OTTAWA — Culture Minister Marc Miller has pulled the plug on new rules that would have required streaming services like Netflix and Disney to put 15 per cent of their Canadian revenues toward Canadian productions.

The Canadian Radio-television and Telecommunications Commission announced last month that it would dramatically increase what large streaming services must pay from five per cent to 15 per cent as part of the implementation of the Online Streaming Act, a law passed in 2023 to force streaming platforms to help pay for Canadian content.

The decision was met with criticism from streaming platforms, policy experts and U.S. President Donald Trump’s ambassador to Canada, who said it constitutes a trade barrier. 

On Wednesday, Miller told reporters that the government doesn’t “agree entirely with the CRTC decision.” A release issued by Miller’s department said the ruling would impose higher costs on streaming services that could be passed on to Canadian customers. 

The minister doesn’t have the power to simply change the CRTC’s ruling. Instead, his department will issue new policy guidance to the regulator that emphasizes keeping services affordable and ensuring flexibility for streaming platforms and Canadian broadcasters. 

In effect, that means the CRTC will have to go back to the drawing board on a decision that took years to reach.

The new policy directive will be far more prescriptive than the previous direction the government gave to the CRTC, and will explicitly set the amount the government thinks streamers should pay, said a senior government official, who briefed The Logic on the condition they not be named. It will also ensure that, if they wish, streamers may spend all the money they dedicate to Cancon producing content, rather than contributing to government-mandated funds.

The change doesn’t entirely remove the streamers’ obligation to contribute to Canadian content, Miller said, but the requirements must be reasonable.

Miller’s intervention comes just a day after Canada-U.S. Trade Minister Dominic LeBlanc met with his U.S. counterpart Jamieson Greer in an effort to spur talks to renew Canada’s trade pact with the U.S. and Mexico. 

The Motion Picture Association, an industry group that represents U.S.-based streaming platforms like Netflix, Amazon Prime and Disney, said the CRTC’s demands violate Canada’s obligations under the Canada-United States-Mexico Agreement (CUSMA). The Online Streaming Act is also high on the U.S. government’s list of trade grievances with Canada, and U.S. Ambassador Pete Hoekstra said the regulator’s order made a bad situation worse.

Miller acknowledged the blowback from the U.S., but said “it would be disingenuous” to suggest that it is the only reason Canada is changing its policy. 

The Canadian Media Producers Association worries Miller’s decision is an indication that the federal government has “sold out Canadian culture in favour of big U.S. tech interests,” Kyle Irving, chair of the association’s board of directors, said in a statement. “The free ride for the big U.S. tech giants must end.”

Just weeks ago, the minister chided the CRTC for moving too slowly to implement the Online Steaming Act. On Wednesday, Miller restated that sentiment, saying he’s impatient for Canada’s struggling audiovisual industry to receive much-needed support. 

In 2024, the regulator made an interim order that required streaming companies to pay five per cent of their Canadian revenues into a series of funds to support Canadian content and news. That base contribution was expected to bring in $200 million per year, but the payments have been held up as the companies fight the order in court.

“While we’re waiting for that money to come out, hundreds of millions of which is frozen in litigation, the industry is suffering,” Miller said. The government will funnel $600 million per year into the production industry to tide them over until new, permanent rules are in place, he said. 

Drafting a new policy will be messy, said Monica Auer, executive director of the Ottawa-based Forum for Research and Policy in Communications, because there’s no quick mechanism for the government to overturn the CRTC’s policy decision. Once the government issues a new policy directive the public will have 30 days to weigh in. 

Miller said his department is still working on the new directive it will issue to the CRTC, and the regulator would not say how long it might take to issue new rules under the new guidance. In a statement, spokesperson Mirabella Salem said the CRTC would review any new policy directions as they are released. 

This story was updated to include additional details and comment.