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Online streaming services will have to contribute 5% of revenue to Canada’s broadcasting system
Foreign streamers like Netflix and Spotify will have to pay five per cent of their annual Canadian revenue to support the country’s broadcasting system.
The Canadian Radio-television and Telecommunications Commission (CRTC) says this is expected to generate about $200 million every year starting in September.
The funds will go towards local TV and radio news, Indigenous content and French language content.
Some of the contributions will go to existing funds, including two per cent to the Canada Media Fund and 1.5 percent to the Independent Local News Fund.
“Today’s decision will help ensure that online streaming services make meaningful contributions to Canadian and Indigenous content,” Vicky Eatrides, the CRTC head, said Monday. “The CRTC will continue to move quickly, listen carefully, and take action as we implement the new legislation.”
The move is to help level the playing field between tech giants and cable companies as they compete for views.
The local media industry calls this move a win for Canadian culture and jobs.
However, Mohit Rajhans, a media and tech consultant, is reluctant to claim it as a win.
“I think what we’re going to end up seeing is many of these streaming companies are going to up their actual subscription costs and download these costs to the consumer,” he said.
“More often than not, most of this money ends up going into red tape when it comes to government agencies. You end up paying more money in the administration of these ‘taxes’ that are supposed to be helpful for the Canadian business and Canadian industry.”
He says the public needs to monitor who actually benefits from the five per cent mandate, and how it’s being pumped into the system.
Streaming companies like the Motion Picture Association Canada also say the mandate doesn’t factor in the contributions streaming services already make.
The association says global studios and streaming services have spent over $6.7 billion annually making quality content in Canada.
The change comes from a push from the federal regulator to modernize the country’s broadcasting system as part of the Online Streaming Act.
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