Disney, Netflix Ask Canadian Court to Kill Proposed 5% Revenue Tax

The Motion Picture Association-Canada, representing Disney (DIS), Netflix (NFLX) and other streamers, is fighting a proposed 5% tax on revenue generated in the country that would be used to finance local news.

The tax, proposed by the Canadian Radio-television and Telecommunications Commission (CRTC), could raise an estimated 200 million Canadian dollars ($147 million) per year, according to a government estimate.

The MPA-C filed on Thursday with Canada’s Federal Court of Appeals to halt the proposal, which would go into effect in the fall. Warner Bros. Discovery (WBD) and Paramount Global (PARA) are also represented in the lawsuit.

“The CRTC’s decision to require global entertainment streaming services to pay for local news is a discriminatory measure that goes far beyond what Parliament intended, exceeds the CRTC’s authority, and contradicts the goal of creating a modern, flexible framework that recognizes the nature of the services global streamers provide,” MPA-C President Wendy Noss said in a statement.

“Our members’ streaming services do not produce local news nor are they granted the significant legal privileges and protections enjoyed by Canadian broadcasters in exchange for the responsibility to provide local news.”

The CRTC has said the funding will be “directed to areas of immediate need in the Canadian broadcasting system,” including local news and French-language content.