U.S. Ambassador Pete Hoekstra welcomed the reversal, arguing a fair framework would attract American investment in Canada’s creative sector.

Industry sentiment warned that price increases for Canadian subscribers and reduced investment by streamers might persist unless benefits are reciprocated.

Prime Minister Mark Carney and Culture Minister Marc Miller emphasized affordability and the vitality of the streaming sector as reasons for the reversal, with a focus on directing funding into a $600 million subsidy program.

Canada’s government reversed the regulator’s plan to require large streaming services, including Netflix, to contribute 15% of Canadian revenues to Canadian content under the Online Streaming Act.

The reversal was prompted after the Canadian Radio-television and Telecommunications Commission, which had approved the 15% contribution, faced pushback amid broader trade and regulatory concerns.

Industry and political reactions were swift, with critics arguing the move undercuts Canadian culture in favor of U.S. tech interests, while supporters framed it as preserving affordability for consumers.

Observers describe the shift as a pragmatic stance by the Carney government to protect consumers, industry viability, and trade relations, while criticizing calls for higher industry charges.

U.S. officials and Hollywood studios voiced opposition to the reversal, highlighting ongoing trade tensions.

The timing aligns with upcoming Canada-United States-Mexico Agreement renegotiations, aiming to reduce friction with the United States and shield taxpayers from higher streaming bills.

The policy reversal surprised industry players and Liberal MPs, who learned of it at a caucus meeting, drawing criticism from figures who argued it weakens Canadian culture.

Critics, including industry leaders, said Ottawa is surrendering potential funding for culture and tilting toward large U.S. platforms.

The move followed Canada-U.S. trade discussions in Washington, with U.S. officials viewing the Online Streaming Act as potentially discriminatory against American firms.