A Reversal on the 'Netflix Tax'
The federal government is preparing to scrap the so-called "Netflix tax" — the financial contribution requirement the CRTC placed on major streaming services under the Online Streaming Act — and replace it with direct public funding for Canadian content, according to a new court document reported by CBC News.
The policy, introduced in 2023, required streaming platforms like Netflix, Disney+, Amazon Prime Video and others operating in Canada to contribute a percentage of their Canadian revenues toward funding domestic film, television and music production. Streamers pushed back hard against the requirement, arguing it unfairly targeted foreign platforms while duplicating obligations already carried by traditional broadcasters.
What's Changing
According to the court filing, the government now intends to "eliminate" that mandatory contribution model altogether. In its place, Ottawa says it will fund Canadian content creation through direct government spending rather than requiring streamers to redirect a cut of their revenue.
The move comes amid ongoing legal and political friction over how far Canada can — or should — go in regulating global streaming giants. Streaming companies have argued in court that the CRTC's funding formula treated them inconsistently compared to Canadian broadcasters, and some threatened further legal challenges if the requirement remained in place.
Why It Matters
The Online Streaming Act was billed as a way to ensure foreign streaming platforms contribute to Canadian storytelling the same way conventional broadcasters have for decades — funding local film, TV and music production through mandated levies. Scrapping the contribution requirement in favour of direct government funding effectively shifts that financial burden from streaming companies' balance sheets onto public coffers.
Supporters of Canadian content policy will be watching closely to see whether the new funding model can match or exceed what the streamer contribution scheme would have generated, since the size and structure of the government's replacement funding commitment isn't yet fully detailed in the document CBC reviewed.
Critics of the original policy, meanwhile, may see this as a validation of arguments that regulatory contribution mandates were the wrong tool for supporting Canadian film and TV — though it also raises questions about whether taxpayers, rather than multinational streaming companies, should be footing more of the bill for homegrown content.
What's Next
Details on how the new public funding model will be structured, how much money will be allocated, and which programs or organizations will administer it have not yet been made public. As the legal proceedings referenced in the court document continue, more specifics are expected to emerge about how Ottawa plans to replace the streamer levy without leaving a gap in support for Canadian creators.
For now, the shift signals a notable change in direction for federal cultural policy — moving away from requiring Big Tech streaming platforms to directly bankroll Canadian content, and toward a model funded through public spending instead.
Source: CBC News
