Netflix will no longer sponsor several arts institutions involved in Canadian film and television productions in response to the Liberals’ Bill C-11, also known as the Online Streaming Act.
The company cut funding to a host of training and development initiatives last week that it had been investing in since it established a presence in Canada in 2017.
Netflix had been helping to advance the careers of over 1,200 Canadian writers, directors, producers and performers over that period, investing more than $25 million domestically.
The decision comes as a response to being compelled by the Canadian Radio-television and Telecommunications Commission to contribute 5% of its annual domestic revenues to support Canadian screen productions under the Online Streaming Act imposed by the Trudeau government.
“The CRTC moved ahead with Bill C-11 mandated streamer payments without addressing issues such as what constitutes Cancon and what existing payments will be counted as contributions. This was the inevitable response: Netflix pulls millions in sponsorship,” said law professor and Canada Research Chair in Internet and E-commerce Law Michael Geist in a post to X.
Netflix said in a statement “despite our long-standing commitment, the government has chosen not to acknowledge our substantial support for the Canadian film and TV sector. Consequently, we will be unable to continue funding many of the programs that have come to rely on our backing, as we are now required to allocate resources to meet the CRTC’s new investment mandate.”
The streaming service is not alone as the Motion Picture Association-Canada, an industry group representing them and other major American companies who produce and distribute content in Canada like Walt Disney, Warner Bros. Discovery, and Paramount Global productions launched dual legal challenges in Federal Court over the CRTC measures in July.
According to the group, the CRTC “acted unreasonably” in imposing this requirement.
“The CRTC’s decision to require global entertainment streaming services to pay for local news is a discriminatory measure that goes far beyond what Parliament intended, exceeds the CRTC’s authority, and contradicts the goal of creating a modern, flexible framework that recognizes the nature of the services global streamers provide,” said Wendy Noss, president of the Motion Picture Association Canada in a statement this summer.
Geist said the “multiple legal and trade challenges, Netflix cancelling sponsorships, Facebook blocking news links, and Google adding digital ad surcharges” shouldn’t come as a surprise because they’re the result of “repeated warning signs” which were simply “ignored.”
The CRTC held a public hearing last November where Netflix vice-president of global public policy Dean Garfield asked that the Trudeau government offer some flexibility in how it defines contributions to the local sector.
“If you develop a system that limits the areas or the funds to which those resources are directed, then in some respects you’re creating a zero-sum game where you may have to move away from the relationships, partnerships that we built over time, and we certainly don’t want to do that,” said Garfield at the time.
Executive director of the Whistler Film Festival Society Angela Heck said that Netflix has been a supporting partner of their festival for over five years, contributing up to 50% of its funding.
However, it now stands to lose producers and screenwriter labs as a result of Netflix’s decision.
“They’re just responding to the ambiguity of the current legislation,” Heck told the Globe and Mail. “I think it’s not clear under current guidelines whether or not something like training initiatives are eligible expenditures. Maybe we don’t do a good enough job tooting our own horn as to how important these programs actually are.”