The CRTC yesterday released its much-anticipated Online Streaming Act decision that has been years in the making. Given the likely opposition from many stakeholders, it is virtually certain to lead to protracted trade and legal battles. From the moment the government introduced Bill C-10 in 2020, its goal was to impose regulatory obligations on Internet streaming services, treating them as online broadcasters and mandating that they pay into the Canadian system. This week’s ruling puts a number on the payments, building on an earlier 5% interim levy with an additional 10% in expenditure requirements. The combined 15% places Canada among the most expensive operating jurisdictions in the world for streaming services, with consequences that will undoubtedly affect consumer streaming prices. Moreover, with the streaming services already challenging the interim 5% levy in court, they will undoubtedly challenge this one as well. In fact, the battle will not be limited to Canadian litigation. The U.S. government, which has become increasingly vocal in its opposition to the Online Streaming Act, will view this decision as a provocation and escalate pressure on Canada to drop the legislation altogether. Culture Minister Marc Miller appeared to hedge in his reaction to the decision, suggesting that the government sees the headaches that lie ahead.

The contribution framework began with the 5% base contribution established in 2024, which is allocated toward several different funds that support Canadian content creation. The streamers do not benefit from those payments, sparking U.S. claims that they are discriminatory. This latest decision expands the payment mandate by establishing an additional 10% expenditure requirement for any streamer with $25 million or more in Canadian revenue. For the largest services with $100 million or more in Canadian revenue, the Commission goes further, prescribing how the 10% expenditure must be spent.

The press has described the change as a tripling of the cost, and in headline terms the jump from 5% to 15% is just that. However, the characterization misses what makes the additional spending so significant: the new money is not a levy but a spending requirement that mandates that the large streamers direct at least 30% of their expenditure to what the Commission calls “enhanced partnerships.” These productions exclude much of the existing spending by companies such as Netflix since they require that a Canadian hold the majority of the copyright. Further, any shortfall below 30% is allocated to the Canada Media Fund. The CRTC is also requiring that 30% of expenditures be allocated to French-language programming, half of which is original first-run content sourced from those same partnerships. This means that a sizable portion of the tens of millions the streamers already spend on film and television production in Canada does not qualify under the new regulatory requirements.

The Commission has also added discoverability and metadata obligations in a companion decision. Streamers will be expected to make Canadian and Indigenous content visible to audiences who are not searching for it, with specific commitments to be set out in later conditions of service, and to participate in building the metadata standards needed to identify and track that content. The Commission acknowledges that international promotion supports discoverability and that it already forms a significant part of the large streamers’ budgets, but it declined to credit the spending on the theory that doing so would risk diluting expenditures on the development and production of Canadian programming. The result is that the activity most likely to bring Canadian work to global audiences, the very outcome the Act claims to want, earns no credit at all.

The reaction to the ruling was immediate, with the Motion Picture Association, whose members include Netflix, Disney, Paramount, Sony, Universal, Amazon, and Warner Bros. Discovery, condemning the decision as imposing “unprecedented, unnecessary, and discriminatory investment obligations” that violate Canada’s obligations under the CUSMA and reiterating its longstanding position that the Online Streaming Act is an unfair trade practice. That is no surprise, given that the CRTC basically treated the hundreds of millions they spend on production in Canada and the significant promotion of Canadian content around the world as irrelevant. Instead, they added millions in new expenditures, while Canadian broadcasters see their costs go down. The streamers may well be joined by independent producers in criticizing the decision since it eliminates the Programs of National Interest framework, with fewer guarantees for independent producer support.

The government’s response was more curious, with Culture Minister Marc Miller saying only that the government is reviewing the changes and assessing their impacts, a striking posture for a decision that is the direct product of his own government’s legislation and policy direction, and one that arrives barely a month after Miller publicly criticized the CRTC for moving too slowly on the very same file. A government that wanted the regulator to act faster, and now treats the result as something to study from a distance, has the look of a government preparing to distance itself from what it set in motion.

The government has consistently framed these obligations as consistent with international practice, but a comparison with other jurisdictions suggests that Canada’s regulatory framework will create one of the costliest regimes. France imposes the most onerous requirements in the world, with an investment obligation of 20% of French revenue, rising to 25% for services that offer films within a year of theatrical release, on top of a levy of roughly 5% to the national film agency. But the contributions are far lower elsewhere, with most of Europe setting requirements from as little as 0.5% up to the 6% range in Spain. In fact, a Belgian proposed increase toward 9.5% by 2027 has drawn a Netflix challenge at the country’s constitutional court. Canada’s 15% is therefore well above the European norm and with tight restrictions on how the money may be spent, the streamers are left with less control over their own spending than almost anywhere else.

The streamers may pursue four possible options in response. First, a legal challenge is pretty much guaranteed. Second, the U.S. has already named the Online Streaming Act a target in the 2026 CUSMA review. This latest decision strengthens the U.S. case by reducing Canadian broadcasters’ contributions, offset by the streamers’ new payments. The net effect is that foreign companies are effectively funding a rate cut for the domestic competitors that continue to enjoy the regulatory benefits the streamers are denied. Third, the streamers may reallocate some of their existing Canadian spending into the mandated buckets to meet the requirements on paper. If so, there will rightly be questions on how much genuinely new money this produces or whether it redirects what was already being spent. Fourth, none of this comes without a consumer cost. The CRTC seems uninterested in the consumer costs of its regulatory policy, but higher prices to fund these new regulatory payments are sure to follow.

The government insisted throughout the C-10 and C-11 debate that streamers should pay their fair share, often ignoring both the consumer cost and the data pointing to massive expenditures in Canada by foreign streamers on film and television production. The bill for that choice is now coming due, and the question is whether the government will own the decision it spent years pursuing or adjust course once the inevitable trade and legal pressures become too great to ignore.