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Why Canadian Streaming Rules Are Being Challenged by Global Video Streaming Giants

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Major global streaming companies are contesting new Canadian regulations requiring them to contribute financially to local news, labeling the government’s actions as unreasonable and lacking legal justification.

The Canadian Radio-television and Telecommunications Commission (CRTC), Canada’s national broadcasting regulator, mandated in June that prominent online streaming services must allocate 5% of their Canadian revenues to bolster the domestic broadcasting sector, including news production.

The Motion Picture Association-Canada, representing giants like Netflix (NFLX.O), Walt Disney Co (DIS.N), and others, has filed legal applications in federal court seeking leave to appeal the regulations and requesting a judicial review. They argue that the CRTC has not substantiated its decision to impose financial obligations on foreign online platforms for news production.

“The decision lacks any rationale for forcing foreign online entities to contribute to news creation,” stated the association in its legal filings, emphasizing that the CRTC’s directive is unjustifiably burdensome.

The CRTC defended its stance, outlining that the funds would address critical areas within the broadcasting system, including local news across radio and television, as well as content in French and Indigenous languages. The regulator refrained from comment due to the ongoing legal proceedings but has projected that the new rules, set to take effect in September, will generate approximately C$200 million ($146 million) annually.

This measure aligns with legislation enacted last year, aimed at ensuring that online streaming services promote Canadian music and narratives, while also supporting employment opportunities within Canada’s creative industries.

Streaming platforms covered by the MPA-Canada include those operated by Paramount, Sony (6758.T), NBCUniversal, and Warner Bros Discovery.

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