Canada to drop streaming tax, fund content with taxpayers

The Canadian government intends to eliminate a mandatory financial contribution from large foreign streaming services and replace it with taxpayer funding, according to a court filing made public this week. The move represents a significant reversal of a policy designed to fund domestic cultural production under the Online Streaming Act.

In a letter dated July 17, the Attorney General's office informed the Federal Court of Appeal that the government's intention is to eliminate the base contribution requirement on streaming services and to provide government funding to replace those contributions. The letter was submitted as part of ongoing litigation launched by streaming companies challenging the original rule. The disclosure confirms a broader policy shift than the government had indicated last month, when it directed the Canadian Radio-television and Telecommunications Commission (CRTC) to review its own decision.

The CRTC first imposed a 5% base contribution on large foreign streamers in 2024, requiring them to pay a share of their Canadian revenues into funds supporting Canadian content, including news and French-language programming. Earlier this year, the regulator...