Some U.S. Republicans want Canada to axe its Online Streaming Act
The 18 Republicans penned a letter to U.S. Trade Representative Jamieson Greer, Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent, calling Canada's Online Streaming Act "discriminatory" against American companies.
The members of Congress who signed the letter include Lloyd Smucker, Carol D. Miller, Ron Estes and Rudy Yakym.
They argue that American streaming services are important contributors to the U.S. economy and that the Canadian Radio-television and Telecommunications Commission (CRTC)'s decision to force foreign services to contribute five per cent of their revenues to government funds benefiting the creation of Canadian content is harmful to cross-border digital trade.
"This sector represents an economic growth engine for the United States and should be prioritized in our ongoing negotiations with Canada as you seek to dismantle digital trade irritants," the July 31 letter obtained by CBC News says.
The letter states that in 2023, on-demand video revenue contributed $70 billion US to the American economy, in addition to $14.3 billion US from music streaming.
In late June, the Canadian government announced it would rescind its digital services tax, days after U.S. President Donald Trump demanded it gone and briefly cut off trade negotiations.
Though the negotiations resumed, they failed to meet Trump's self-imposed Aug. 1 deadline and Canadian trade representatives have displayed less optimism since the president slapped a 35 per cent tariff on goods non-compliant with the Canada-U.S.-Mexico agreement (CUSMA).
Prime Minister Mark Carney also received criticism for bending to U.S. wishes, despite promising a strong approach to facing Trump during the election campaign.
WATCH | 'Canada caved' on digital services tax, says White House spokesperson:
'Canada caved' on digital services tax, says White House spokesperson
1 month ago
In response to a reporter's question about trade talks with Canada, White House press secretary Karoline Leavitt said Prime Minister Mark Carney 'caved' to U.S. President Donald Trump after the latter said on Friday he was ending discussions because of the digital services tax. The Canadian government announced late Sunday evening it would rescind the tax.
Carney's government has displayed a willingness to reverse digital policies created during his predecessor Justin Trudeau's time in office, says Michael Geist, law professor and Canada Research Chair in internet and e-commerce law at the University of Ottawa.
"U.S. streaming companies and U.S. politicians can see that reversal and in some ways suspect that the door may be open to a reversal of the Online Streaming Act as well," Geist said.
Geist said he isn't surprised the legislation is getting pushback in the U.S., given the mandatory contributions the CRTC has required.
Many of the Canadian content funds exclude foreign streamers, Geist notes.
"They're investing in the country, but then aren't beneficiaries," he said.
Geist says the legislation was controversial for that reason and because of its narrow definition of what Canadian content actually is. For example, a Netflix production entirely made and developed in Canada may not be included. Canadian filmmakers are also excluded from potential funding, according to reporting by The Globe and Mail.
Carney may recognize the shortcomings of digital policies created by the Trudeau government, which Geist argues didn't anticipate the consequences of requiring large American tech companies to comply with Canadian legislation.
Earlier this week, the prime minister suggested his government was looking broadly at how Canadian news outlets can better reach their audiences. That includes revisiting the Trudeau government's Online News Act, which led to Meta banning Canadian users from sharing links to news sites.
"The question is, once you start getting into some of the greyer areas, what's the appropriate approach?" Geist said.
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