Federal Lawmakers Call for Canada to Drop Its 5% ‘Streaming Tax’ As Marathon Implementation Process Plods Along

Nearly 20 U.S. representatives are reportedly calling for the Canadian government to axe its Online Streaming Act – and the law’s controversial 5% levy on global streaming platforms’ domestic revenue.

Word of this newest Online Streaming Act (aka Bill C-11) pushback entered the media spotlight in reports from CBC News and other Canadian outlets. However, we’ve been covering the controversial law in question for years now.

And while the lengthy measure (which amended the existing Broadcasting Act) contains a number of moving parts, of particular interest to DSPs is the aforementioned 5% tax. Long story short, the Canadian Radio-television and Telecommunications Commission decided on the percentage in June 2024.

“Based on the public record, the Commission is imposing requirements on online streaming services,” the entity wrote then. “Specifically, the Commission will require online streaming services that make $25 million or more in annual contributions revenues and that are not affiliated with a Canadian broadcaster to contribute 5% of those revenues to certain funds.”

Unsurprisingly, that didn’t sit right – and isn’t sitting right –with Spotify, Amazon, YouTube, Apple, or Pandora, which voiced their opposition via the Digital Media Association (DIMA). December 2024 saw a court pause the streaming tax, and related challenges have kept the marathon implementation process going into the current year.

Now, as initially highlighted, federal lawmakers are likewise taking aim at the 5% payment requirement, which will theoretically bankroll Canadian content.

(More on the capital’s destination in a moment; we explored the 5% charge’s proposed distribution framework, but questions remain about what constitutes Canadian media.)

According to CBC News, 18 Republican lawmakers – among them Representatives Lloyd Smucker and Ron Estes – called out the Online Streaming Act in a letter to officials including Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent.

Amid broader U.S.-Canada trade negotiations, the reps, all Ways and Means Committee members, reportedly criticized the law and its 5% tax as “discriminatory” against American companies.

Time (and wider tariff talks) will tell whether their stance fuels an Online Streaming Act rollback; as many know, the digital services tax has already been dropped. Furthermore, worth reiterating here is that the Act was adopted under Canada’s previous government. Additionally, some companies as well as professionals don’t appear too thrilled with the measure and/or its implementation realities.

Regarding major streamers’ qualms, the CBC indicated that even “a Netflix production entirely made and developed in Canada may not be included” in the law’s definition of Canadian content. And the Globe and Mail elaborated that “there are no C-11 funds being set aside for Telefilm, the federal agency that supports so much of Canada’s film sector.”

Meanwhile, the Information Technology & Innovation Foundation, citing Spotify’s post-streaming-tax price increases in France, argued in early 2025 that Canadian consumers themselves will ultimately cough up the 5% streaming fee.