Broadcasting review hears renewed calls for online streaming services to do more to fund Canadian content

Streaming services like Netflix and Amazon Prime should be required to pay their fair share toward producing Canadian content, according to some arguments filed during public consultations on an overhaul of broadcast and telecommunication regulations, which wrapped up Friday.

CBC, CRTC also call for new rules to ensure news distributed on platforms like Google, Facebook is trustworthy

A user scrolls through Netflix on a tablet. Some in the broadcasting industry are repeating calls for the streaming giant to be required to pay for original Canadian content. (Daniel Acker/Bloomberg)

Streaming services like Netflix and Amazon Prime should be required to pay their fair share toward producing Canadian content, according to some arguments filed during public consultations on an overhaul of broadcast and telecommunication regulations, which wrapped up Friday. 

In written submissions to a seven-member panel tasked with reviewing the Broadcasting Act, Telecommunications Act and Radiocommunication Act, CBC and the Canadian Radio-television and Telecommunications Commission (CRTC), also called on Ottawa to create new rules that would ensure that the news content distributed on platforms such as Google and Facebook is accurate and trustworthy.

The submissions are part of a wide-scale review that started last June. More than 100 stakeholders are taking part

CBC president Catherine Tait says the current system is not viable. Netflix is not required, for example, to contribute to the Canada Media Fund, through which broadcasters, cable companies and others help finance original productions. 

"Looking at the ecosystem, everybody's swimming in the same swimming pool, but some of the people aren't cleaning it up," Tait told CBC News. 

CRTC chairman Ian Scott says the regulator needs a different approach to regulations that would require foreign players to put more money into the Canadian system.

"It doesn't mean more regulation. It means smarter, better, flexible regulation. A new toolbox," Scott told The Canadian Press.

CBC president Catherine Tait says the current funding system is not viable. (Don Penny/Duopoly)

The panel is expected to make recommendations to the minister of innovation, science and economic development and the minister of Canadian heritage. Its final report will not come out until January 2020 ­— after the next federal election — although an interim report is expected this June.

"The revolution will be over before any new legislation comes about," said Douglas Barrett, a broadcast industry consultant and former media and entertainment lawyer.

"What we're doing is kind of examining our toenails with a microscope while the world around us is changing."

2-tiered system?

Submissions from some of the other big stakeholders weren't immediately available but will be made public after the close of the consultation process.

Broadcasters and others in the industry have long called for a so-called Netflix tax. Rogers Media president Rick Brace, for example, said last June that the industry needs a level playing field. 

"For the Netflixes of the world, to come in and not have any real responsibility — a hard, hard responsibility — to Canadian program content and funding ... creates a hardship for the domestic broadcasters," Brace said during an event unveiling the company's new TV season.

Rogers owns the Citytv stations, among other broadcasters. 

CTV's parent company, Bell Media, similarly described —  in a previous submission to the CRTC — the regulations as a two-tier system. It proposed any streaming service earning over $100 million in annual revenue contribute 20 per cent of annual revenue to Canadian programming, according to the Financial Post.

Prime Minister Justin Trudeau and former Heritage minister Mélanie Joly ​have previously spoken out against a Netflix tax. But the CBC's Tait says the appetite for it is increasing, pointing out that European countries have introduced such legislation.

International streaming companies now help finance original content in France, for example: Netflix has a two per cent tax levied on its revenue from French subscriptions, and in the case of YouTube, the tax is applied to ad revenue.

Netflix was among the stakeholders that took part in the review. Its submission hasn't yet been made public and the company did not have anyone available for an interview.

The streaming giant currently spends millions of dollars on creating broadcast productions in Canada, which, it argues, translates into jobs, tax revenues and economic activity. It has pledged to spend at least half a billion more dollars over the next five years to fund original Canadian productions. 

YouTube also pays content producers directly, based largely on audience size, regardless of where the content is produced.

Netflix has said previously it shouldn't have to pay into something like the Canada Media Fund because it can not draw from it. It also said that if it were forced to pay, the costs would likely be passed on to Canadians in the form of a higher monthly fee.

Barrett, who was chairman of the board of directors of the precursor to the media fund, the Canadian Television Fund, from 2004 to 2008, pointed out that Netflix recently increased subscriber rates in Canada by a far greater margin than what it would likely be required to contribute toward Canadian content.

He said whether the next government would be able to rally support for a tax depends on the political will and the sales job.

"Calling it a 'Netflix tax' is pretty much guaranteed to ensure that most people who don't think terribly much about the thing would be against it," he said.

With files from The Canadian Press