Large foreign video and music streaming giants are launching a campaign against Ottawa’s new mandatory levy on their Canadian operations, trying to mobilize the public in this country to oppose the charge.
The Washington-based Digital Media Association, which represents tech heavyweights such as Apple, Spotify, Amazon and YouTube, is switching on a website Monday to help amplify its criticism that this federal charge would increase costs for Canadian consumers and make music streaming services more expensive.
The levy stems from the federal government’s Online Streaming Act, which received royal assent last year.
In June, the Canadian Radio-television and Telecommunications Commission, this country’s broadcast regulator, said that as a result of the new law it would require online streaming services with $25-million or more in annual revenue, and that are not affiliated with a Canadian broadcaster, to contribute 5 per cent of those revenues to help support Canadian broadcasting.
Streaming services are required to make these mandatory contributions at the end of the 2024-25 broadcasting year, which began Sept. 1. Ottawa has estimated it will reap $200-million annually. This money, the CRTC has said, will go to local news on radio and television, “French-language content, Indigenous content and content created by and for equity-deserving groups, official language minority communities and Canadians of diverse backgrounds.”
The Digital Media Association (DiMA), which calls the 5-per-cent charge a tax, will start encouraging consumers as of Monday to visit scrapthestreamingtax.ca and use its tools to send messages to their members of Parliament opposing the levy.
The consortium argues this charge will increase the prices of streaming services and will amount to one more cost increase for Canadians already struggling with a dramatic rise in the price of housing and food.
“Canadians are already feeling the pinch from rising inflation and economic pressures. The addition of a streaming tax is an unnecessary burden,” Graham Davies, president and CEO of DiMA, said in a statement. “This tax is not only a financial strain on consumers, but it also undermines the role that streaming services have played in promoting Canadian culture and artists and enabling the music sector’s investment in talent.”
A spokesman for Canadian Heritage Minister Pascale St-Onge defended the mandatory revenue charge. “Streamers should be finding ways to step up, not step back, and collaborate with Canada’s talented creative sector,” Charles Thibault-Béland, press secretary for Ms. St-Onge, said. “Investing in Canada’s market has benefitted them for years and will even more in the future.”
The minster’s spokesman said streaming costs have been rising before the new legislation. “Streaming services have raised prices on Canadians many times in recent years well before the Online Streaming Act,” Mr. Thibault-Béland said. “While we all enjoy the content offerings of streamers, we know that having more choices that reflect Canada is better.”