The federal government intends to scrap the requirement that foreign streamers (mainly US) like Netflix, Apple TV+, Paramount+, and Prime Video pay a share of their Canadian revenue into domestic content funds (CanCon), replacing that money with taxpayer funding instead.
The plan surfaced in a July 17 court filing and has since been confirmed by CBC and the Globe and Mail, after first being reported by The Wire Report.
The letter came from Department of Justice Senior General Counsel Michael Morris and went to the Federal Court of Appeal. In it, Ottawa says it intends to axe the base contribution requirement on streaming services outright and provide government funding to replace it.
That is a bigger move than the government had previously let on. Earlier public statements suggested parts of the original 5% contribution might survive in some form. The court filing makes clear the entire framework built since 2024 is being scrapped, with direct government funding for the cultural sector filling the gap while a brand-new policy direction gets written.
The CRTC set that 5% base contribution for large foreign streamers in 2024, then tripled it to 15% earlier this year, a level expected to move roughly $2 billion annually into Canadian news, French-language programming, and domestic production. Streamers took the original rule to court, and that case is still live.
The reversal comes down to trade, of course. The Online Streaming Act has become a sore point with the Trump administration over what it costs US companies. Culture Minister Marc Miller asked the CRTC in June to revisit the 15%, arguing streamers would pass the cost to Canadian subscribers, and Ottawa committed a cool $600 million in annual taxpayer funding instead to start.
University of Ottawa law professor Michael Geist, a longtime critic of the Online Streaming Act, says the reset is overdue and that the rate was never the real problem. He points out most countries land closer to 4% than the CRTC’s 15, and that the old rules never sorted out the basics, like which spending actually counts, who owns the rights to funded shows, and whether foreign streamers can pull money back out of the funds they pay into.
“Patching the old broadcast contribution system onto the Internet was never a good idea,” Geist wrote on Wednesday. He also questions whether Ottawa can legally do this the way it plans to, since a policy direction is meant for broad guidance to an independent regulator, not for cancelling a specific CRTC decision. And it won’t be quick. The direction has to be tabled in both the House and Senate, sit through a comment period of at least 30 days, and then the CRTC has to start fresh proceedings. Geist figures the system promised back when Bill C-11 passed in 2023 is still years away.
Miller’s office says streamers will still have to reinvest some unspecified amount, with the new directives are expected within weeks.
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