Earlier this month, the government shocked the culture sector by announcing it was effectively reversing the CRTC decision that implemented the Online Streaming Act. Culture Minister Marc Miller tried to cushion the blow with a promise of $600 million in support for the audio and audiovisual sectors, but there was no escaping the anger from some over abandoning a policy that had been years in the making. Mark Musselman is a former entertainment lawyer, longtime Canadian movie producer, and the author of the excellent White Paper Black Coffee Substack. He returns to the Law Bytes podcast to discuss the reversal, the stakeholder reaction, and the challenges that lie ahead.
Post Tagged with: "c-11"
Improv Policy: The Government Doesn’t Know What To Do About Its Online Streaming Act Mess
Earlier this month, the government shocked the culture sector by announcing it was effectively reversing the CRTC decision that implemented the Online Streaming Act. Culture Minister Marc Miller tried to cushion the blow with a promise of $600 million in support for the audio and audiovisual sectors, but there was no escaping the anger from some over abandoning a policy that had been years in the making. Weeks later, it is still not clear what precisely the government intends to do. In fact, it is increasingly evident that there is no plan, with the government improvising on critical issues such as the implementation of the reversal, funding for news, and the eventual contribution requirements for Internet streamers.
From Levy to Liability: Why Canada Risks Facing Hundreds of Millions in Retaliatory Tariffs Due to the CRTC’s Online Streaming Act Ruling
The CRTC’s Online Streaming Act ruling, which triples the mandated payments for large Internet streaming services, has attracted widespread criticism given fears the approach could result in higher consumer fees and a trade backlash from the United States. Culture Minister Marc Miller’s response to the ruling was somewhat muted, saying the government was reviewing the changes and assessing their impact. The reluctance to take a stronger public position may stem from concerns about the ruling’s trade implications, as it appears to violate Canada’s trade obligations. The violation can be saved by invoking CUSMA’s cultural exemption, but that triggers the U.S. right to apply dollar-for-dollar retaliation. In other words, if the Online Streaming Act generates hundreds of millions in mandated expenditures, it will also spark matching tariffs targeting high-value Canadian economic sectors.
The Online Streaming Act Bill Comes Due: Why the CRTC’s Latest Ruling Guarantees Years of Trade and Legal Battles
The CRTC yesterday released its much-anticipated Online Streaming Act decision that has been years in the making. Given the likely opposition from many stakeholders, it is virtually certain to lead to protracted trade and legal battles. From the moment the government introduced Bill C-10 in 2020, its goal was to impose regulatory obligations on Internet streaming services, treating them as online broadcasters and mandating that they pay into the Canadian system. This week’s ruling puts a number on the payments, building on an earlier 5% interim levy with an additional 10% in expenditure requirements. The combined 15% places Canada among the most expensive operating jurisdictions in the world for streaming services, with consequences that will undoubtedly affect consumer streaming prices. Moreover, with the streaming services already challenging the interim 5% levy in court, they will undoubtedly challenge this one as well. In fact, the battle will not be limited to Canadian litigation. The U.S. government, which has become increasingly vocal in its opposition to the Online Streaming Act, will view this decision as a provocation and escalate pressure on Canada to drop the legislation altogether. Culture Minister Marc Miller appeared to hedge in his reaction to the decision, suggesting that the government sees the headaches that lie ahead.
The Online Streaming Act in Jeopardy: U.S. Takes Aim at the CUSMA Cultural Exemption With Threats of Bill C-11 Retaliation
From the moment it was first introduced as Bill C-10 in the fall of 2020, it was readily apparent that mandated payments by foreign streaming services to support Canadian content would face a trade backlash with the U.S., with the real prospect of trade retaliation. In fact, I wrote about the issue days after the bill was tabled, warning that an uneven playing field for benefits – foreign companies required to contribute but banned from benefiting – was a risky approach. Those warnings were dismissed by the government, cultural lobby groups, and supporters of the bill who assured critics that Canada’s cultural exemption under CUSMA provided a shield against U.S. retaliation.
It took years for Bill C-10 – later Bill C-11 – to become law as the Online Streaming Act, but now the bill has come due. Weeks after the U.S. Trade Representative (USTR) specifically identified Canadian digital laws as a target in CUSMA renegotiations, House Republicans introduced the Protecting American Streaming and Innovation Act, a bill that would mandate an investigation into the Canadian law and open the door not only to trade retaliation but also to a change in how the cultural exemption is applied.
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