The global streaming giant has asked a Canadian court to halt its plan to impose a 5% tax to pay for local programming.

The Motion Picture Association-Canada (MPA-Canada), which represents companies including Netflix, Paramount and Disney, said in court filings that the requirement “constitutes a discriminatory act that goes well beyond what Parliament intended.” They claim it “exceeds” the CRTC’s regulatory authority and ignores billions of dollars in annual spending in Canada.

In particular, MPA-Canada says global studios and streaming services spent more than C$6.7 billion producing content in Canada for local and international audiences, and invested more content from Canadian production companies last year than the public broadcaster CBC or the Canada Media Fund and Telefilm combined.

“Our member streaming services do not produce local news and do not enjoy the significant legal privileges and protections that Canadian broadcasters enjoy in exchange for the responsibility of providing local news,” said Wendy Noss, President of MPA-Canada.

The CRTC had previously said the tax, part of the controversial Bill C-11, would take effect in September and would require broadcasters to invest 5% of their local revenues into a fund that would finance local news.

The regulator expects the fund to contribute approximately C$200 million annually to the local broadcasting system and previously said: “Funding will be directed to areas of greatest need in the Canadian broadcasting system, such as local news on radio and television, news in French – Indigenous language content, and content created by and for equality-deserving communities, official language minority communities and Canadians of diverse backgrounds,” the CRTC said at the time.

The CRTC also said broadcasters will have “some flexibility to allocate some of their contributions to directly support Canadian television content.” Regulators could not be reached before this story was published today.

Streamers constantly question why they should pay for local programming or news and point out the spending they also make in local markets.

Similar arguments are playing out in many countries around the world, but Canada has become a flashpoint and a potential warning sign if regulations prompt companies to withdraw investments.