On June 4, 2024, the Canadian Radio-television and Telecommunications Commission (CRTC) in a significant move to bolster Canadian content creation, issued Broadcasting Regulatory Policy 2024-121. This Policy requires foreign streaming platforms, such as Netflix, to allocate 5% of their Canadian revenue to support and promote the production of local Canadian content.[1]

The Policy which came into force on September 1, 2024, applies to video and music streaming services and excludes audiobooks, podcasts, video game services, and user generated content. It also exempted streaming services operated by or affiliated with Canadian broadcasters and online streaming service providers with annual revenue below C$25 million.[2]

Objections

As expected, key players in the industry raised objections against it stating there is no legal basis for such decision. They also stated that foreign companies have invested more in producing content within Canada and they have patronized local production companies more than the local companies who will benefit from the revenue generated. The Policy has also been described to be discriminatory and unreasonable.

These grievances made the companies under the umbrella of Motion Picture Association, Canada (MPA) to file an application before the court to review the Policy merely on two things: 

1. that the CRTC has no authority to mandate global streaming services to contribute funds to support local news production; and 
2. the CRTC is prohibited from allowing confidential information to be disclosed to others.

Implication

The Policy acquires its authority from the Online Streaming Act 2023 whose purpose is to promote Canadian local content. Hence, local content will be mandatorily supported by foreign streaming service providers. As stated by the CRTC,[3] the annual contribution to be generated from the foreign online streaming services will be distributed through the Canada Media fund, the Independent Local News Fund, Black Screen Office Fund, Community Radio Fund depending on the source of revenue, audio or visual content. 

This new imposition creates fear in many as it may reduce collaboration between foreign and local streaming service providers. There may also be a decrease in innovation and increased operational costs for companies affected.

Notwithstanding the dissatisfaction of the key players, companies will have to incorporate such contribution into their annual budget to ensure compliance with the Policy. 

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[1] Paragraph 100 Broadcasting Regulatory Policy 2024-12

[2] Paragraph 33, Broadcasting Regulatory Policy 2024-121

[3] Broadcasting Regulatory Policy, accessed via https://crtc.gc.ca.eng.archive/2024

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