Before it explodes in a regulatory document that no one outside the industry reads, there is a specific type of tension that develops covertly for years. That is essentially what happened in May 2026 when Netflix, Disney+, and other US streaming services were mandated by Canada’s broadcasting regulator, the CRTC, to allocate 15% of their Canadian earnings to the creation of local content. three times the rate that existed before. Hollywood’s lobby groups began treating the announcement like a declaration of economic war barely a day after it was made.
Netflix, Prime Video, and the major studios are represented by the Motion Picture Association, which described the regulations as “unprecedented, unnecessary, and discriminatory.” The U.S. Ambassador to Canada, Pete Hoekstra, called them new trade barriers. In a direct letter to Congress, the Streaming Innovation Alliance requested that lawmakers think about imposing tariffs on Canadian exports in retaliation. For a regulatory filing, it landed with unusual weight.
The backstory that Canadian broadcasters have been dealing with for years is easily overlooked in the American response. Traditional TV companies in this country built their business model around a cross-subsidy system: entertainment revenues helped fund local news, niche programming, regional content. Then the American streamers arrived. They captured Canadian audiences, extracted advertising dollars and subscription revenues, and — until recently — sent almost nothing back into the system that produces the content those audiences actually watch when they want something that reflects their own lives. In Canadian broadcasting circles, there is a perception that this arrangement was never quite equitable.
In order to address this disparity, the Online Streaming Act was passed into law in 2023. The logic is not complicated. You should make a financial contribution to the cultural ecosystem that Canadian subscribers inhabit if you are a foreign business making billions from them. Broadcasters in numerous other nations are subject to the same rule. In certain ways, Canada was a bit late in enforcing it.
This June, Canadian Association of Broadcasters president Kevin Desjardins stated unequivocally that foreign streamers “have helped to weaken or break” the internal cross-subsidy that formerly sustained local news. He contends that these platforms ought to at least support the organizations that create Canadian news if they are not going to do it themselves. Although the political will to enforce it seems to be waning, it is difficult to find a flaw in that reasoning.
The story becomes more complicated at that point. The Carney administration was already indicating a retreat by the beginning of June. According to reports, Ottawa intends to revoke some regulations, such as those that would have directed streamer contributions to local news and specialized broadcasters that cater to Canadians with disabilities. Many interpret the reversal as an effort to ease tensions with Washington during current trade talks. The timing is noteworthy. The CRTC had just tripled the contribution requirement. Within weeks, the federal government was asking the regulator to reconsider.
For organizations like Accessible Media Inc., which produces content for Canadians with disabilities and was set to receive funding under the original framework, the policy reversal is not an abstraction. Without consistent support, the organization would probably go out of business in three or four years, according to its president, David Errington. A $600 million subsidy package has been offered by Ottawa as partial compensation; however, one-time government funding is not the same as a structural requirement incorporated into the operations of streaming platforms.
The Canadian government may sincerely think that a more lenient approach will maintain the spirit of the law while lowering trade barriers. This could also be the appearance of a retreat in need of a more attractive name. The latter appears to be the belief of Canadian broadcasters. They are clearly but cautiously opposing any rollback that would completely absolve American streamers.
The more general claim made by Canadian broadcasters is not protectionism in the conventional sense. It is more akin to a symmetry argument. Canadian businesses involved in the broadcasting system have been obligated to support Canadian content for many years. Since no one had yet figured out how to control them, the streamers were momentarily released from those same responsibilities after they took over the market. The CRTC’s May ruling was an attempt to close that gap. The answer to the question of whether Ottawa will permit it to continue will be crucial in determining whose cultural future Canada is genuinely willing to safeguard.
