A Republican bill introduced Thursday takes aim at Canada’s Online Streaming Act and threatens retaliatory measures for the “discriminatory” policy, including additional tariffs and even changes to the North American free trade agreement.
The legislation from U.S. Rep. Lloyd Smucker of Pennsylvania would launch a U.S. Trade Representative investigation into whether the Canadian law unfairly burdens American commerce.
If that conclusion is reached, the bill orders “necessary retaliatory action” such as tariffs or “the suspension, withdrawal, or modification of trade agreement concessions or benefits to Canada under the United States-Mexico-Canada Agreement,” referred to in Canada as CUSMA.
“Digital trade plays a critical role in America’s economy, supporting high-paying jobs and exporting American values,” Smucker said in a statement.
“Canada’s unfair policies stack the deck against U.S. companies, creators, and workers. This bill would protect American creators and companies while permitting mutually beneficial competition and innovation.”
The statement includes supportive quotes from leaders of the Motion Picture Association and other U.S. digital media and communications groups.
The Online Streaming Act was passed in 2023 and would empower the Canadian Radio-television and Telecommunications Commission (CRTC) to force large foreign platforms like Netflix and Amazon to pay a portion of their annual Canadian revenues into funds devoted to producing Canadian content.
The policy has yet to be implemented while the CRTC seeks to finalize an updated definition of Canadian content, which is being challenged in court.
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U.S. streamers and the Motion Picture Association have filed court challenges against the Online Streaming Act, as well as the CRTC’s requirement that those companies disclose financial information in order to ensure the Canadian content funding obligations are met.
The Trump administration has identified the law as a trade irritant ahead of this summer’s scheduled review of CUSMA.
Smucker and a bipartisan group of U.S. House lawmakers sent a letter to the Canadian government last November calling for the policy to be withdrawn.
Pressure from the Trump administration last year led Ottawa to rescind its digital services tax that would have applied to a wider swath of U.S. tech companies for operating in Canada.
Ottawa has argued the Online Streaming Act is necessary because of U.S. streamers’ outsized presence in the Canadian market. But the companies and U.S. lawmakers say American platforms shouldn’t be unfairly burdened with foreign taxes and spending requirements.
Smucker’s bill argues that Canada’s use of a cultural exemption under CUSMA to enact the policy undermines the trade agreement and is based on outdated definitions.
The offices of Culture Minister Marc Miller, whose ministry is responsible for the Online Streaming Act, and Canada-U.S. Trade Minister Dominic LeBlanc did not immediately respond to requests for comment.
The bill would trigger an investigation under Section 301 of the U.S. Trade Act, which allows a president to impose tariffs to counter unfair trade practices.
U.S. President Donald Trump has said Section 301 will be used to replace many of the tariffs that were imposed using emergency powers, but were struck down by the U.S. Supreme Court last month.
The Trump administration this month announced Section 301 investigations into dozens of countries, including Canada, over allegations of forced labour and excess manufacturing capacity.
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