Canada imposes 5% tax on Netflix, Spotify and HBO to reinforce local content

The Canadian Radio-television and Telecommunications Commission (CRTC) announced this week that the services of streaming that operate in Canada will contribute 5% of their Canadian revenues to support the national broadcasting system, the public broadcaster said. CBC. This measure aims to increase funding for local and indigenous broadcasting, as well as French-language content and content from different communities.

“Today’s decision will help ensure that streaming contribute significantly to Canadian and indigenous content,” said Vicky Eatrides, president of the CRTC.

The measure follows a law passed last year designed to ensure that the giants of the streaminglike Netflix, help Canadian culture in a more substantial way.

The Canadian Minister of Heritage, Pascale St-Onge, highlighted the fairness of the system, stating that “the CRTC’s decision will help stimulate investment in Canadian content†. The Government says this legislation will promote Canadian music and stories while supporting employment. Funding will be directed to local productions, French-language content and content created by official language minority communities and groups that deserve equity.

According to the Quartzthe new rule applies to streaming that generate at least 25 million dollars (22.9 million euros at current exchange rates) in revenue in Canada and are not associated with a Canadian broadcasting organization. Income from podcast services, video games and audio books are exempt.

Although organizations such as the Canadian Media Producers Association (CMPA) applauded the CRTC’s decision, critics were concerned about the potential repercussions for consumers.

“If we take five percent of revenue and say it has to go into this fund, it seems likely that we will have to raise prices to stay competitive,†Michael Geist, a law professor at the University of Ottawa, explained to CBC.

The Motion Picture Association Canada (MPA), which represents members such as Netflix and Disney+, expressed its disappointment with the decision.

“We are disappointed with today’s decision that reinforces a decades-old regulatory approach designed for cable companies,†MPA-Canada President Wendy Noss said in a statement. “Today’s discriminatory decision will make it more difficult for streamers global companies to collaborate directly with Canadian creatives and invest in stories made in Canada for audiences here and around the world.â€

Amazon Prime Video also expressed its concerns, with a spokesperson mentioning the potential negative impact on Canadian consumers. Apple TV+ and Spotify did not immediately respond to requests for comment, Quartz explained.

According to CBC, Canada’s measure aligns with similar regulations in other countries, such as France, which in 2021 determined that streamers allocate 20 to 25% of revenues to the creation of European and French content. The CMPA, along with 20 other film organizations around the world, had previously called for stricter regulation of streaming companies to ensure the creation of local content.


Francesco Giganti

Journalist, social media, blogger and pop culture obsessive in newshubpro

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