CRTC Hits Online Streamers Like Netflix, Spotify with New Fee

The CRTC has announced significant progress in implementing the Online Streaming Act, formerly known as Bill C-11.

The Act, which amends the Broadcasting Act, mandates the CRTC to update the Canadian broadcasting framework and ensure that online streaming services such as Netflix and more, contribute to Canadian and Indigenous content.

Following the adoption of the new legislation, the CRTC released a regulatory plan and initiated four public consultations, including one on the financial contributions required from online services to support the Canadian broadcasting system.

During the consultation on contributions, the CRTC says it received over 360 detailed submissions and conducted a three-week public hearing with more than 120 groups.

This is why we passed the Online Streaming Act and the Online News Act ⬇️ pic.twitter.com/twhb4vOQQk

— Pascale St-Onge (@PascaleStOnge_) May 30, 2024

Based on these consultations, the CRTC is mandating online streaming services that make $25 million or more in annual contributions events and are not tied to a Canadian broadcaster, to pay 5% of these revenues to the broadcasting system, starting in the 2024-2025 broadcast year, starting on September 1, 2024.

The new contributions will affect both online video and audio streaming services.

The CRTC says this imposed fee will bring in an estimated $200 million annually towards Canadian content.

“Today’s decision will help ensure that online streaming services make meaningful contributions to Canadian and Indigenous content. The CRTC will continue to move quickly, listen carefully, and take action as we implement the new legislation,” said Vicky Eatrides, Chairperson and Chief Executive Officer of the CRTC, in a statement on Tuesday.

Below is breakdown of the 5% fee and how it will be spent on Canadian content:

Fees collected from audio-visual online streaming services will go to the following funds:

• 2% to the Canada Media Fund and/or direct expenditures towards certified Canadian content;
• 1.5% to the Independent Local News Fund;
• 0.5% to the Black Screen Office Fund, the Canadian Independent Screen Fund for BPOC creators, and/or the Broadcasting Accessibility Fund;
• 0.5% to the Certified Independent Production Funds supporting OLMC producers and producers from diverse communities; and
• 0.5% to the Indigenous Screen Office Fund.

Fees imposed on audio online streamers will go to the following funds:

• 2% to FACTOR and Musicaction;
• 1.5% to a new temporary fund supporting local news production by commercial radio stations outside of the designated markets;
• 0.5% to the Canadian Starmaker Fund and Fonds RadioStar;
• 0.5% to the Community Radio Fund of Canada;
• 0.35% to direct expenditures targeting the development of Canadian and Indigenous content and/or a variety of selected funds; and
• 0.15% to the Indigenous Music Office and a new fund to support Indigenous music.

We’ve reached out to Spotify and Netflix for comment and will update this story accordingly.

What do you think about this new fee imposed on audio and video streaming services? Sure, these companies will pay, but will also likely hike prices. Spotify has already said in the past the Online Streaming Act would force it to possibly increase prices. So in other words, Canadian customers will be paying the fee if prices go up. Thank you, CRTC.