Trudeau’s government ruled: Web broadcasters such as Netflix, Disney +, Spotify, Apple TV +, Apple Music and Crave will be regulated henceforth and will have to fund Canadian content from their proceeds in Canada. While they will be encouraged to invest in Francophone programming, Internet broadcasters will not be given specific quotas to fund Francophone programming.
Once the bill is passed, the Trudeau government will direct the Canadian Radio, Television and Communications Commission (CRTC) to impose a funding burden on Internet broadcasters equal to the burden of television channels, which allocate 25% to 45%. Of their revenue to financing Canadian programs.
By applying this rule, we get to fund 830 million a year in 2023 from Internet broadcasters. For comparison, TV channels invested $ 3 billion in Canadian programming in 2018.
In the bill it submitted Tuesday, the Trudeau government chose not to impose funding / production quotas in the strict sense of the word on Internet broadcasters. Instead, Ottawa will give directions to the CRTC to pay special attention to French and indigenous production.
What I don’t like about stakes is that your bottom line quickly becomes your maximum. Can be more than 25% [du financement total qui va à la production francophone]. There is no reason […] To the maximum [le financement] In proportion to the population. There will be incentives. For example, one of the scenarios that the CRTC could choose is to put in place a mechanism in which one dollar invested in francophone content could count $ 1.5 in expenditures. [en financement de contenu canadien] Canadian Heritage Minister Stephen Gilbolt said in an interview with Journalism.
This regulatory reform has been awaited for broadcasting in Ottawa for several years. “Internet broadcasters who operate outside the regulatory framework and make use of the system without any obligation to contribute […], It does not work. […] “We must make sure to preserve our sovereignty, to create works that resemble us and bring us together,” Stephen Gilbault said at a news conference Tuesday.
The opposition wants changes
While ADISQ describes this law as a “giant leap,” opposition parties see several “loopholes” in it, particularly to ensure adequate funding for French-language productions by global giants such as Netflix and Spotify.
“There must be signs. This is clear in our eyes. It is not true that the government is unable to set quotas.” “We want the culture of Quebec to be taken into account and protected in the new legislation,” said Bloc member Martin Champox. The National Party also criticized the bill.
With the Trudeau government in the minority in the House of Commons, it will have to count on the support of some opposition parties to pass its bill in the coming months.
The bill does not specify the level of funding required of Internet broadcasters. It would be up to the CRTC, the independent regulator already in charge of radio, television and telecommunications, to make that decision. However, the federal government may give it general directions (for example, interest in French language production or indigenous production).
In addition to the directive for funding French-language production, the Trudeau government indicated Tuesday that it will require CRTC to require “discoverability” requirements for Internet broadcasters, who will have to display a certain number of featured French-speaking and Canadian content on their websites.
In 2017, the Trudeau government and Netflix reached an agreement under which Netflix would commit to spend $ 500 million on production in Canada within five years. The agreement did not include a quota for francophone content. Netflix spent that amount in Canada over two years. In 2019, 62% of households in the country subscribe to Netflix, which generates $ 1 billion annually in revenue in Canada.
The bill also stipulates that the CRTC will be able to impose financial penalties on companies that do not comply with its regulations. This is a long-standing request from CRTC.
Since 1999, Internet broadcasters and digital media have taken advantage of the regulatory exemption from the CRTC.
Facebook and Twitter are not subject to it
Social networks such as Facebook and Twitter, as well as users of these social networks, will not be subject to the new regulations for Internet broadcasters.
However, social networks such as Facebook and YouTube will be subject to rental or purchase services for movies or TV shows or to a paid music service.
Ottawa said digital media will not be subject to the new regulations.
Also, the bill introduced on Tuesday does not provide for the collection of goods and services tax by foreign broadcasters such as Netflix. Ottawa has indicated that it intends to act in this direction, but that it wants to wait for an international tax reform on the digital economy before doing so.