Feds Propose Changes to Broadcasting Act That May Raise $800 Million From Streamers

November 3, 2020 Updated: November 3, 2020

Online platforms like Netflix and Spotify may end up spending more than $800 million on Canadian content over the next three years under a series of policy changes the federal government has proposed in a new bill Tuesday.

The proposed changes to the Broadcasting Act are meant to ensure online streaming platforms experiencing booming revenues face as stringent regulations as traditional broadcasters, which have seen profits decline in recent years.

The changes centre on creating a new category within the Broadcasting Act for “online undertakings,” which it defined as regulations for transmitting programs over the internet.

The bill also proposes giving the CRTC new powers, which could force online steaming platforms to make Canadian content more discoverable and make financial contributions to support Canadian music, stories, creators and producers.

A technical document provided by the government estimates those contributions could reach as much as $830 million by 2023.

The bill will allow the CRTC to levy monetary penalties for non-compliance, broadcasting when prohibited from doing so or failing to submit information required.

The technical document also said the bill will likely result in the government asking the CRTC to decide which online broadcasters should be regulated and determine the merits of giving additional regulatory credits to those producing content that is “culturally desirable, but otherwise less likely to be produced, such as supporting Indigenous peoples, French-language creators and racialized and ethno-cultural communities.”

The note said the CRTC may also be ordered to look into what qualifies as Canadian content and whether that definition takes into account tax credits or intellectual property. Ensuring content reflects Canada’s diversity may also be a priority.

Even regulatory tools that would provide fair and transparent remuneration for musical artists could be analyzed, the document said.

Minister of Heritage Steven Guilbeault is expected to share more of his plans at an Ottawa press conference to be held at 1 p.m. local time.

The changes come as increasing numbers of Canadians are turning to streaming platforms like Netflix, Spotify, Amazon Prime and Crave for video and music, while turning away from traditional broadcasters.

The government’s technical note said online video services have grown their revenues by 90 per year over the last two years, while Netflix has made its way into 62 percent of Canadian households.

Netflix reported revenues of $780 million revenue in Canada in the first nine months of the 2019 fiscal year, while the CRTC said the traditional television sector saw its revenues decline on average by 1.8 per cent per year between 2014 and 2018.

On top of facing revenue declines, traditional broadcasters have also had to comply with government demands to support Canadian music and storytelling, but the streaming giants have largely been able to escape such requirements.