OTTAWA, Sept 28 (Reuters) - Video streaming company Netflix will spend C$500 million ($401.06 million) to create original Canadian programming, the government said on Thursday, as part of a plan to shake up the country's media and cultural industries.
The deal comes amid concerns that Canadian producers are struggling to compete against major online rivals such as Netflix and YouTube and criticism that more needs to be done to ensure domestic content does not disappear.
The announcement was part of Canadian Heritage Minister Melanie Joly's sweeping review of the country's arts and culture sector, which includes plans to modernize funding programs and review copyright laws.
Neflix's investment over five years will create Netflix Canada and establish a permanent film and television production presence in Canada, the first time it has done so outside of the United States, the government said.
Netflix will also continue to work with Canadian producers and broadcasters to create Canadian programming in both English and French.
Earlier this year, Netflix partnered with the Canadian Broadcasting Corporation to produce an eight-episode series based on the popular Canadian book "Anne of Green Gables," with plans to run a second season in 2018.
Still, the government has no plans to tax Netflix or other digital companies, which some in Canada have called for to level the playing field.
The government said it was also seeking commitments and agreements with other digital players to invest similarly in the creation and distribution of Canadian content.
YouTube earlier this year unveiled a channel dedicated specifically to Canadian content.
Joly said the Netflix deal "signals a meaningful partnership in supporting Canadian creators, producers and Canadian creative work, and in bringing that work to millions of viewers around the world." ($1 = 1.2467 Canadian dollars) (Reporting by Leah Schnurr; Editing by Dan Grebler)