Nineteen members of Congress say Canada’s online streaming act discriminates against Americans and they are asking the United States’ top trade official to intervene.
They have written a letter to U.S. Trade Representative Katherine Tai asking her to take up the matter with Canada.
The Online Streaming Act will make platforms such as Netflix, Amazon Prime and Spotify promote Canadian TV, film or music, and contribute financially to their production alongside traditional broadcasters.
Earlier this week a new regulatory plan published by the Canadian Radio-television and Telecommunications Commission indicated the timetable for implementing the Online Streaming Act has been delayed by a year. The CRTC’s plan says consultations will continue into 2026, with the target launch for implementing the new regulatory framework delayed until late 2025.
The bipartisan group of American lawmakers, including eight Democrats and 11 Republicans, say in the letter to Ms. Tai, dated Thursday, that they fear the implementation of the act “will result in trade barriers” for the U.S. music streaming industry. All are members of the powerful House ways and means committee.
They said the legislation brings music streaming services under the regulatory framework of Canada’s Broadcasting Act, which in their opinion is designed for a different era. The Broadcasting Act “requires Canadian radio broadcasters to program about 35 per cent of their airtime with Canadian music as part of the government’s efforts to ensure the availability of Canadian content,” the members of Congress write.
“We are concerned that under the new law, Canada will apply the logic of quotas designed for terrestrial broadcasters to modern music streaming services. Global online streaming services are not the same as domestic broadcasters, and we believe these provisions clearly discriminate against American content, interfere with consumer choice, and harm American artists and rights holders.”
Furthermore, they write, “The new law also gives the regulator power to condition market access for music streaming services on making financial contributions into certain government-linked funds intended for the domestic music industry, which, if put in place, would constitute new nonconforming measures restricting cross-border digital trade.”
The members of Congress urge Ms. Tai to resolve the matter with Canada. “The Office of the United States Trade Representative’s engagement with the Canadian government is crucial to ensure that the way forward is not to make the consumer experience on music streaming services worse for Canadian consumers and American artists alike, but to arrive at a flexible system respecting consumer choice and the interests of the U.S. music industry and artists.”
The Canadian government maintains that a cultural exemption in the United States-Mexico-Canada Agreement allows it to take measures to protect this country’s “cultural sovereignty, including in the online environment.” This means measures to safeguard the publication, distribution or sale of books, magazines, film, video and music, as well as broadcasting.
Meredith Lilly, the Simon Reisman chair in international trade at Carleton University’s Norman Paterson School of International Affairs, said if the United States so chooses, it could pursue a complaint against Canada under the USMCA dispute settlement process. Or under provisions in the cultural exemption section of USMCA it could unilaterally retaliate against Canadian imports up to an amount that it considers equal to the damage caused by allegedly discriminatory measures in the Online Streaming Act.
The 19 signatories include House Republican Lloyd Smucker and House Democrat Linda T. Sánchez. They said the U.S. music industry contributes US$170-billion in annual economic output and supports 2½ million jobs.
With a report from Marie Woolf
Steven Chase