture Association of Canada, which represents streaming distributors, said last month’s order by the Canadian Broadcasting and Communications Commission “exceeds the power of the broadcast regulator and fails to recognize the billions of dollars that companies spend in Canada each year.” According to a Dow Jones report.
“Our members’ streaming services do not produce local news and are not afforded the important legal privileges and protections that Canadian broadcasters enjoy in exchange for their responsibility to provide local news,” said Wendy Noth, president of the association.
The CRTC previously said the payments would begin Sept. 1 of the 2024-25 fiscal year and would contribute C$200 million a year to the broadcasting system, roughly $147 million, the report said.
In filings with the Canadian Federal Court of Appeal, lawyers for the streaming companies said regulators have not provided “any rationale” for why foreign streamers should be required to contribute to the production of local television and radio news programming.
They argued that the imposed fees could lead to higher prices for Canadian streaming subscribers and could cause streaming providers such as Netflix, Disney+, Paramount+ and Max to reconsider their expansion into Canada.
“The broadcasting regulator concluded, without any evidence, that ‘increased support for news production is necessary,'” the lawyers added in their filing.
“Imposing an obligation on foreign online companies to fund news production would not be appropriate given the nature of the services they provide,” the filing added.
The Canadian association has called the broadcasting regulator’s actions “unjustified” and is seeking the Court of Appeal’s intervention.
The law was passed last year with the aim of allowing online streaming services to promote Canadian music and stories and support Canadian jobs.
Last month, CRTC chair Vicki Eatrise said the mandatory donations were meant to address concerns that “certain types of content, such as locally relevant news, will no longer be produced or distributed.”
Or it will become harder to get because market forces alone will no longer be able to raise the funds.”
Representatives for the MPA-C and the CRTC did not immediately respond to requests for comment.
