U.S.Lawmakers Challenge canada’s Online streaming Act
A group of 18 right-wing politicians from the United States is taking aim at Canada's newly introduced Online Streaming Act. They are pushing to dismantle this legislation as part of ongoing trade negotiations.
The Purpose Behind the Online Streaming Act
This controversial law requires major foreign streaming platforms, including Spotify, Netflix, and Disney+, to contribute five percent of their Canadian streaming revenues to support local arts. However, there remains uncertainty about how much these companies actually earn in Canada.
A Canadian judge estimated that each major streaming service would need to pay approximately $1.25 million annually. Yet, according to a report from the CRTC, the total revenue generated by this act could reach $200 million each year. This suggests that individual contributions might be substantially higher than initially thought.
Estimating Revenue Contributions from Major Streamers
To illustrate potential earnings, let’s consider Netflix. Estimates suggest that between five and eleven million Canadians subscribe to its service.If we assume around seven million subscribers paying an average fee of $13 monthly, Netflix could be generating over $100 million in revenue from Canadian users alone. This would imply a contribution of roughly $5 million towards supporting local arts and media.
While Netflix is likely the largest player in this market, other services like Disney+ and Paramount would also have financial obligations under this act. Even if they collectively contribute a few hundred million dollars,it could significantly benefit Canadian industries.
How Funds Will Be Allocated for Local Content Creation
The funds collected will directly support various aspects of local media production and news creation in Canada. The distribution plan includes two percent going towards the Canadian Media Fund (CMF) or direct spending on certified content; 1.5 percent allocated for the Independent Local News Fund; 0.5 percent for both the Indigenous Screen Office and Black Screen Office; another portion directed toward BPOC creators through the Canadian Independent Screen Fund; plus 0.5 percent for remaining independent production funds certified by Canada.
The impact on Music Streamers as Well
the CRTC's website outlines similar funding structures specifically aimed at music streamers and how their contributions will assist Canadian musicians.
The Economic Context: U.S.-Canada Trade Relations
A report featured on Billboard.com highlights claims made by U.S lawmakers stating that video-on-demand services contributed around $70 billion to America's economy last year alone—on top of an additional $14 billion generated by music streaming services like Spotify or Apple Music.
This context suggests that many streamers likely have sufficient resources available to comply with Canada's new regulations without meaningful strain on their operations.
Caution Over Price Increases for Consumers
though, some Canadians express concern regarding potential price hikes resulting from these new requirements imposed on streamers.
An example cited by Lawrence Zang notes how “in response” to France's recent music tax increase last year,
Spotify raised its subscription prices across all plans accordingly.”
This trend raises alarms since Spotify had already increased prices in Canada last year while hinting it was due partly because of upcoming changes related directly tied back into implementing provisions outlined within this act itself!
A Shift Away From Digital Service Taxation?
Additonally noteworthy is Canada's recent decision concerning its own digital service tax targeting large American corporations such as Meta or Google.
This cancellation sets a precedent suggesting further adjustments may occur regarding laws affecting arts funding initiatives too!
A letter sent out from U.S officials labeled these regulations as “digital trade irritants,” according to reports published via CBC News .If anything can be gleaned here then perhaps it indicates willingness among parties involved negotiating terms surrounding tariffs moving forward!
And don't forget! NoveByte might earn a little pocket change when you click on our links, helping us keep this delightful journalism rollercoaster free for all! These links don’t sway our editorial judgment so you can trust us! If you’re feeling generous support us here!.
