The Canadian Radio-television and Telecommunications Commission (CRTC) this week ordered foreign streaming companies, such as Netflix and Spotify, to pay 5% of their revenues earned in Canada.
These sums — $200 million per year, estimates the CRTC — will be redistributed in particular for the production of local news on radio and television. The CRTC also promises to support “French-language content, indigenous content and content created by and for groups deserving of equity, official language minority communities.”
Members of the US Congress and trade associations have expressed concerns about the mandatory contribution, which they say discriminates against American companies. Some associations have even raised the idea of imposing retaliatory measures.
The U.S. Embassy in Ottawa said it is closely monitoring developments regarding this Online streaming law.
The new mandatory contribution was introduced as part of a regulatory process aimed at having the CRTC implement this Liberal government law.
“The United States shares Canada’s interests in the robust broadcasting and information industries, but (the online broadcasting law) appears to target American companies to disproportionately serve the interests of large Canadian companies “, said an embassy spokesperson in a written statement.
“We encourage Canada to consider the input of American stakeholders when implementing this law.”
The law, passed in Parliament a little over a year ago, aims to level the playing field between “web giants” and “traditional broadcasters”, who already contribute largely to Canadian content.
But according to Tiffany Smith, vice-president of the National Foreign Trade Council of the United States, the CRTC underestimates the investments that American television and film production companies are already making in Canada. These investments include the transfer of technology and training, to “contribute to building” Canadian cultural industries, according to her.
However, Ms. Smith deplores that from now on, American companies are required to “finance even more the work of people in another country, which is one of our most important allies and trading partners”.
“It’s really a new world that we’re looking at in terms of foreign companies signing up for programs that the Canadian government has traditionally funded.”
There are provisions in the Canada-United States-Mexico trade deal that would allow the U.S. government to retaliate and seek compensation if it wanted to, Smith argued. “On the other hand, I cannot assume what the government would do,” she declared.
Federal Trade Minister Mary Ng insisted throughout the legislative and regulatory process that this law was consistent with trade rules.
A spokesperson for the U.S. Trade Representative said his office was reviewing the regulations and would continue dialogue with Canadians.
