Apple, Netflix Escape Millions in Canadian Content Fees — For Now

Apple, Netflix, and other streaming giants have convinced the Federal Court of Appeal to delay millions in payouts for Canadian content mandated by the Online Streaming Act — reports CHEK News.

Back in June, the Canadian Radio-television and Telecommunications Commission (CRTC) imposed a new tax on foreign streamers making more than $25 million in Canada. Affected companies are to contribute 5% of their annual Canadian revenue to support the production of Canadian and Indigenous content.

The CRTC issued the order under the Online Streaming Act (formerly Bill C-11), passed into law in 2023 as an amendment to the Broadcasting Act. It charges the regulator to update the Canadian broadcasting framework and ensure that online audio and video streamers appropriately support local content.

Apple, Netflix, Disney, and other streaming companies filed an appeal against the decision in July, which the court has since agreed to hear. A judge ruled on Monday that the streamers won’t have to make the payments — expected to be at least $1.25 million each annually — until their appeal against the streaming tax is settled.

According to the court decision, Amazon, Apple, and Spotify argued that if they make the payments before their appeal proceeds to court, they wouldn’t be able to recover the money in the event they win and overturn the CRTC’s order.

The parties have agreed to an expedited hearing schedule, with court proceedings expected to begin in June. Justice Wyman Webb said the accelerated timeline “mitigates the inconvenience arising from a possible delay in the payment,” due at the end of the 2024-2025 broadcast year on August 31, 2025.

Canada’s broadcasting and telecom regulator said in a statement that the Online Streaming Act “requires the CRTC to modernize the Canadian broadcasting framework.” The CRTC added it would “continue to balance consulting widely with moving quickly to build the new regulatory framework.”

Kevin Desjardins, President of the Canadian Association of Broadcasters, said the organization is disappointed by the decision to stall payouts but “optimistic that the Court and all parties recognize the importance of resolving these matters…expeditiously, so that urgently needed funding for Canadian news and other production can flow back into our media system next year.”

The Digital Media Association (DiMA), which represents Apple Music, Spotify, YouTube, and other music streaming services, recently launched a campaign opposing the CRTC’s streaming tax and warning it could lead to higher subscription fees. Spotify and Disney+ both hiked prices in Canada earlier this year.