Spotify is hiking its prices in Canada. Why they say new federal regulations are to blame

Spotify Premium users beware: you’ll need to start paying more every month for your subscription soon.
Earlier this month, the streaming service announced it would increase the monthly fee for its four premium plans starting in December. The raise in prices range from as low as 40 cents to $4:
Amid the online fury over Spotify’s plans, the company said in a statement to the Star that new federal regulations under the Online Streaming Act are one of the reasons for the higher fees, along with “local macroeconomic factors” and market demands.
Here’s a quick explainer for those wondering why a random government bill is being blamed for how much they pay for music.
The Online Streaming Act, also known as Bill C-11, was passed by the federal government in April 2023 to require streaming platforms to contribute and support Canadian content, something that traditional broadcasters (think TV and radio) are already required to do under the 1991 Broadcasting Act, sometimes referred to as CanCon.
Over a year later, in June, the Canadian Radio-television and Telecommunications Commission (CRTC) — an independent regulator of Canadian broadcasting — announced that it would require foreign streamers to pay five per cent of their annual Canadian revenues into a fund aimed at producing local programming, Indigenous news, French-language content and content created by those with a diverse background.
In a statement sent to the Star, the CRTC said online streaming companies are multinational businesses that benefit from operating in the Canadian marketplace and broadcasting system.
“They must now contribute a portion of their revenues to support the system they benefit from,” the statement continued.
A spokesperson for Canada’s Ministry of Canadian Heritage echoed the CRTC’s comments, but noted the commission was implementing the act independently.
“Spotify and other streamers should be finding ways to step up, not step back, and collaborate with Canada’s talented creative sector,” the spokesperson wrote, adding that streaming companies should take up their concerns with the CRTC instead of using them as an excuse to raise prices.
While the local media industry has praised the CRTC’s mandate, associations representing Spotify and other big streaming services like Netflix have come out against the CRTC’s announcement.
The Motion Picture Association Canada — which represents platforms including Disney Plus, Netflix, HAYU, Sony’s Crunchyroll, Paramount Plus and Pluto TV — said the decision does not take into account the contributions already made by its members to the Canadian media industry, according to reporting from The Canadian Press in June. 
And, at the end of September, the Digital Media Association (DIMA), which Spotify is a part of, launched a national campaign against the mandate, calling it a “streaming tax” that could increase costs for consumers. The campaign is asking Canadians to send messages to their MPs to repeal the tax.
“The streaming tax needs to be scrapped because Canadians are already feeling the pinch from rising inflation and economic pressures. The addition of a streaming tax is an unnecessary burden,” Graham Davies, president and CEO of DIMA, said in a statement at the time of the campaign’s launch.
In its statement, Spotify said it has filed a legal challenge against the “CRTC streaming tax” along with “a number of others,” but that it wouldn’t comment any further at this time.
Brett Caraway, an associate professor in media and economics at University of Toronto Mississauga, pushed back against Spotify blaming the new CRTC mandate. While consumers do bear some of the burden from new taxes, he said producers are also responsible.
“Who bears the bigger brunt is kind of a function of how responsive producers and consumers are to change its price,” he explained. 
Caraway also pointed out that the price for an individual Premium plan is going up around 15 per cent, more than what Spotify is being required to pay under the CRTC mandate.
“There’s obviously more going on than just this one added cost.”
You shouldn’t expect people to end their Spotify Premium plans en masse, according to Caraway.
“Music is so important, you can increase a couple of dollars and people will continue to pay that price and maybe give up something else,” he said.
Still, Caraway acknowledged that those with a lower income may be more impacted by the higher prices — especially when added on top of other streaming platform subscription fees.
Spotify seems to be the first streaming platform to up their prices from the CRTC’s new regulations so far.
“It would not surprise me to see other platforms follow suit,” Caraway warned.
Once Spotify’s prices rise in December, it’ll be one of the pricier options for people looking for a music streaming service. Here’s what other platforms with similar services are charging, as of Oct. 16:
Apple Music
Amazon Music Unlimited
Tidal
YouTube Premium
With files from The Canadian Press