US Ambassador Calls for Immediate Repeal of Online Streaming Tax

U.S. Ambassador to Canada Pete Hoekstra has called for Canada to repeal its law taxing major television streaming platforms, after Canada’s broadcast regulator recently announced it was tripling its tax.

Hoekstra said on May 28 that he had met with U.S. streaming firms who said the Canadian Radio-Television and Telecommunications Commission’s (CRTC) Online Streaming Tax will “drive away investment and job creation in Canada’s creative sector.”

“This unfair tax will drive up costs for Canadian consumers and targets U.S. companies. This law should be immediately repealed,” Hoekstra said.

The CRTC’s implementation of the Online Streaming Act in 2024 put a 5 percent tax on streaming platforms, with the revenue going toward supporting Canadian and indigenous content. U.S. giants like Netflix, Apple, and Paramount challenged the initial rules in federal court.

The CRTC announced new regulations on May 21 to raise the tax to 15 percent on online broadcasters earning more than $25 million annually in Canada.

The broadcast regulator has also restructured contribution obligations for traditional broadcasters. While they were originally required to contribute between 30 and 45 percent, this will now be reduced to 25 percent.

The CRTC said these contributions will bring in $2 billion to support Canadian and indigenous content, such as French-language news. It said it would also include the creation of a “new fund for services of exceptional importance.”

The United States has flagged the Online Streaming Act as a trade irritant in advance of Canada–United States–Mexico Agreement (CUSMA) discussions. Ottawa has argued that the legislation is covered by the cultural exemption included in the trade agreement.

Hoekstra had also issued a statement on May 22 saying the CRTC’s decision was “making a bad situation worse.” Hoekstra accused the broadcast regulator of “targeting and taxing U.S. companies, putting up new, discriminatory trade barriers, and worsening the investment climate for American businesses.”

Peter Menzies, a former CRTC vice chair of telecommunications and current Macdonald-Laurier Institute senior fellow, recently told The Epoch Times that U.S. “irritation” with Canadian digital rules go back to before U.S. President Donald Trump took power in 2025, and the new ruling will likely make things worse.

Menzies said the Canadian government will likely request that the CRTC revise its decision to avoid “inflaming” trade negotiations with the United States.

Conservative Leader Pierre Poilievre sent a letter to Prime Minister Mark Carney on May 25 asking him to get rid of the “Netflix tax hike.” In his public letter, Poilievre said the tax “sends a message to investors and trading partners that Canada is more expensive, less predictable and harder to do business in.”

“While Canadians are struggling with the cost of filling up their tank and their grocery cart, they don’t need another tax on watching their favourite show, movie or listening to their favourite song,” he said.

Culture Minister Marc Miller said on X on May 21 that the Liberal government is reviewing the CRTC decision, and that it is “paramount to ensure that Canadians continue to see themselves reflected on screen, hear Canadian voices, and celebrate what makes this country unique.”