The telecommunications regulatory authority in the country said on Tuesday that online broadcasting services operating in Canada will be required to contribute five percent of their Canadian revenues to support the local broadcasting system.

Canadian Radio-television and Telecommunications Commission (CRTC) officials said at a press conference that the funds will be used to enhance financing for local and indigenous broadcasting.

Vicky Eatrides, CEO and Chair of the CRTC, wrote in a statement: "Today's decision will help ensure that online broadcasting services make meaningful contributions to Canadian content and indigenous peoples."

This measure was introduced under the auspices of a law passed last year aimed at ensuring that companies like Netflix provide a more significant contribution to Canadian culture.

The government claims that the legislation will ensure online broadcasting services promote Canadian music and stories and support Canadian jobs.

The funding will also be directed towards French-language content and content created by official minority language communities, as well as content created by equity-deserving groups and Canadians from diverse backgrounds.

The statement also noted that online broadcasting services "will have some flexibility" to send their revenues to support Canadian television directly.

Michael Geist, a law professor at the University of Ottawa, said, "I think one of the main concerns related to the decision, as it stands now, is that there are a lot of other decisions the CRTC needs to make for the entire framework to be successful."

The government stated that the definition of Canadian content needs to be revisited and updated so that external payment beneficiaries can create works that meet those standards.

Geist said, "The problem is that the CRTC has not done that."

CRTC officials noted that this measure, which will begin in the 2024-2025 broadcasting year, is expected to raise approximately $200 million annually. It will only apply to services that are not already affiliated with Canadian broadcast regulators.

Netflix, Apple TV+, Disney+, Spotify, and Amazon did not immediately respond to a request for comment.

A Canadian group was among 20 film organizations from around the world that signed a statement in January calling on governments to impose stronger regulations on streaming companies operating in local markets.

One of the demands was for a measure that would force companies benefiting from their presence in those markets to financially contribute to the creation of new local content.

Canada is not the first country to require foreign streaming companies to direct local revenues toward local content. France implemented similar rules in 2021, requiring broadcasters to allocate 20 to 25 percent of revenues to create European and French content.