The government will introduce the Digital Safety Act later today, with the headline being a ban on social media for those under 16. I’ve posted extensively on why a social media ban is an ineffective and harmful policy that raises privacy concerns for tens of millions of Canadians by mandating age verification. Yet beyond bad policy, the forthcoming bill may also become the source of the next Canada-U.S. digital policy collision. The Canadian pattern of struggling with U.S. trade pressure on digital issues is well known, starting with the Digital Services Tax that the government rescinded last summer to the recent move to reverse the CRTC’s Online Streaming Act ruling. But what has not been discussed is that a ban might be the next source of friction. The U.S. just told UK officials in an official submission that it stands against broad social media bans, strongly opposes regulations that require or create conditions that compel platforms to collect government-issued IDs, and that it is skeptical of using technical age estimation for 13-to 16-year-olds. In other words, it is opposed to much of what the Canadian government reportedly has planned in Bill C-34.
Post Tagged with: "cusma"
From Making Web Giants Pay to Making Taxpayers Pay: Government Announces Plan to Kill the CRTC’s Online Streaming Ruling
The government today killed the centrepiece of its broadcasting policy, announcing it plans to issue a new policy direction to override the CRTC’s Online Streaming Act decision on Internet streaming service contributions less than two weeks after the Commission released it. The reversal, which undoubtedly reflects the harm the decision caused as part of trade negotiations with the United States, comes at a cost to taxpayers; the government promised a $600 million payout to the audio and audiovisual sectors to cover anticipated lost revenues. Canadian Culture Minister Marc Miller framed the move entirely in terms of affordability and consumer choice, cautioning that the Commission’s requirements could be borne by Canadian consumers through higher prices. That risk has been obvious since the government introduced the legislation years ago. In fact, it is close to word-for-word for the case I made before the Commission in December 2023 that consumer interests, competition, and affordability belonged at the centre of broadcast and Internet policy.
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 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 Law Bytes Podcast, Episode 210: Meredith Lilly on the Trade Risks Behind Canada’s Digital Services Tax and Mandated Streaming Payments
The battle over a digital services tax has been the subject of Law Bytes podcast episodes for several years as the Canadian government signalled its intent to move ahead with one even as US officials warned of risks of trade retaliation if they did so outside of an international framework. With the DST now in effect, what does trade law have to say and how might the US respond? Meredith Lilly is a full Professor and Simon Reisman Chair in International Economic Policy at Carleton University’s Norman Paterson School of International Affairs. She joins me on the Law Bytes podcast to discuss the current digital trade policy tensions, what our agreements say about complaints and retaliation, as well as explain why a U.S. response on at least the DST seems likely.
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