CanCon rules probably aren’t the thing that really gets your blood flowing (or maybe they are, we aren’t judging), but they’re taking centre stage in the Canada-U.S. trade fight.
What happened: The Motion Picture Association (MPA), the industry group representing large streaming platforms like Netflix and Disney, took a hard line against newly announced CRTC rules that would force them to spend 15% of their Canadian revenues on Canadian content.
The MPA said the rules would triple the cost of doing business in Canada, make it less attractive to operate in Canada, raise prices for customers, and violate Canada’s CUSMA obligations.
Catch up: Last week the CRTC announced that, as part of the Online Streaming Act, large streaming companies would have to spend 15% of their Canadian revenue on Canadian programming.
For streamers with more than $100 million of Canadian revenue, the CRTC also sets out rules for how the streamers can spend that money, meaning that much of what they already spend on productions in Canada won’t count toward the quota.
Why it matters: The Online Streaming Act was already a sore point with the U.S. heading into CUSMA negotiations, and this decision just moved the issue further up their list of grievances.
The powerful MPA will certainly lobby U.S. officials hard to make gutting the law a condition of any broader trade agreement.
What’s next: The streamers will almost certainly challenge the decision in court and have hinted they could raise prices for Canadian customers. The federal government, for its part, did not mount a vigorous defence of the ruling, with Culture Minister Marc Miller saying only that it was “reviewing the CRTC decision.”—TS
