Global streamers fight CRTC’s rule requiring them to fund Canadian content

Article content

OTTAWA — Some of the world’s biggest streaming companies will argue in court on Monday that they shouldn’t have to make CRTC-ordered financial contributions to Canadian content and news.

Article content

The companies are fighting an order from the federal broadcast regulator that says they must pay five per cent of their annual Canadian revenues to funds devoted to producing Canadian content, including local TV news.

Article content

Article content

The case, which consolidates several appeals by streamers, will be heard by the Federal Court of Appeal in Toronto.

Article content

Article content

Apple, Amazon and Spotify are fighting the CRTC’s 2024 order. Motion Picture Association-Canada, which represents such companies as Netflix and Paramount, is challenging a section of the CRTC’s order requiring them to contribute to local news.

Article content

Article content

In December, the court put a pause on the payments _ estimated to be at least $1.25 million annually per company. Amazon, Apple and Spotify had argued that if they made the payments and then won the appeal and overturned the CRTC order, they wouldn’t be able to recover the money.

Article content

In court documents, the streamers put forward a long list of arguments on why they shouldn’t have to pay, including technical points regarding the CRTC’s powers under the Broadcasting Act.

Article content

Spotify argued that the contribution requirement amounts to a tax, which the CRTC doesn’t have the authority to impose. The music streamer also took issue with the CRTC requiring the payments without first deciding how it will define Canadian content.

Article content

Amazon argued the federal cabinet specified the CRTC’s requirements have to be “equitable.”

Article content

It said the contribution requirement is “inequitable because it applies only to foreign online undertakings and only to such undertakings with more than $25 million in annual Canadian broadcasting revenues.”

Article content

Article content

Apple also said the regulator “acted prematurely” and argued the CRTC didn’t consider whether the order was “equitable.” It pointed out Apple is required to contribute five per cent, while radio stations must only pay 0.5 per cent — and streamers don’t have the same access to the funds into which they pay.

Article content

The CRTC imposes different rules on Canadian content contributions from traditional media players. It requires large English-language broadcasters to contribute 30 per cent of revenues to Canadian programming.

Article content

Motion Picture Association_Canada is only challenging one aspect of the CRTC’s order — the part requiring companies to contribute 1.5 per cent of revenues to a fund for local news on independent TV stations.

Article content

It said in court documents that none of the streamers “has any connection to news production” and argued the CRTC doesn’t have the authority to require them to fund news.

Article content

“What the CRTC did, erroneously, is purport to justify the … contribution simply on the basis that local news is important and local news operations provided by independent television stations are short of money,” it said.