'Major threat' to trade: U.S. Congress Republicans call for Canada to rescind Online Streaming Act

OTTAWA — Republicans on an influential House committee are pushing top Trump administration officials to pressure Canada to kibosh its controversial Online Streaming Act, which they describe as a “major threat” to the trade relationship.

In a July 31 letter obtained by National Post, 18 Republican members of Congress on the powerful House ways and means committee ramped up pressure on White House officials to get Canada to dump the “discriminatory” Act the same way it ditched the Digital Services Tax in late June.

“The fact that the Online Streaming Act already imposes discriminatory obligations and threatens additional obligations imminently is a major threat to our cross-border digital trade relationship,” reads the letter to U.S. Trade Representative Jamieson Greer, Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick.

“As bilateral trade negotiations continue, we urgently request that you engage with your Canadian counterparts to share our concerns and rescind the Online Streaming Act,” they added.

Greer, Bessent and Lutnick are at the forefront of negotiations with Canada for a new trade deal that Mark Carney’s government hopes will eliminate a host of new U.S. tariffs against key Canadian industries.

The letter sheds light on how a growing number of influential U.S. politicians are using ongoing trade negotiations with Canada to push back against Canadian digital policies that impacts American companies.

It also comes amid a growing trade war between both countries in which Republicans and President Donald Trump have been vocal about a plethora of commercial irritants with Canada.

The Online Streaming Act is a hotly contested law implemented by the Liberals in 2023. It brought online streaming platforms under Canadian broadcasting laws and regulation by the Canadian Radio-television and Telecommunications Commission (CRTC).

Under the new law, the CRTC ruled last year that streaming services such as Spotify, Netflix, Amazon and Apple will have to pay five per cent of their annual Canadian revenue into a fund dedicated to creating Canadian content.

The decision — which is estimated to cost the platforms $1.25 million each yearly — is currently being challenged by Apple, Amazon and Spotify at the Federal Court of Appeal.

While members of the prestigious U.S. House committee have previously raised concerns about the Act, it’s the first time a significant number of members have called for Canada to rescind it completely.

In their letter, the members of Congress tell the Trump officials that the streaming sector represents an “economic growth engine” for the U.S. and should be prioritized as part of negotiations seeking to dismantle “digital trade irritants” from Canada.

“The CRTC’s implementation of the Online Streaming Act… is deeply problematic. Online streaming services significantly differ from domestic broadcasters and the resulting CRTC decisions under the Act clearly discriminate against American companies, interfere with consumer choice, and harm American artists and right holders,” they wrote.

The signatories of the letter include Representatives Rudy Yakym, Lloyd Smucker, Adrian Smith and Brian K. Fitzpatrick.

Asked if Carney supports the Justin Trudeau-era Act or if it could find itself on the chopping block during ongoing trade negotiations with the U.S., PMO spokesperson Emily Williams declined to comment.

“With respect to the negotiations with the US, we can’t speak to the details of those (and) won’t negotiate in public,” she said in an email.

Earlier this year, Greer included the Online Streaming Act in his most recent report on foreign trade barriers as viewed by the U.S. administration.

“The rules include criteria that, based on available information, may effectively exclude Canadian streaming services from the new obligations, and under current definitions, would prevent U.S. suppliers from accessing the funding mechanisms that they will pay into,” reads the report, adding that the U.S. is monitoring the effects of the Act closely.

In a statement, advocacy group Friends of Canadian Media pooh-poohed the claims in the new letter and argued that the act protects Canada’s broadcasting and media sectors and the country’s cultural sovereignty.

“Our decision-makers here at home have already bent to American pressure once by scrapping the Digital Service Tax. They cannot make such a costly mistake again,” wrote the group’s senior director of government and media relations Sarah Andrews.

Last year, a bipartisan group of members wrote to President Joe Biden’s Trade Representative Katherine Tai arguing that the Act discriminated against U.S. companies.

“We are concerned that the music industry, including U.S.-based streaming companies and artists, will be harmed by Canada’s implementation of the Online Streaming Act,” read the 2024 letter to Tai .

On Tuesday, Carney suggested he is considering substituting or rescinding another U.S. digital irritant, the Online News Act, to ensure local news is disseminated wider and faster two years after Meta banned access by Canadians to news on its platforms.

National Post

cnardi@postmedia.com

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