Global streaming companies said they are challenging new Canadian rules requiring them to help fund local news, saying the Canadian federal government acted unreasonably and provided no legal basis for the lawsuit.

The Canadian Motion Picture Association, which represents Netflix, Walt Disney Co and other companies, said Thursday it had filed applications with the Federal Court seeking leave to appeal the rules and seek judicial review.

The Canadian Radio-television and Telecommunications Commission (CRTC), the national broadcasting regulator, said in June that major online streaming services must devote 5 per cent of their Canadian revenues to supporting the national broadcasting system, including news production.

“The decision reveals no basis for the CRTC's conclusion that it is appropriate to require foreign web companies to contribute to news production,” MPA-Canada said in a legal filing.

“The CRTC acted unreasonably in requiring foreign web companies to contribute financially to support news production.”

The CRTC said the funding would go to areas it believes have an immediate need in the broadcasting system, such as local news on radio and television, as well as French and Indigenous content.

The regulator declined to comment because the case is before the courts. It had previously said the rules, which take effect in September, would raise about C$200 million ($146 million) a year.

The measure was introduced under the auspices of legislation passed last year that the federal government says will ensure online streaming services promote Canadian music and stories and support Canadian jobs.

Other streaming platforms served by MPA-Canada include those offered by Paramount, Sony, NBCUniversal and Warner Bros Discovery.