Law would force streaming services to support CanCon
OTTAWA—Heritage Minister Steven Guilbeault says he does not expect forcing streaming services to pay as much as $830 million annually to support Canadian content will lead to higher subscription costs for customers.
Guilbeault proposed Tuesday that popular streaming services like Netflix and Spotify kick in hundreds of millions of dollars to help produce Canadian film, television and music.
Traditional broadcasters are already obliged to fund the production of Canadian content, but international streaming services — which account for an increasingly large share of the entertainment market in Canada — are not, although some do voluntarily.
That would change under the Liberals’ proposed Bill C-10, which would give the Canada Radio-communications and Television Commissioner (CRTC) the power to demand he companies contribute to Canadian content production.
Guilbeault argued the costs will not be passed on to streaming customers, because the change simply makes mandatory what the companies were already doing voluntarily.
“We’re not asking these companies to do something that they’re not already doing. They’re already investing in Canada,” he said.
“What we’re doing is we’re putting a regulatory framework on how these investments should be made in light of things we’re already asking from Canadian broadcasters.”
Guilbeault said the European Commission has had similar content requirements in place since 2018 — 30 per cent of a streaming service’s catalogue must be European content — and suggested that hasn’t resulted in higher fees for customers.
Netflix originally bristled against the quota, but is complying. Requiring streaming companies to contribute to Canadian content was one of the immediate actions prescribed in the Yale report, a government-commissioned review into Canada’s telecommunications and broadcasting regime released earlier this year.
The commission, led by former broadcasting executive Janet Yale, also called on the government to require foreign online service providers to start charging GST/HST. Asked about the Liberals’ re-election pledge to start taxing internet giants Tuesday, Guilbeault deferred to Deputy Prime Minister Chrystia Freeland.
“I’m the minister of heritage. I’m not the minister of finance,” Guilbeault said, but pointed to the Liberals’ recent throne speech that referenced cracking down on “tax avoidance” by internet giants.
For years the Liberal government has suggested they would bring in regulations for internet and tech giants that have beac life but have also contributed to the difficulties facing traditional media.
Media advocates and companies, including the Toronto Star’s parent company, have urged the government to “level the playing field” between traditional media and companies like Facebook and Google, which control 80 per cent of online advertising in Canada.
But the legislation tabled Tuesday specifically excludes social companies and content uploaded by users, and does not address internet giants’ near-monopoly on digital advertising. Nor does it impose taxes on foreign internet giants — something the Liberals promised in their 2019 re-election platform.
“We’ve been waiting for years for this legislation to come forward, we’ve been waiting for years for the government to actually act and protect media in country,” said Heather Mcthis Pherson, the New Democrats’ critic for heritage, in a press conference Tuesday.
“It’s hugely concerning when … we’re watching an election that’s happening to the south of us today (where) the impact of the web giants have had on that democracy is huge. And there’s nothing in this that’s holding our web giants, the web giants (operating) in Canada, to account.”
Guilbeault told reporters Tuesday that more legislation addressing internet giants — and specifically companies like Facebook and Google — is coming soon.
“There are a number of things that we’re not addressing today that were in the Yale report,” Guilbeault said.
“We are working on other elements of changes, of modernization to the Canadian ecosystems, but these elements will come further down the road … (We want) to look at another category of web giants, not the same one we’re talking about today, but Facebook and Google and their impact on the Canadian media ecosystem.
“We are working on tabling a bill to tackle that issue very, very soon.”