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.
Post Tagged with: "c-11"
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.
The Most Unworkable Internet Law in the World: Quebec Opens the Door to Mandating Minimum French Content Quotas for User Generated Content on Social Media
The Quebec government has amended its Internet streaming legislation by removing an exemption for social media services, establishing the most unworkable social media regulation in the world with companies required to meet both French language minimum content quotas and discoverability requirements. I previously argued that Bill 109, which has now completed its clause-by-clause review, is unconstitutional, unnecessary, and unworkable. If enacted into law, it is sure to face a constitutional challenge and the prospect that streaming services such as Netflix and Spotify will either block the Quebec market or be forced to remove considerable English and foreign language content in order to comply. The result will mean less choice for Quebec-based subscribers without any requirements for more Quebec content (the law applies to French language content, not Quebec-based content).
Incredibly, the government, led on the file by Minister of Culture and Communications Mathieu Lacombe, has managed to make an awful bill even worse.
The Law Bytes Podcast, Episode 252: Len St-Aubin on the CRTC’s Plan To Modernize Canadian Content Rules
The CRTC recently released its much anticipated decision on Canadian content rules, the first of two decisions that could reshape broadcasting and film/TV production in Canada. The Commission promoted its Cancon approach as offering new flexibility into the system but the fine print matters as some changes may be more restrictive than they appear at first glance. To help make sense of the decision, Len St-Aubin, the former Director General of Telecommunications Policy at Industry Canada, joins the Law Bytes podcast. Len provided consulting services to Netflix until 2020 and has since been an active participant in the debate on Internet policy as part of the Canadian Internet Society.
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