Canadian Court Pauses So-Called 'Streaming Tax' on Companies Like Spotify, Amazon and Apple

The Canadian government's so-called "Streaming Tax" is on pause.

The CRTC (Canadian Radio-television and Telecommunications Commission) revealed in June 2024 that major global streaming companies would be mandated to pay 5% of their annual Canadian revenues into funds that fuel Canadian content. The decision was part of the Online Streaming Act, new legislation that modernizes Canada's Broadcasting Act for the first time in a generation.

Since then, many of the biggest streaming companies – including Spotify, Amazon, Apple, Netflix and Disney – have been fighting the decision in court. This week, the Federal Court of Appeal decided to put the companies' required payments on hold until their appeal is heard.

The Canadian Press reports that the payments, estimated to be at least $1.25 million each annually, will not have to be made until the court process is finished. They've agreed to expedite the hearings to June 2025, with the bulk of the money due in August.

While pursuing legal challenges, many of the biggest streaming companies have also launched an online campaign to lobby against the decision in the court of public opinion. A group called DiMA (the Digital Media Association) – whose members include Amazon, Pandora, Spotify, YouTube, Apple and more – launched a website with a petition and letter-writing campaign under the name Stop the Streaming Tax. The campaign has at least one high-profile advocate in musician Bryan Adams, a long-time critic of CanCon regulations.

The 5% contributions "could lead to higher prices for Canadians and fewer content choices," the website argues. "As a result, you may end up paying more for your favourite streaming services and have less control over what you can watch or listen to."

Many Canadian music associations like CIMA (the Canadian Independent Music Association), meanwhile, have praised the CRTC's decision. In June, CIMA's President Andrew Cash called it "good news for the Canadian music sector" and said it “lays the groundwork for a dynamic partnership with digital platforms where Canadian talent can thrive both domestically and internationally."

The mandated contributions would go to music funds like FACTOR and Musicaction as well as the Canadian Starmaker Fund, to funds to support commercial and community radio, and to the Indigenous Music Office and other Indigenous music incubators.

More on this story as it develops.