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.
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The Most Unworkable Internet Law in the World: Quebec Opens the Door to Mandating Minimum French Content Quotas for User Generated Content on Social Media
The Quebec government has amended its Internet streaming legislation by removing an exemption for social media services, establishing the most unworkable social media regulation in the world with companies required to meet both French language minimum content quotas and discoverability requirements. I previously argued that Bill 109, which has now completed its clause-by-clause review, is unconstitutional, unnecessary, and unworkable. If enacted into law, it is sure to face a constitutional challenge and the prospect that streaming services such as Netflix and Spotify will either block the Quebec market or be forced to remove considerable English and foreign language content in order to comply. The result will mean less choice for Quebec-based subscribers without any requirements for more Quebec content (the law applies to French language content, not Quebec-based content).
Incredibly, the government, led on the file by Minister of Culture and Communications Mathieu Lacombe, has managed to make an awful bill even worse.
The Law Bytes Podcast, Episode 241: Scott Benzie on How Government Policy Has Eroded Big Tech Support for Canadian Culture
TikTok’s decision to pull support for multiple Canadian cultural organizations and events in light of the federal government’s decision to ban the company from operating in the country has sparked growing concern. Putting the spotlight on TikTok makes sense, but it risks missing the bigger picture which involves a steady stream of funding cancellations in response to Canadian digital cultural policy. Netflix, Meta, Spotify, Disney and others have all had their own announcements with millions lost due largely to Canadian policy.
Has Canada killed the proverbial goose that laid the golden egg on cultural support? Scott Benzie is the executive director of Digital First Canada and CEO of the Buffer Festival. He’s seen the impact first hand and he returns to the Law Bytes podcast to discuss what has been happening, identify why, and sort through the impact.
The Bill on Canada’s Digital Policy Comes Due: Blocked News Links, Cancelled Sponsorship, Legal Challenges, and Digital Ad Surcharges
Canada’s digital policy has seemingly long proceeded on the assumption that tech companies would draw from an unlimited budget to write bigger cheques to meet government regulation establishing new mandated payments. Despite repeated warnings on Bills C-11 (Internet streaming), C-18 (online news), and a new digital services tax that tech companies – like anyone else – were more likely to respond by adjusting their Canadian budgets or simply passing along new costs to consumers, the government and the bill’s supporters repeatedly dismissed the risks that the plans could backfire. Yet today the bill from those digital policy choices is coming due: legal and trade challenges, blocked news links amid decreasing trust in the media, cancellation of sponsorship deals worth millions of dollars that will be devastating to creators, and a new Google digital advertising surcharge that kicks in next week to offset the costs of the digital services tax.
CRTC Bill C-11 Ruling “Makes Web Giants Pay” But it is Canadian Consumers That Will Get the Bill
The CRTC has released its much-anticipated Bill C-11 ruling on the initial mandated contributions from Internet streaming services. The headline the Commission and government will promote is that the services will be required to contribute 5% of their Canadian revenues to support various Canadian funding programs that support film and TV production, news, and music. The decision is a perfect illustration of a sector that is too often focused on regulatory payments rather than market-based success with incredible micromanagement of funding in which the CRTC is turned into a policy funding machine of the government (no surprise that government officials spent last week calling stakeholders for advance supportive comments). For the moment, the actual contributions from Internet streaming services are ignored, an updated definition of Canadian content doesn’t exist, commercial success is irrelevant, and subsidies for the news operations of companies such as Bell and Rogers are encouraged. To top it off, the streaming services are required to pay but are unable to access the funds even as they invest in production in Canada. Bill C-11 was about “making web giants pay” and that is what the CRTC was determined to do even if it is consumers that will ultimately get the bill.
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