Earlier this month, the government shocked the culture sector by announcing it was effectively reversing the CRTC decision that implemented the Online Streaming Act. Culture Minister Marc Miller tried to cushion the blow with a promise of $600 million in support for the audio and audiovisual sectors, but there was no escaping the anger from some over abandoning a policy that had been years in the making. Weeks later, it is still not clear what precisely the government intends to do. In fact, it is increasingly evident that there is no plan, with the government improvising on critical issues such as the implementation of the reversal, funding for news, and the eventual contribution requirements for Internet streamers.

First, the government’s reversal is not easy to implement, and a time crunch is quickly emerging. There are streamer payments due this summer, but there is no clear mechanism to put them on hold, since the government lacks the authority to vacate a CRTC contribution decision. Miller has indicated that a new policy direction to the Commission will be forthcoming, but the Broadcasting Act sets out a process for doing so that is neither fast nor optional. The minister must consult the Commission, publish the proposed direction in the Canada Gazette, present it to both the House and Senate, and allow a comment period of at least thirty days, with the order finalized only after the comment period closes and the proposal has been tabled. When the government issued its last such direction for this same bill, the draft appeared in June 2023, and the final order did not take effect until late November. That leaves some streamers owing money this summer under a regime the government has announced it will replace, but may be unable to do so for months. The obvious way to relieve the pressure would be to lean on the CRTC to suspend its own decision, but doing so would have major implications for the Commission’s independence.

Second, there are mixed signals about news funding, starting with whether streamers are paying for it. This has been controversial from the outset, with the streamers arguing that they have no connection to news and should not have contributions allocated toward it. In fact, the Motion Picture Association of Canada has challenged a CRTC decision requiring streaming platforms to contribute to local news in Canada, arguing that the Commission lacks authority to require them to support local news and that this was not envisaged when Bill C-11 was going through Parliament.

The government has been all over the map on the issue. Miller told the Globe and Mail earlier this month that local news would receive some of the $600 million that it plans to allocate as a replacement for streamer contributions. But this week, a Miller spokesperson told the Toronto Star that “we intend to direct the CRTC to eliminate base contribution requirements that are directed outside the audio-visual sector to the broader cultural ecosystem – requirements with which broadcasters and streaming services have no direct connection and that have been tied up in the courts.” That sounds like the government wants to stop allocations to the news sector after all, and is illustrative of a government that can’t keep its story straight on its plans, perhaps because it isn’t really sure what to do.

The third, and perhaps biggest, issue is the streamer’s contribution itself. To be clear, setting the rate is the CRTC’s responsibility. But the government is clearly unhappy with the Commission’s decision and wants to see a rate more in line with most European countries. The CRTC’s 15% was at the very high end of the spectrum (only France and Italy are higher), with 2-4% closer to the global average. Netflix has offered up 2%. For its part, the government doesn’t have a number, with Miller telling both the Globe and Star that it won’t be zero.

If all of this sounds familiar, it is because it is starting to look a lot like the Online News Act mess, where the government insisted it would not negotiate payments for news links, only to end up negotiating them with Google. In this instance, the process seems to suggest that the government is moving toward negotiating a contribution rate with the streamers, which will be incorporated into its future policy direction to the CRTC. Miller himself signalled as much, acknowledging that the conversation with the streamers “has yet to occur in any developed form.” This is, to put it mildly, a terrible approach to policy that reflects a government that has painted itself into a corner with a badly constructed law and knee-jerk response to external pressure on the eve of trade negotiations.

The reality is that the percentage contribution alone is only part of a larger set of concerns that include what payments and investments count toward a mandated contribution, who owns the rights to the film and television that is produced, whether foreign streamers are eligible to access funding for their productions, and how the discoverability rules will be implemented. And that is just a handful of the substantive issues. The procedural issues are even more challenging, since the policy direction, inevitable CRTC hearings, and likely legal challenges will take many years to unfold. The government once promised close to a billion dollars a year from its law within a couple of years of its introduction. Years later, the government is improvising a $600 million-a-year handout of taxpayer dollars to compensate for a failed policy that it still has seemingly little idea how to fix.