By Howard Law, author of MediaPolicy.ca, and Canada vs. California: How Ottawa took on Netflix and the streaming giants (Lorimer, 2024)
Prime Minister Mark Carney recently granted the New York Times an hour-long interview about where he is taking Canada.
Canadian journalists, who would have loved that kind of access to the prime minister, were irked. What ever happened to Canadians telling Canadian stories?
But to heck with cultural irony. There’s an American audience to be educated about Canada.
An interesting item that emerged from the Times coverage was Carney’s candour about Canada’s warming relationship with the European Union. According to the reporting, Carney is well aware of the EU’s economic anemia and does not see a future in which the EU is more important to Canada than the US economy.
But Carney touts the value in trade diversification and stronger geopolitical bonds with Europe. What might interest Cartt readers is his illustration of the point with a cultural policy issue:
“Strategic capability, independence, Canada, Europe, we win because we’re going to build that out. There’s more. There’s a lot to this. That’s yes, economic, and actually cultural. And I wouldn’t downplay — not that you did — the cultural side of it, cultural sovereignty, cultural independence. We’re not going to be threatened. The Europeans aren’t going to tell us what we have to put on our landing pages of Netflix or Spotify or whatever, and that stuff matters.”
Carney is referring to his red line in Canada’s trade talks with the US, which collapsed on August 21. During those talks, American negotiators pushed hard against Canada’s regulatory ruling that online streaming services promote Canadian cultural content more prominently for Canadian consumers.
Somewhere, Bloc Québécois chief Yves-François Blanchet is having a chuckle over Carney’s EU comment.
When Blanchet got his first crack at Carney during the fall opening of parliamentary question period, he chose to ask the prime minister why, given the big emphasis on our relationship with the EU, he had done some very non-European things like rolling back our Digital Services Tax in June 2025 and a year later scrapping the CRTC’s ruling on cash and investment commitments required of US streamers operating in Canada.
In other words, Blanchet wanted to know why Carney is not lining up behind the EU on higher expectations of US Big Tech and Hollywood studios?
In response, Carney brushed off Blanchet’s question. But given that Carney is overdue to provide a cabinet directive to the CRTC to revisit the streamer regulations that he voided in June, it is an opportunity to look under the hood and ask what the EU has done on streamer regulations.
When the Carney policy direction to the CRTC appears in the Canada Gazette, it probably will deal with at least three major elements.
The first will be Carney’s nixing the CRTC’s 6.5 per cent of revenue cash contributions by streamers to CanCon financing, the biggest slice going to the Canada Media Fund.
Although the government’s messaging has gone back and forth over the summer on this point, the latest news report is that Carney is committed to zero cash contributions. That is probably what he promised Netflix CEO Ted Sarandos in their late May meeting in a New York City hotel room that preceded his June 3 order voiding the CRTC’s ruling.
Of equal impact to the nullified cash contribution is the CRTC’s ruling on direct streamer investments in original Canadian shows either commissioned or licensed to appear on their own services. The CRTC set them at 8.5 per cent of streamer revenues. Here too, Carney wiped the slate clean, at least for now, with no inkling of another figure.
Lastly, the CRTC set high expectations on the visibility and findability of Canadian shows on streamer services through home screen location, enhanced search tools and recommendations. The commission expressly rejected the streamer habit of setting up “Canada” or “Quebec” screen tabs as inadequate. Carney appears prepared to leave this CRTC order intact as his comment in the Times interview suggests. The CRTC’s boldness on prominence was the issue the Trump administration raised on the last day of trade talks in August.
Those three crucial regulatory markers have their equivalents within the EU framework for streamers, which I will get to momentarily. Some of the other issues that Carney’s policy direction might cover off are:
- Whether Carney wants the CRTC to go further in demanding more shows and movies with iconic Canadian themes. The natural policy companion to this reconsideration would be a rethink of the commission’s abolition of minimum obligations to finance Canadian television dramas.
- The PM might ask the CRTC to review where it landed on streamers hiring a senior Canadian producer and Canadian ownership of copyright when they invest in Canadian content.
- If the PM has any interest in keeping the peace in the broadcasting industry, he will ask the CRTC to reconsider the modest regulatory relief the commission granted to Canadian broadcasters, reducing their CanCon spending from 30 per cent to 25 per cent of revenue. That left a big gap between Canadian broadcasters and the foreign streamers’ aggregate cash and investment obligation of 15 per cent. Alternatively, the peace is kept by raising the bar for the streamers north of the 15 per cent.
Back to our European comparisons, their regulatory scheme began in 2018 when the EU set a baseline requirement for streamers to maintain a video catalogue of at least 30 per cent European works and to make them prominent on their services.
The heavy regulatory lifting, however, was left to the 27 member states at their own legislative discretion. Over the next few years this led to a spate of nation-specific requirements for Netflix and other streamers, such as cash contributions, direct investments in shows with national content and languages, and prominence measures such as home screen exposure, enhanced search engine tools, and recommendation algorithms.
Netflix and the other Californian streamers saw a wide range of regulatory outcomes among the EU states, charted by the European Audiovisual Observatory.
Among EU nations, France has the biggest regulatory footprint by some margin.
Above the baseline EU requirement that streamers maintain a 30 per cent European catalogue, France requires a 5.15 per cent of revenue cash levy and a benchmark 20 per cent investment in French shows. It has the highest expectations of national content prominence of any European country. In theory those prominence expectations include the streamer deployment of personalized recommendations that make French shows more visible, but it remains optional for streamers and does not appear to be a point of contention between the French regulator and the streaming services.
Italy has also taken steps to build national content rules on top of the requirement for a 30 per cent European catalogue. Seventy per cent of that European catalogue must be Italian. There is a direct investment rule of 18 per cent of the streamers’ Italian revenues, similar to France. But unlike Canada and France, there is no cash contribution to production financing funds.
Then there is Denmark. With a dominant public broadcaster DBC and a publicly owned commercial service TV2 providing national content, Denmark has lower expectations for the streamers than do France or Italy. It has a five per cent cash levy. But streamers can knock that down to 2 per cent if their direct investment in Danish content exceeds 5 per cent of revenues.
The European Observatory dashboard charts how many other European nations have built in additional streamer requirements above the 30 per cent baseline catalogue. Significantly, the CRTC did not show any interest in a Canadian catalogue requirement although the Quebec legislature’s Bill 109 proposes to do so for that province, assuming it has the constitutional power to regulate streaming at all.
Meanwhile, the Observatory dashboard makes it clear that cash levies, the “streaming tax” that Carney appears to be ruling out for Canada, are not the norm in Europe even though they are permitted.
France has a big one (5.15 per cent), but the other EU nations that have even exercised their cash option have clustered around 2 per cent. Perhaps it’s a coincidence, but when Netflix appeared before the CRTC in November 2023, its spokesperson grudgingly conceded that a 2 per cent cash levy was acceptable to Netflix provided none of it went to news. The representative of Disney Plus chimed in with a “ditto.”
Netflix has now retrenched from the 2 per cent, it seems, as Carney rolled back the CRTC’s 6.5 per cent to zero after meeting with CEO Sarandos in late May.
With Trump running the trade talks with Canada, streamer objections to the CRTC’s plan for prominence regulations emerged as one of the deal breakers on the last day of negotiations in August. If Carney thought he had appeased Netflix by repealing the CRTC’s ruling, it did not work. As CMPA President Reynolds Mastin commented later, “knowing those players as we do, they were not going to say, ‘Thank you very much. We’re done.’ They were only going to regard [Carney’s rollback of the CRTC ruling] as the appetizer.”
It is possible that an emboldened Netflix is looking at the UK as their regulatory benchmark, or lack thereof.
The post-Leave UK is neither an EU member nor a participant in its regulatory framework. In 2025, the Labour government firmly rejected a parliamentary committee’s recommendation of a five per cent streamer cash levy (sound familiar, Canada?).
The UK’s delivery of national content differs from Canada. The public broadcaster BBC is funded by mandatory household subscriptions at three times per capita the rate of CBC’s parliamentary funding. The Beeb has a 25 per cent share of the “first choice” audience (Netflix is at 26 per cent). Similar to Denmark, the BBC also has a cultural ally in Channel 4, the publicly owned but commercially funded broadcaster that makes many popular British dramas.
In priming its gusher of nationally iconic dramas, the UK system benefits from the scale and national ownership of a large production enterprise in BBC Studios. Canada’s CBC by comparison contracts out almost all of its entertainment production to independent producers, by federal policy design.
At the other end of Netflix’s benchmarking exercise is France with its regulatory sandwich of a high cash levy, investment requirements, and prominence expectations with real bite.
And a further idiosyncratic, but crucial feature of the French regime for streamers is the insistence on the historically protected window for exclusive theatrical releases, a point of cultural pride for the French.
Even though France has met the streamers halfway by relaxing its 36-month rule for delaying post-theatrical replatforming of films, it still requires a free and clear window for theatrical first release. It is something that the streamers loathe.
The French regulatory scheme allows streamers to reduce the exclusive theatrical release to as little as a six-month window, tied to streamer investments in French content. But Netflix and France have done nothing but quarrel over the counting of investment dollars and, as a result, Netflix is pegged to a 17-month waiting period to get French shows onto its platform. Meanwhile, the French regulator has launched new expectations that streamers will introduce more documentary, animation and concert recordings into its investment strategy.
If Netflix and their Hollywood comrades are in fact benchmarking Canada against other regulatory regimes, and the comments made by Netflix and Disney Plus before the CRTC suggest that this is exactly what they do, then the UK and France represent opposite ends of the spectrum.
In the UK, no regulator is bothering the streamers. Across the channel, the streamers no doubt believe, the French regulator is grinding them. So long as the Trump administration is backing the streamers against Canada, their path is clear to them.
For now, we await the Carney policy directive to the CRTC. Is there a deal already struck between the prime minister and the streamers, perhaps in that New York City hotel room? Or is an understanding being negotiated as we speak? And if so, how does the prime minister communicate its contents to the CRTC through a policy direction that cannot legally instruct the independent regulator on specifics?
On the other hand, perhaps Carney is prepared to give leeway to the CRTC, the independent regulator, to chart a new regulatory course somewhere within the very large gap between the French coast and the Albion cliffs of Dover.
Screenshot of Prime Minister Mark Carney at the Canada Investment Summit last month
