The government’s Budget 2026 made culture a major focus, with headlines trumpeting billions in spending and a potential new personal income tax credit for creators. One aspect that should not get lost is a major reversal in how the government regulates large Internet platforms. For most of the past decade, the government’s approach to Internet platforms rested on a single idea: making web giants pay. That approach underpinned both the Online Streaming Act, which required streamers such as Netflix, Amazon and Disney to fund Canadian content, and the Online News Act, which required Google and Meta to fund Canadian journalism by paying for linking to the news. Budget 2026 confirms that the strategy has been largely abandoned, replaced by taxpayers footing the bill with roughly $1.5 billion in new or renewed support for culture and news in this budget alone, including $600 million in streaming-related funding budgeted for only one year, half a billion in journalism labour tax credits, most notably an extension to broadcasters such as Bell, Rogers, Corus and Quebecor, a permanent doubling of the Local Journalism Initiative, and another two-year renewal for CBC.

Both digital laws failed in foreseeable ways. The Online Streaming Act never really got out of the gate, as the CRTC’s 2024 contribution decision was tied up in the courts for years and, when the Commission announced a 15 percent Canadian programming spending requirement for streamers (which included the existing 5 percent base contribution), the government quickly announced that it would issue a new policy direction to unwind the decision and provide $600 million per year to the audio and audiovisual sectors instead. Meanwhile, the Online News Act led to a $100 million annual deal with Google and Meta’s decision to block news links. The CRTC’s auditor’s report last month on the first year of spending revealed some recipients lamenting that they “made more money before the removal of news on some social media platforms.” Moreover, $60 million of the Google money was paid out before any claims were verified, leading to efforts to recapture some of the invalid payments.

The budget confirms the $600 million but does not detail how it will be allocated and includes funding for only a single year. The June announcement said the investment would be adjusted once the new CRTC rules are finalized, which may point to a future policy direction that includes a reduced mandated contribution by streamers, or it may mean that the money is transitional for a single year with industry expected to curb its enthusiasm for new regulatory sources of funding. Given that the budget references keeping Canadian content “accessible and affordable”, it seems clear that the 15 percent contribution initially set by the CRTC is not coming back.  That said, the absence of details on how the $600 million will be allocated or on the specifics of the policy direction months after announcing the policy continues the trend of spending money to paper over the absence of real policy decisions.

The new government contributions to the media sector are larger, more permanent, and more problematic from a policy perspective. In April, I flagged a largely unnoticed line in the Spring Economic Update that opened the door to extending the Canadian Journalism Labour Tax Credit to broadcasters. The Canadian Association of Broadcasters made the extension its top pre-budget submission recommendation, and its president told Cartt the credit would be worth about $100 million a year to its members (primarily Bell, Rogers, Corus, and Quebecor). The lobbying effort worked as the government is expanding the credit to “qualifying private audio and audiovisual news organisations” at the enhanced 35 percent rate and the $85,000 per-employee cap. The definition of a newsroom employee has been amended to cover recording, editing, and presenting news bulletins and segments. Moreover, the increased amount for print and digital news outlets, which was scheduled to revert back to the initial 25 percent in January, has been extended at the higher rate to the end of 2028.

The combined cost is $501 million over five years and $85 million ongoing, with the permanent cost of broadcaster eligibility alone exceeding the $71 million the entire program paid out to about 3,000 journalists in 2024. The budget says the extension was “informed by” a stakeholder consultation, which ran alongside a separate Canadian Heritage consultation on direct media supports that I wrote about last month. That consultation was never publicly posted, was circulated to existing funding recipients, and predictably produced a wish list for more money. In other words, the government asked

The Local Journalism Initiative, funded at $20.8 million this year, receives $134 million over four years and $41 million ongoing, which turns a program that once started as a temporary measure with smaller news outlets in mind into a permanent one that is double in size. CBC/Radio-Canada receives $300 million over two years, continuing the $150 million annual top-up. Add in benefits from the Canada Periodical Fund, and there are few Canadian news organizations, private or public, print or broadcast, that do not benefit from direct federal support, with the largest groups drawing on several programs simultaneously.

I have long argued that this dependence creates a press independence problem, and the budget makes it worse. Government dependence is everywhere: it now covers up to 35 percent of eligible newsroom salaries at every major broadcaster, it struck a deal for $100 million more from Google, and it provides millions more through the Local Journalism Initiative. And the money is now there for everyone, with millions for Bell, Rogers, Corus, Quebecor, Postmedia, Torstar, and more. As the companies become inextricably linked to government, they are less likely to criticize their funding sources.

Further, it won’t end here as the government did not give in to some of the sector’s demands such as changes to the tax treatment of advertising on digital platforms or guaranteeing public ad dollars on Canadian media outlets. That merely guarantees more lobbying and demands for even more direct or indirect public dollars.

The Online Streaming Act and the Online News Act were pitched as ways to make foreign platforms fund Canadian culture and news. Budget 2026 shows that the government has stopped believing its own policy, replacing platform contributions with taxpayer dollars, directing much of it to the companies that lobbied the loudest, and leaving its largest funding programs to be renewed by the same government the recipients are supposed to hold to account.