American streaming platforms have been ordered to direct 5 percent of their Canadian revenues into local content production.

The ruling from the CRTC, the country’s TV and telecoms regulator, follows Canada’s Bill C-11, or Online Streaming Act, coming into law in 2023 as it imposed first-time rules and regulations on foreign streaming platforms like Netflix, Spotify and Disney+ operating north of the border.

The foreign digital platform revenues will go to a range of public and private funds for investment in Canadian and indigenous content. That includes the Canada Media Fund, the Black Screen Office Fund and the Indigenous Screen Office Fund.

The CRTC in a ruling unveiled Tuesday said it will require online streaming services making $25 million or more in Canadian revenues and which are not affiliated with a Canadian broadcaster to contribute 5 percent of those revenues to local content funds, starting on Sept. 1, 2024.

The CRTC estimate around $200 million annually in new funding from the foreign digital platforms will go towards local content in both video and audio production. “This base contribution decision sets the foundation for meaningful participation by online streaming services in the Canadian broadcasting system,” the CRTC said in its ruling.

Compelling local American streamers to put dollars into homegrown films, TV and music product has been applauded by Canadian content creators. 

“This decision demonstrates a strong commitment to the sustainability and growth of our film & television production sector, leveling the playing field and positioning Canada alongside other jurisdictions that have adopted measures to protect their cultural sovereignty and bring their broadcasting systems into the digital age,” Directors Guild of Canada president Warren P. Sonoda said in a statement.

But major studios and streamers represented by the Motion Picture Association – Canada rejected the CRTC ruling imposed on foreign streamers as backwards-looking.

“We are disappointed in today’s decision that reinforces a decades-old regulatory approach designed for cable companies. Today’s discriminatory decision will make it harder for global streamers to collaborate directly with Canadian creatives and invest in world-class storytelling made in Canada for audiences here around the world,” Wendy Noss, president of the Motion Picture Association – Canada, said in her own statement.

In the run-up to passing Bill C-11, American video and audio streamers convinced Ottawa to create a two-tier Canadian industry where foreign players will be allowed to use fewer local creators, like directors and screenwriters, than traditional broadcasters already have to as part of their regulatory obligations.