By Paul Vieira

OTTAWA--Canada's broadcast regulator said Thursday it intends to increase the level of financial payments that big U.S. online streamers must contribute to local programming--a move that threatens to further strain trade talks between Ottawa and Washington.

In the meantime, the Canadian Radio-television and Telecommunications Commission has agreed to reduce the financial obligations of traditional, over-the-air domestic broadcasters toward the production of local programming.

The decision in essence shifts the onus on financing local Canadian programming to the big U.S. streaming companies, as the broadcast regulator deals with the upheaval in how Canadian households consume media. The regulator said the funding model "that underpins the Canadian broadcasting and production system cannot and should not rest entirely on Canadian broadcasters."

Peter Menzies, a former senior official at the CRTC, said Canadian authorities are now "locking in the broadcasting system's financial dependence" on U.S. companies "to keep Canada's film, television and music industries subsidized."

The move is also likely to intensify trade tensions between the U.S. and Canada, as U.S. Trade Representative Jamieson Greer has identified Canada's rules regarding online streaming as discriminatory. The removal of these rules--now revised to increase the financial burden on streamers--is likely to be sticking point in U.S.-Canada talks aimed at renewing the terms of the U.S.-Mexico-Canada trade treaty, which at present allows the bulk of Canadian exports to enter America duty free.

The USTR did not respond to a request for comment. Streaming companies--among them Netflix, Disney, Amazon.com, and Apple--referred questions to Motion Picture Association--Canada. A spokesman for MPA's Canadian unit did not immediately reply with a comment.

A spokeswoman for BCE, which owns the CTV network, said the company was reviewing the decision. Representatives for Rogers Communications, another major broadcaster, did not immediately respond to a request for comment.

The regulatory decision marks the latest step in the effort by Canadian authorities to implement a law introduced by former Prime Minister Justin Trudeau that would compel foreign streaming services and digital platforms to make a bigger contribution to Canadian programming, and prominently showcase Canadian programming to users in the country.

The CRTC ordered streaming companies in 2024 to contribute 5% of their revenue from Canada to local programming. The CRTC said it is increasing that level to 15% of streaming revenue. Meanwhile, big, domestic, over-the-air broadcasters will contribute 25% of their sales to Canadian programming--a reduction from their current obligation of up to 45% of revenue.

MPA-Canada is in court to block efforts by the CRTC to compel streamers to hand over 5% of their domestic revenue. Scott Shortliffe, the regulator's vice-president of broadcasting, said the CRTC is confident in its case before Canada's Federal Court of Appeal. "In the meantime, we're going forward in establishing these policies."

Menzies, the former regulator, said should Canada win its court case and the 15% levy is finalized, "the cost of streaming subscriptions for consumers will almost certainly increase by a noticeable margin."

Shortliffe said the increased contributions would help fund local programming, in particular productions in French and indigenous languages. The promotion of French culture is particularly important for the current federal Liberal government, as its majority in parliament can be attributed to winning over Quebecers in last year's election.

Still, the CRTC is likely to have reverberations in the White House and Congress. Some members of Congress are backing a bill that urges the USTR to take retaliatory measures against Canada.

"I think this is decision is certain to lead to more litigation and trade battles," said Michael Geist, an internet law expert at the University of Ottawa. He added the decision to scale Canadian broadcasters' regulated payments "is the sort of thing that gets the USTR's attention."

Write to Paul Vieira at paul.vieira@wsj.com,

(END) Dow Jones Newswires

May 21, 2026 17:37 ET (21:37 GMT)

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