Gatineau, Quebec, Canada. Photo Credit: Andrijko Z.
Following ample criticism from on-demand music and video platforms, the Canadian government has walked back its controversial “streaming tax.”
Minister of Canadian Identity and Culture Marc Miller just recently announced the regulatory pivot as well as a fresh funding package for the sectors. To bring the uninitiated up to speed, the short-ish version is that lawmakers in 2023 passed the Online Streaming Act, thereby establishing a streaming service fee framework that would, in theory, bankroll the production of Canadian media.
But the affected platforms have rather unsurprisingly been pushing back against the plan from the outset. And pressing questions remain about exactly which projects would be considered Canadian under the stringent law.
Meanwhile, U.S. lawmakers have also called out the streaming tax as “discriminatory” against American companies. The likes of Spotify and Apple Music were staring down a possible 5% levy on their Canadian revenue, and as of late May, video giants such as Netflix and Prime Video were facing an even steeper 15% fee.
Now, the distinct possibility of streaming price increases has prompted a change: Minister Miller has directed the Canadian Radio-Television and Telecommunications Commission (CRTC), the entity behind the law’s implementation, “to review its recent decision” about the 15% video tax.
“The CRTC’s new requirements would impose new costs on the companies providing these services, which could ultimately fall on Canadian consumers through higher prices,” the government spelled out in a release. “At a time when Canadians face cost-of-living pressure, now is not the time to make culture and entertainment more expensive.”
Closer to the present, the government is poised to deploy “federal investments” totaling C$600 million (currently $432 million) “per year to provide stability and immediate support to Canada’s audio and audiovisual sectors.”
Time will tell what the CRTC’s implementation process will look like from here; DMN reached out for additional information last month, and the commission told us that it “cannot comment on [the] future decision” concerning the music streaming tax.
Furthermore, while the CRTC already has a “broadcasting modernization work” schedule planned into 2027, the government is developing “new policy directions to adjust the implementation of the Online Streaming Act.”
At the top level, those directions will aim to keep streaming “services affordable for Canadians” and prioritize “flexibility for both online streamers and Canadian broadcasters,” according to the announcement.
In any event, Digital Media Association (DIMA) president and CEO Graham Davies voiced support for the government’s “commendable willingness to listen to the concerns of the digital industry, creators, and everyday consumers.”
“DIMA and its member companies remain fully committed to working collaboratively with the government, the CRTC, creators, and stakeholders across the cultural sector to ensure Canadians continue to have access to the music they love while supporting a vibrant and sustainable Canadian music ecosystem,” said Davies, whose association counts as members most of today’s leading on-demand music platforms.
