Canadian Style: With streaming market giants raking in billions of dollars in revenue and forcing users around the world into a never-ending cycle of price hikes, Canadian authorities have decided to turn part of this largely unregulated business into an opportunity to fund local productions.
The Canadian Broadcasting and Communications Commission (CRTC) has imposed a new tax on online streaming services, imposing fines on major companies like Netflix and Amazon. To contribute It imposes a 5% tax on local broadcasting systems on Canadian revenues. The tax is part of the Online Streaming Act (OSA), which was recently approved to modernize Canada’s broadcasting framework.
The 5% tax will take effect in September and is expected to raise an estimated $200 million a year in revenue. Both video and music streaming services will be required to pay the new tax, but companies with annual revenues of less than $25 million will be exempt. Other online services such as audiobooks, podcasts, video games and user-generated content networks will be exempt, meaning YouTube will not be taxed.
According to the CRTC, the estimated $200 million it would raise annually would be dedicated to “areas of urgent need” within Canada’s broadcasting system, including local news, radio, television stations, French-language content, Indigenous content and officially recognized minority groups. The CRTC is expected to allow “some flexibility” to streaming companies interested in directly funding and supporting Canadian television production.
The CRTC, Canada’s broadcasting and communications industry regulator, highlighted the open approach taken by the OSA, which was approved after more than 360 “detailed comment” submissions and three weeks of public consultation with more than 120 groups. The 5% tax on Canada-based streaming companies’ revenues is based on these public records, the CRTC said.
While Canadian regulators have welcomed the new fees, trade groups representing the streaming industry are not. The Motion Picture Association, whose members include Disney and Netflix, said: stated The OSA and the 5% tax are part of a decades-old “discriminatory” regulatory approach targeted at cable companies.
The MPA said it will now be harder for global streamers to partner directly with Canadian creators, arguing that the CRTC has not properly taken into account the “significant contributions” streaming companies already make to Canada’s content industry. The Digital Media Association, which represents music streaming companies, also said the new tax regime is a discriminatory approach and a blatant protectionist attempt to secure free subsidies for Canadian radio stations.
