The latest counterattack against Canada's new tax policy includes Netflix (NFLX.US) and Paramount Universal (PARA.US) refusing to be taxed to fund the local news industry.

The American streaming service giant is requesting the Canadian court to amend Prime Minister Justin Trudeau's 5% new tax on its income in Canada, in order to cancel the requirement for it to fund local news. Representing companies including Netflix, Paramount Pictures, and Walt Disney Company, the Motion Picture Association Canada hopes that the Federal Court of Appeal will overturn the new obligation for foreign streaming platforms to donate to local independent news funds, a requirement under the Online Streaming Act. While these companies do not oppose the 5% tax, the proceeds of which will be used for producing other types of content in Canada, as well as for Black and Indigenous creators, they oppose the mandatory 1.5% contribution for Canadian news production. Association Chair Wendy Noss stated in a statement on Thursday that this new requirement "is a discriminatory measure" and "contradicts the goal of establishing a modern, flexible framework recognizing the nature of services provided by global streaming platforms". This is the latest backlash from American companies against Trudeau's efforts to inject foreign funds into the Canadian media and news industry. Meta Platforms started blocking news on Facebook and Instagram in Canada last year to avoid paying fees under another law. The Canadian broadcasting regulator, the Canadian Radio-television and Telecommunications Commission, estimated last month that imposing new taxes on foreign streaming companies would raise $200 million Canadian dollars (approximately $147 million USD) annually for the production of local news and other content. In an application submitted to the court this Tuesday, these companies claimed that the regulator's "coercion of foreign online companies to fund news production is unreasonable", and that requiring them to fund news programs is also "unreasonable", stating that "given the nature of the services they provide, this requirement is neither appropriate nor fair". The Canadian Radio-television Commission has not yet submitted a response to the court and declined to comment on ongoing legal matters. The office of Canadian Heritage Minister Pascale St-Onge stated that local communication companies support a sustainable news ecosystem, while foreign streaming companies are profiting greatly in Canada without contributing to the local system. The office stated in a statement: "As Canadians face more and more misinformation, having trustworthy news reporting is crucial, as it holds the powerful accountable and represents sharp questions on behalf of Canadians."