AMLO, Biden, Trudeau by Eneas De Troya (CC BY 2.0)

AMLO, Biden, Trudeau by Eneas De Troya (CC BY 2.0)


“Ongoing Concerns”: U.S. Objections to Canadian Digital Policies Spreads to the Senate

U.S. concerns with Canadian digital policy continues to mount with both the U.S. Administration and Senators from both parties raising fears of discrimination. U.S. pressure seems likely to grow as the issue emerges as a major irritant in the bi-lateral trade relationship with Canada’s most important trading partner. With U.S. President Joe Biden scheduled to visit Ottawa later this winter, it seems likely that digital policy – particularly a proposed digital services tax, Bill C-11, and Bill C-18 – will be on the agenda at the meeting.

The latest signals came last week at a bilateral meeting between U.S. and Canadian trade officials. The U.S. readout of the meeting states:

Ambassador White expressed the United States’ ongoing concerns with Canada’s proposed unilateral digital service tax and pending legislation in the Canadian Parliament that could impact digital streaming services and online news sharing and discriminate against U.S. businesses.

The following day the two leaders of the U.S. Senate Committee on Finance – Democratic Senator Ron Wyden and Republic Mike Crapo wrote to the USTR to express similar concerns. On Bills C-11 and C-18, they wrote:

Online Content: In addition to pursuing a DST, Canada has been moving ahead on other troubling policies that target U.S. technology companies and raise concerns under USMCA. The Online Streaming Act would require streaming services to fund Canadian made content and promote it on their platforms. This bill would mandate preferential treatment for Canadian content and deprive U.S. creatives of the North American market access they were promised under USMCA. Meanwhile, Canada’s Online News Act would require the largest social media platforms to bargain with Canadian news organizations and pay for the right to display news stories, headlines, snippets, and links. Again, this policy targets U.S. companies for the benefit of Canadian news producers and raises national treatment concerns under USMCA.

It is important to note that this issue has been festering for months. I wrote about the risks of Canadian policy running off-side Canada’s trade obligations before either bill was even introduced given the recommendations found in the Yale Report. The U.S. expressed concern about digital tax policy in 2021 and that expanded to Bill C-11 in the summer of 2022 and to Bill C-18 last month. 

While supporters of the Canadian policies downplay the risks associated with U.S. retaliation, the reality is that a violation of the USMCA could spark billions in retaliatory tariffs. Further, even if Canada maintains that the laws are consistent with the trade agreements, U.S. pressure is typically hard to ignore. Indeed, years of debates on Canadian copyright policy have taught that if the U.S. seizes on an issue (as it did with digital locks and copyright term extension), Canadian governments often look for compromise or cave altogether. For the U.S. to raise these issues before they have even completed the Parliamentary process suggests that the digital policy trade policy concerns are not going away. In fact, they are likely to become more consequential in the months ahead and may cause headaches for progress on other issues of importance to the Canadian government.


  1. If Canada plows on ahead with this garbage and the US does retaliate, and put billions of dollars of tariffs on other Canadian goods, the Canadian government is simply making one (or more) completely unrelated Canadian industry(s) prop up another (with the US as a middle-man).

    For example, if the US puts a billion dollars worth of tariffs on Canadian lumber to offset the billion dollars worth of revenue that these antiquated Canadian industries will get from the US “web giants” in C-11 and C-18, this would be tantamount to the Canadian government going to the Canadian lumber industry and saying “Hey, how about you guys give the antiquated and dying online news and Canadian broadcast industries a billion of your dollars?”. At least that way they’d cut out the middle-man.

    But really, is that fair? Why should one Canadian industry have to prop up the bad business models of another? If they have bad business models and are not willing to update them, they should die.

  2. Sure, let’s drown in American content. Why should Canada even exist as an independent and distinct country? What does that have to do with business and profits, after all?

    • If Canada was truly concerned about digital providers paying their fair share in taxes, it could simply have changed the tax laws for all digital providers, domestic and foreign. There are also other ways consistent with trade agreements to promote Canadian content. Instead, the government has decided to vastly overreach, inviting the potential of retaliation. There is a difference between criticizing the methods and approach to solving a problem and being opposed to solving it at all.

      It is as though the government wanted to pound in a nail, but instead of listening to experts and using a hammer, it chose to use its fists. When people point out that this is not an effective method and is doing more harm than good, the government points with its blood-soaked finger and accuses them of being “pro-nail.”

    • M’am, I *do not* want to be American. And I refuse to be another conduit for big corporate profits.

    • Or, let’s let our viewing choices dictate what content is presented to us. If you don’t want to watch American content, then your choices not to watch it will inform the providers that they should suggest non-American content to *you*. So you are getting what you want.

      But why should others that do want to watch American content not get what they want also? Why should they have the Government (forcing the content providers) disregarding their viewing preferences and choices and choose for them that they will get shovelled a landslide of Canadian content even though that’s not what they want?

      That doesn’t seem a fair balance. You are getting what you want but others are not getting the same. Wouldn’t you agree?

      Funny thing is that even the Canadian content producers don’t want this. They don’t want people to be forced on to their content only to have their content stopped before it has been fully watched — i.e. because it’s not something the viewer likes.

      Because when that happens, the streaming platform demotes that content because it’s learning that people don’t like it — they are not watching it to completion. When that content gets demoted in the streaming platform’s library, it gets removed from the feeds of all of the non-Canadian viewers word-wide.

      Canadian content producers are ultimately losing out of this as their content goes lower and lower in the streaming platform’s suggestions internationally.

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