A Capitulation or Bad Idea?

It is hard to believe that it was four years ago, in June 2022, when I first wrote about the Liberals’ proposed Bill C-11, the Online Streaming Act.

As I wrote at the time, Bill C-11 amended the Broadcasting Act to give the government jurisdiction over online streaming content. There were many concerns about this proposal:

Who decides what online content falls under the Act?
Where do you draw the line between someone creating content recreationally and a professional content creator or business?
What happens when the content creator is located outside Canada?
Will Canadians foot the bill?

At the time, industry stakeholders, content creators, legal and academic experts, and many Canadians argued that a broad range of online audio and video content could potentially be subject to these new regulations. Despite these concerns, the Liberals passed Bill C-11 into law in April 2023.

One of the first actions taken by the Canadian Radio-television and Telecommunications Commission (CRTC) was to require online streaming services earning $10 million or more in annual revenues to register by November 28, 2023. The CRTC argued that registration was necessary to help develop a modern broadcasting framework through greater engagement and more robust public records. 

Later, the CRTC used this framework to require online streaming services earning more than $25 million in Canada to make a base contribution equal to 5 percent of their revenues. More recently, that requirement was increased to 15 percent. The revenue was intended to support what the CRTC defines as Canadian content creators and other cultural interests through several funding programs. 

This proposed form of online taxation, often referred to as the “Netflix Tax,” generated significant criticism based on concerns about government overreach, freedom of expression, higher costs for consumers, and increased Canada-United States trade tensions.
As a result of these concerns, the Carney Liberal government has announced that it intends to eliminate the financial contribution requirement for online streaming companies that was first introduced by the CRTC. 

The decision has also drawn criticism from parts of Canada’s cultural sector and from some trade commentators, who argue that eliminating the streaming contribution requirement amounts to a capitulation to the Trump Administration. These critics contend that Canada appears to be backing away from a key element of the Online Streaming Act without any publicly announced concession in return. 

In a related move, the Carney Liberal government has announced that it will create a $600 million fund using taxpayer dollars to replace the revenue that will no longer materialize from the streaming contribution requirement. 

This is a classic example of a government dismissing concerns, proceeding with a policy anyway, and then asking taxpayers to cover the cost when it later changes course. Many Canadians may also be concerned that the new $600 million fund will be distributed in a discretionary manner that may not reflect what Canadians want to watch.

My question this week is: What do you think of the Online Streaming Act now that it has become law?

Your feedback helps me do my job. As always, you are welcome to share your thoughts on my Facebook page, by email at Dan.Albas@parl.gc.ca, or by calling toll-free at 1-800-665-8711.