(Recasts, adds quotes, details, byline)
By Leah Schnurr
OTTAWA, Sept 28 (Reuters) - Canada outlined its vision for its cultural and entertainment industries on Thursday, promising more money to foster Canadian content at home and abroad and striking a deal in which streaming service Netflix would invest C$500 million to create programming in the country.
The announcement was part of a sweeping review done by Canadian Heritage Minister Melanie Joly and included plans to modernize funding programs and review copyright, broadcasting and telecommunications legislation. The government did not tax Netflix as some had proposed.
Canadian producers have been struggling to compete against Netflix, YouTube and other online rivals. Critics have said more should be done to ensure domestic content does not disappear.
Joly acknowledged the challenges posed by the digital age and said the government will focus on investing in and promoting Canadian producers.
"If we get this right, we will be a leader in the world," Joly said.
Starting in 2018, the government will boost its contribution to the fund that supports television and digital media. It did not specify a figure. It did promise C$125 million over five years for a new export strategy to promote Canadian art abroad.
Netflix said it will spend C$500 million ($401.1 million) over five years to produce Canadian television and film. It will establish a permanent production presence in Canada, the first time it has done so outside of the United States.
The government did not tax the services of Netflix or other streaming platforms, which some in Canada have called for to level the playing field.
"With Canadians increasingly turning to the Internet to consume content, it's a smart move for the federal government to embrace a digital future for Canadian culture," said advocacy group OpenMedia's Katy Anderson.
The government said it was seeking agreements with other digital players to invest similarly in the creation and distribution of Canadian content.
YouTube recently created a channel for Canadian content, while Netflix and the Canadian Broadcasting Association have worked together before.
The Canadian performers' union welcomed the Netflix deal but noted the company has not had to abide by the same regulatory rules as Canadian broadcasters.
"That will continue to undermine our broadcasting system," said Stephen Waddell, national executive director of the Alliance of Canadian Cinema, Television and Radio Artists.
The government also asked the country's telecoms regulator to report back on how new distribution models will support Canadian programming. ($1 = 1.2467 Canadian dollars) (Additional reporting by Alastair Sharp in Toronto; Editing by David Gregorio)