Netflix, Paramount ask Canada court to quash Trudeau’s new levy

Streaming service apps on TV. Photo / Getty Images

US streaming-service giants are asking a Canadian court to block Prime Minister Justin Trudeau’s new 5% tax on their revenues in the country, which is supposed to help fund local news.

The Motion Picture Association-Canada - which represents studios including Netflix Inc., Paramount Global and Walt Disney Co. - want the Federal Court of Appeal to quash new obligations forcing foreign streaming platforms to contribute to local media funds as part of the Online Streaming Act.

The new requirement “is a discriminatory measure” and “contradicts the goal of creating a modern, flexible framework that recognises the nature of the services global streamers provide,” the association’s president Wendy Noss said in a statement on Thursday.

It’s the latest pushback by US companies against Trudeau’s effort to funnel money from foreign companies into the Canadian media and news sectors.

Meta Platforms Inc. has blocked news on Facebook and Instagram in Canada since last year to avoid making payments under a separate law.

The country’s broadcast regulator, the Canadian Radio-television and Telecommunications Commission, estimated last month that the new tax on foreign streaming companies would raise C$200 million (NZ$240m) annually, which would support the production of local news as well as other content.

In their court application dated Tuesday, the companies allege the regulator “acted unreasonably in compelling foreign online undertakings to contribute monies to support news production” and that requiring them to fund news programming was “unreasonable.”

“The requirement is neither appropriate in consideration of the nature of the services they provide, nor equitable.”

The CRTC has not yet filed a response in court and did not immediately reply to a request for comment.

-By Randy Thanthong-Knight of Bloomberg, via Washington Post News Service.