Spotify, Apple, Netflix to Fight CRTC CanCon Tax in Court

Apple, Amazon, Spotify, Netflix and other global streaming platforms are challenging a federal order that would force them to contribute millions toward Canadian content and local news production.

The case, which will be heard by the Federal Court of Appeal in Toronto, focuses on a 2024 decision by the Canadian Radio-television and Telecommunications Commission (CRTC). That order requires major online platforms to pay 5% of their annual Canadian revenues into funds that support domestic programming—including 1.5% earmarked for local journalism.

The streamers argue the CRTC is overreaching, according to a report by the Globe and Mail. In court documents, Spotify likened the payment to an unauthorized tax, while Apple and Amazon called the rules unfair for targeting foreign-owned services with over $25 million in Canadian revenue. They also took issue with paying more than local radio broadcasters, who only contribute 0.5%.

The Motion Picture Association – Canada, which represents companies such as Netflix, Paramount, Disney+, and Warner Bros. Discovery, is contesting the portion of the order tied to news funding. It says the CRTC failed to explain why streamers with no role in journalism should be responsible for propping up local broadcasters.

A temporary halt to the payments was granted by the court in December, after companies argued that they wouldn’t be able to recover the funds if the ruling was later struck down.

The federal government and the Canadian Association of Broadcasters are backing the CRTC. They argue that streaming services have disrupted traditional media without contributing financially to Canada’s cultural system. Without regulatory changes, they say, legacy broadcasters will continue to shoulder an unequal burden.

The legal battle comes as the CRTC rolls out its expanded powers under the Online Streaming Act—part of a broader effort to bring global platforms under Canadian regulation. The case has also raised concerns about potential trade tensions between Canada and the U.S.

Last month during related CRTC hearings, the Motion Picture Association called for more flexibility, saying its member companies already invest in Canadian productions voluntarily. Canadian broadcasters, meanwhile, are calling for equal rules across the board—suggesting all platforms contribute at least 20% of their Canadian revenue.

Canada is following in the footsteps of the EU, UK and Australia for regulating local content. You have to wonder–why does Canada have CanCon, when an equivalent doesn’t exist in the United States?