Music Canada has filed an application with the Federal Court of Appeal seeking leave to intervene in the ongoing appeal of the CRTC’s base contributions decision, as part of implementation of the Online Streaming Act, which imposes a 5% levy on major music streaming platforms operating in Canada.
The levy, which applies to foreign-owned streamers generating $25 million or more in annual revenue, requires that 5% of annual revenue be directed to a mix of funding bodies like the Canadian Starmaker Fund, MusicAction, FACTOR, Community Radio Fund of Canada (CRFC), a fund to support commercial radio news production outside of Montreal, Toronto, Vancouver, Calgary, Edmonton and Ottawa-Gatineau, and the Indigenous Music Office.
Music Canada, which represents the interests of companies that record, manufacture, produce, and distribute music in Canada, says the policy risks investment from music streaming platforms in programs and initiatives that promote Canadian music. It’s asking the court to consider music streaming services’ direct investments in Canada among qualifying contributions.
“As the voice of commercial music in Canada, we are concerned that the CRTC’s base contributions decision risks harming ongoing and direct investments in the Canadian music streaming market and Canadian and Indigenous artists,” Music Canada stated in a release earlier this week. “Supporting the success of Canadian and Indigenous artists must be at the centre of the CRTC’s policies, but its decision does not do that.”
The organization says the CRTC’s contributions decision risks outcomes counter to the aims of the updated Broadcasting Act, including not taking into account investment made by music streaming services in Canada like supporting festivals and other programs promoting artist development.
“Moreover, 30% of platform contributions will be siphoned away from the music industry to fund commercial radio news,” Music Canada stated. “While support for news is a laudable goal, it should not come at the expense of artists who are already trying to compete in a highly competitive, global music marketplace.”
“We have sought leave to intervene because we believe Music Canada is uniquely positioned to share with the Court the important role that these investments play in the Canada’s commercial music industry and the harms artists will face if they are reduced or eliminated.”
Spotify, Apple and Amazon launched legal challenges against the streaming levy last July, with the Motion Picture Association Canada also initiating proceedings on behalf of its streaming service members, including Disney+, Paramount+ and Netflix. Projected to cost those streamers in the neighbourhood of $1.25 million each, the levy has been paused until the court process is concluded.
