A Regulatory Framework Dies in a Court Letter
On July 17, 2026, Department of Justice senior general counsel Michael Morris sent a letter to the Federal Court of Appeal that quietly closed the book on one of Canada's most contested tech-policy experiments. Responding to a question from Justice David Stratas about whether Ottawa's policy reversal could moot the ongoing streamer litigation, Morris wrote that "the Government's intention is to eliminate the base contribution requirement on streaming services and to provide government funding to replace those contributions" (Michael Geist, The Wire Report). That single sentence terminates two years of CRTC rulemaking under the Online Streaming Act (Bill C-11) and confirms Canada will fund Canadian content through direct appropriations rather than mandated payments from Netflix, Disney+, Amazon, Apple and Spotify.
From 5% to 15% to Zero
The framework being abandoned had escalated fast. In June 2024, the CRTC's Broadcasting Regulatory Policy 2024-121 required streaming services with $25 million or more in annual Canadian revenue to devote at least 5% of that revenue to funds supporting local news, French-language content, Indigenous programming and equity-deserving creators — an estimated $200 million a year (crtc.gc.ca, CRTC 2024-121). Streamers sued immediately, and the Federal Court of Appeal stayed the 5% payment obligation that December pending the litigation.
Rather than retreat, the CRTC escalated. Its May 21, 2026 Broadcasting Regulatory Policy 2026-96 raised the total Canadian Programming Expenditure requirement for large unaffiliated streaming groups to 15% of Canadian online revenue — folding in the original 5% base contribution — while cutting traditional broadcasters' obligation from the 30-45% range down to 25% (CRTC 2026-96). Industry estimates put the 15% tier's revenue potential in the billions annually. Amazon, Apple, Spotify and the Motion Picture Association-Canada kept fighting it at the Federal Court of Appeal.
Ottawa blinked first. On June 3, 2026, Minister of Canadian Identity and Culture Marc Miller directed the CRTC to "review and revise" its May decision and announced $600 million per year in federal funding to backstop the audio and audiovisual sectors — explicitly to prevent streamers from passing contribution costs on to subscribers (Government of Canada). The July 17 court letter goes further than that June announcement: it confirms the base contribution requirement itself — the entire mechanism, not just the 15% escalation — is being eliminated, with a new CRTC policy direction due "in the coming weeks."
Steelmanning the Contribution Framework
The policy rationale behind C-11's contribution model was not frivolous. Foreign streamers earn substantial revenue from Canadian subscribers while facing none of the Canadian-content obligations that broadcasters like CBC, CTV and Global have carried for decades — obligations that fund local news, French-language production, and Indigenous storytelling in a market too small to sustain much of that content on pure commercial logic. A contribution requirement, in principle, closes a genuine competitive asymmetry between regulated incumbents and unregulated new entrants, and it does so without drawing on general tax revenue. Cultural sector groups are right that a legislated, predictable levy is structurally more durable than an annual budget line that a future government can zero out in one fiscal cycle.
Why the Reset Is the Right Call Anyway
That said, the CRTC's execution proved the deeper problem with the model: a regulator with the discretion to set contribution rates has every incentive to keep raising them, and did — tripling the effective ask from 5% to 15% within two years, entirely through its own rulemaking, with no legislative check in between. That is not proportionate regulation; it is a regulator testing how much a captive class of foreign firms will absorb before litigating. The predictable results were two years of stayed litigation, zero dollars actually collected from the disputed base contribution, and a chilling signal to any platform considering deeper investment in the Canadian market.
Taxpayer-funded support, for all its discretionary fragility, has real advantages the levy never delivered: it doesn't risk being passed through to subscriber bills during an affordability-sensitive political moment, it doesn't require years of court battles to actually flow, and it lets Parliament — not an unelected regulator — decide the size and durability of the commitment through the normal appropriations process, which is more accountable, not less. If cultural groups want durability, the fix is legislating funding levels, not handing a regulator open-ended rate-setting power over a handful of global firms and hoping it exercises restraint.
What Comes Next
The Federal Court of Appeal litigation is not formally resolved — Morris's letter promises updated status reports rather than a withdrawal — but with the government itself telling the court the underlying rules are being scrapped, the case is headed toward mootness. The CRTC's forthcoming policy direction, expected within weeks, will show whether Ottawa treats this as a narrow retreat on streamers specifically or a broader signal that the Online Streaming Act's implementation needs a structural rethink beyond just who pays.