Netflix agrees C$500m originals deal with Canada

Netflix Hollywood officeNetflix has committed to a five-year, C$500 million (US$400 million) spend on Canadian original programming, and will pay no local taxes as a result.

The SVOD giant will invest the money in English- and French-language programming over the next five years following an agreement with the Canadian government.

Terms of the deal with Heritage Canada see Netflix committing to creating “a multi-purpose film and television production presence” in Canada, marking the first time it has done so outside the US.

This will be known as Netflix Canada, a “first of its kind production company”.

Netflix is also bound to supporting French-language content through a “market development strategy for Canada”, which will include ‘pitch days’ for producers, recruitment events and “other promotional and market development activities”.

Canadian-produced shows will also get prominence on the Netflix landing page.

Canada’s Liberal government claims the deal, which commits Netflix to “at least” C$500 million in content spend, will create jobs and support the local television sector.

In particular, Heritage Canada expects the move to significantly increase high-end scripted production, which is largely imported from the US to major broadcasters under the current system.

“Today’s announcement affirms there’s more to come as Netflix launches Netflix Canada, our permanent production presence in Canada,” said Netflic chief content officer Ted Sarandos.

“We look forward to continuing our work with Canadian talent, producers, broadcasters and other local partners to create Netflix originals in Canada for many years to come.”

However, many producers claim the deal unfairly advantages Netflix, which will pay no taxes for the duration of the agreement and is not subject to the existing 5% content levy.

Earlier this week, more than 270 members of Quebec’s creative community called on the Canadian government to regulate digital players such as Netflix, Facebook and Google, none of whom are subject to local regulatory measures.

Well known media figures David Suzuki, Xavier Dolan, Atom Egoyan, Erik Canuel, Meg Tilly, Tracey Tekahentakwa Deer and Philippe Falardeau signed the open letter, which was filed before Heritage Canada announced its new plan.

“We simply want Netflix, Amazon and others to play by the same rules as Canadian media and not take money out of Canada without contributing to Canadian programming,” said Suzuki, a popular broadcaster and environmentalist.

Other commentators have pointed out Netflix has previously claimed to spend “hundreds of millions” of Canadian dollars on local productions.

“It looks like Netflix’s submission [to Canada’s cultural policy consultation] was swallowed whole and presented as something new, when it isn’t,” argued television critic John Doyle in a piece for Canadian news site The Globe and Mail.

The deal is the centrepiece of Canadian heritage minister Mélanie Joly’s new cultural policy plan.

“The Government of Canada is committed to growing our creative industries with new investments that create opportunities for creators and producers across the country to make great content that stands out,” added Joly.

Netflix has invested in Canadian originals shows such as mockumentary Trailer Park Boys, which it revived after Showcase dropped it; Discovery Channel’s Frontier; Showcase copro Travelers; and CBC’s Anne and Alias Grace.