Canada Drops Higher Streaming Contributions After U.S. Pressure, Will Fund Content Sector With $600 Million Instead

Canada’s government directed its television and communications regulator to withdraw a May decision that would have required large streaming services such as Netflix to contribute 15 percent of their Canadian revenues to domestic content. Culture Minister Marc Miller announced the directive and the planned investment on Wednesday in Ottawa.

The government will instead allocate C$600 million, equivalent to US$432 million, directly to the Canadian content sector.

U.S. Ambassador to Canada Pete Hoekstra for the policy to be rescinded. It also occurs while Canada and the United States discuss renewal of the free-trade agreement that includes Mexico.

U.S. Federal Communications Commission, had issued the 15-percent requirement as part of its implementation of the Online Streaming Act. Prime Minister Mark Carney said Wednesday the government examined how much the higher contributions would cost Canadians.

“It is another step to reinforce affordability for Canadians. This is not the time to raise the costs for Canadians,” he said. Hoekstra welcomed the change on social media. “American firms want to invest in Canada’s creative sector, and a fair, nonburdensome framework makes that possible,” he wrote.

U.S. designation of the Online Streaming Act as a trade irritant was not the sole factor behind the reversal. “We’re impatient to make sure that the (streaming) sector stays vital and stays supported, and that’s why we’re making that investment of $600 million Canadian (US$432 million) into the industry,” he said.

Kyle Irving, chair of the board of the Canadian Media Producers Association, said the organization was still reviewing the announcement. S. tech interests.

U.S. streamers, who make “tens of billions” from Canadians, should be required to invest in Canadians telling Canadian stories.