Canada Passes Legislation to Compel Foreign Streamers, Social Platforms to Finance Local Content

Canada’s House of Commons has passed Bill C-11 with an eye to raise around $800 million annually from US streamers and social media platforms as they become obligated to subsidize local Canadian film, TV and music product.

The legislation behind the streaming video and audio tax now awaits passage through the Senate upper house in Ottawa, which remains under a question mark as Canada’s governing minority government may face an election later this year and have to kill Bill C-11. A snap federal election in August 2021 terminated an earlier version of the streaming and audio tax legislation, Bill C-10.

Also known as the Broadcasting Modernization Act, Bill C-11 changes the federal Broadcasting Act to create a new “online company” category and, for the first time, regulate foreign media players active in the Canadian market.

The Canadian legislation aims to subject US tech giants and other foreign players to the same content expenditures obligations as traditional broadcasters. That would compel US digital giants that do business in Canada, like Facebook, Netflix and Spotifyto finance and market local Canadian content.

Directing domestic revenues would in turn help local Canadian creators get more of their product into the world market. That global model via US streamers and audio platforms has seen homegrown TV series like Schitt’s Creek and Kim’s Convenience find critical and commercial success when picked by Netflix, and Canadian music superstars like Drake and The Weeknd soar on Spotify and Apple Music.

The Senate Standing Committee on Transport and Communications has begun hearings on final passage of Bill C-11 into law.

On Thursday, Ian Scott, chair and CEO of the CRTC, Canada’s TV watchdog, which will referee Bill C-11 should it ever come into law, telling the Senate committee that the legislation offers “new tools” to ensure Canadian stories and music can reach audiences at home and abroad.

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