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The Conservatives called on the Liberals Thursday to “reject” the CRTC’s recent decision tripling streamers’ financial contributions, but the government says it doesn’t have that power.
The broadcast regulator said last week large online streaming services must contribute 15 per cent of their Canadian revenues to Canadian content.
Conservative MP Rachael Thomas put forward a motion in the House of Commons calling on cabinet to use its powers under the Broadcasting Act to reject that increase.
The motion says the cost will “be passed on to consumers who are already struggling with the rising cost of living,” will discourage investment in Canada and will act as a trade irritant with the United States.
But Kevin Lamoureux, parliamentary secretary to the government House leader, replied that the government doesn’t have that authority.
The Broadcasting Act only allows the federal cabinet to set aside CRTC decisions if they involve broadcast licences. It gives cabinet the ability to set aside or refer back to the commission a decision made “under section 9 to issue, amend or renew a licence.”
The decision on financial contributions doesn’t fall under that provision, Culture Minister Marc Miller’s office confirmed. Miller said last week the government was “reviewing” the decision.
Monica Auer, executive director of the Forum for Research and Policy in Communications, said the current Broadcasting Act does not allow the government to overturn the CRTC’s financial contribution decision.
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Auer said in an email it is “not a licensing decision and consequently cabinet cannot overturn it.”
She said the CRTC’s ruling on financial contributions for foreign streamers can’t be interpreted as a licensing decision because the CRTC is prohibited from issuing licences to non-Canadian applicants.
The CRTC’s decision has drawn criticism from the Motion Picture Association, the U.S. group representing streamers like Netflix and Amazon, which has called on cabinet to “reconsider” the current approach.
Later in the afternoon in the House of Commons, Thomas pointed to the powers the government has to guide CRTC policy.
Under the Broadcasting Act, the government is able to issue a general broadcast policy direction to the CRTC.
In 2023, the government issued a policy direction to the CRTC setting out how to implement the Online Streaming Act. The CRTC said in last week’s decision that it was guided by that policy direction.
Auer said if cabinet wanted to issue a policy direction saying the CRTC shouldn’t implement last week’s decision, it would have to cancel that 2023 order, which “still binds the commission.”
She said that process would be “tricky and time-consuming.”
Conservative Leader Pierre Poilievre said in the House of Commons his party wants to “fight this latest Liberal tax hike.”
“To give Canadians a break, let them choose freely what they like to watch when they are at home recreating with their families. Let’s get rid of the Netflix tax,” he said.
In a post on X, NDP MP Heather McPherson accused the Conservatives of “taking up the cause” of U.S. web giants and U.S. President Donald Trump and said their motion would put an end to CRTC levies that support Canadian media and artists.
“NDP believe in making the ultra-wealthy and giant corporations pay their fair share,” she said.
The Bloc Québécois said the idea behind the financial contributions was to establish fairness in the cultural system.
Bloc MP Alexis Brunelle-Duceppe accused the Conservatives of wanting to make concessions on culture during the upcoming trade negotiations with the U.S. and Mexico. He also pointed out the government eliminated a three-per-cent digital services tax after the U.S. took issue with the policy but has not yet seen any benefits from that move.
The U.S. ambassador to Canada also took aim at the policy Thursday and called for it to be rescinded.
Pete Hoekstra said he met with U.S. streaming companies who “stressed the (CRTC’s) Online Streaming tax will drive away investment and job creation in Canada’s creative sector.”
“This unfair tax will drive up costs for Canadian consumers and targets U.S. companies. This law should be immediately repealed,” he said in a post on X.
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