Canadian Government Backs Off ‘Netflix Tax’
The Canadian government is investing hundreds of millions in Canadian streaming and shelving the tax.
WASHINGTON, June 8, 2026 – Canada’s government is backing down from the ‘Netflix Tax’, a recent decision to make U.S. streaming services pay fifteen percent of their Canadian revenue because of the impact the rule would have on Canadians.
The Canadian government is looking into the costs and impact that changes made to the Online Streaming Act would bring on Canadians. Canadian Identity and Culture Minister Marc Miller said, “It is another step to reinforce affordability for Canadians. This is not the time to raise the costs for Canadians.”
This decision comes after the U.S. Ambassador to Canada Pete Hoekstra called for the policy to be repealed and the Motion Picture Association condemned the act. MPA said the policy would triple the cost of doing business in Canada and violate a free trade agreement, the Canada-United States-Mexico Agreement, between the U.S. and Canada.
Instead, the Canadian government is investing money into the sector. Miller explained that an investment of $600 million Canadian dollars ($432 million USD) will be made to help support the industry.
The reversal in policy comes as Canada and the United States are discussing the renewal of CUSMA. The Online Streaming Act has been identified by the U.S. as a trade irritant and could impact the ability to make the deal.
Hoekstra welcomed the decision, saying, “American firms want to invest in Canada’s creative sector, and a fair, nonburdensome framework makes that possible,” in an X Post.
Kyle Irving, chair of the board of the Canadian Media Producers Association, said, “We are concerned that the federal government has sold out Canadian culture in favor of big U.S. tech interests.” He noted that the board was still reviewing the development, and that the Canadian government needs to decide whether U.S. streamers should be required to invest in Canadians who tell Canadian stories.
The new rule from the Canadian Radio-television Telecommunications Commission would have changed the Online Streaming Act by compelling streaming companies like Netflix and Disney to pay fifteen percent of their Canadian revenue instead of the established five percent. Canadian broadcasters would pay 25 percent of revenue instead of 45 percent.
Through the rule change, the regulator hoped to ease the financial burden on Canadian broadcasters and use the revenue collected from streaming companies to support Canadian and Indigenous content.
