Washington has raised concerns about the trade implications of Ottawa’s online broadcasting bill, prompting a legal expert to warn that Canada could face hundreds of millions of dollars in retaliatory tariffs if it became law.
U.S. Trade Representative Katherine Tai expressed concern over the bill, known as Bill C-11, during discussions earlier this month with International Trade Minister Mary Ng. at the Ministerial Meeting of the Free Trade Commission of the Canada-United States-Mexico Agreement (CUSMA).
The streaming bill, which passed the House of Commons and is now in the Senate, would force US platforms, including YouTube, Netflix and Amazon’s Prime Video, to promote TV, movies, Canadian videos or music, and to help fund Canadian Content.
Last month, federal Heritage Minister Pablo Rodriguez claimed the streaming bill, if passed, would generate at least $1 billion a year for Canada’s creative sector, including indigenous programs.
Ottawa’s public account of the July 8 meeting with Ng did not mention that his American counterpart had raised concerns about the bill.
But the minutes of the US government meeting say “Ambassador Tai expressed concern about…legislation pending in the Canadian Parliament that could impact digital streaming services.”
Alice Hansen, Ng’s spokesperson, said on Wednesday: “Ambassador Tai raised Bill C-11 and Minister Ng reiterated that this bill does not institute discriminatory treatment and is consistent with trade of Canada.”
Michael Geist, Canada Research Chair in Internet Law at the University of Ottawa, has accused the Canadian government of ignoring the “commercial risks” associated with its online streaming bill.
“Clearly the United States is paying attention,” Geist said.
“By raising concerns even before the bill is passed, there is an unmistakable signal that Canada could face hundreds of millions of dollars in retaliatory tariffs due to legislation that already faces widespread opposition from digital-first Canadian creators,” he said.
Lawrence Herman, a Toronto-based business lawyer and founder of Herman and Associates, said that although Washington is raising concerns about the bill’s effect on American businesses and putting pressure on Ottawa, the United States is ” away from reprisals.
“As the US government usually does, they will threaten all kinds of retaliatory measures,” he said. “I don’t think they would have a strong case unless they can show that the policies are discriminatory or targeted.
“In the case of Canada, they want streaming services to pay their fair share to gain access to the Canadian market. My assessment is (the bill) is not discriminatory.”
Bill C-11 has been strongly opposed by digital creators and Conservative MPs who claim it would allow a future government to regulate people who post videos on YouTube – a charge the government denies.
YouTube, in its submission to the Commons Heritage Committee, argued that the bill would impose international trade barriers to “the exchange of cultural exports” on digital platforms, including by Canadian creators, and set a precedent “harmful” world.
The government this month launched a consultation on developing a model digital trade agreement.
He said such a model agreement would help Canada address emerging technology issues and build on existing free trade agreements, including CUSMA, the North American Free Trade Agreement known as the USMCA name across the border.
Digital issues are also on the table in ongoing talks with the UK over a free trade deal.
The U.S. Trade Representative’s office had not yet responded to a request for comment Wednesday.
This report from The Canadian Press was first published on July 28, 2022.
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