Canada’s Senate has passed controversial legislation that could require streaming companies such as Netflix (NFLX) and Walt Disney (DIS) to contribute to Canadian content if they want to offer their services north of the U.S. border.
The Senate passed the online streaming act known as Bill C-11 with a dozen amendments following a lengthy study period.
The bill updates Canada's broadcasting rules to reflect the proliferation of online streaming by companies ranging from Spotify (SPOT) to Netflix and requires them to contribute to Canadian content or face steep financial penalties.
The House of Commons is expected to pass the legislation into law within weeks after reviewing the Senate's changes. Senators made amendments intended to protect user-generated content and promote Indigenous languages and Black content creators.
The Canadian Radio-television and Telecommunications Commission (CRTC), Canada’s broadcast regulator, will be tasked with enforcing the legislation’s provisions.
The proposed law has come under criticism from streaming companies who say it leaves too much room for government control over user-generated content and social-media algorithms.
However, streaming companies can get creative with the ways in which they generate and promote Canadian content, using billboards, advertising, or changes to their various algorithms.
The bill has also caught the attention of U.S. lawmakers. Two U.S. senators recently called for a trade crackdown on Canada over Bill C-11, saying that the prospective law flouts trade agreements and could unfairly penalize American companies.
