Biden urged to push back on legislation
U.S. trade officials briefed White House on federal streaming, news bills ahead of Ottawa visit
When U.S. President Joe Biden touches down in Ottawa on Thursday, some high-profile issues are expected to top the agenda: the war in Ukraine, migration across the Canada-U. S. border, stabilizing Haiti, climate change and continental defence.
What’s less certain — despite a concerted push from a coalition of U.S. trade groups this week — is whether Ottawa’s online regulation bills, which have sparked trade concerns south of the border, will make the cut.
In recent months, the federal government’s online streaming and online news bills have prompted concern from U.S. Trade Rep. Katherine Tai and senators on the U.S. Senate finance committee who fear the proposed pieces of legislation unfairly discriminates against American companies and content produced in the U.S.
Ottawa’s online streaming bill seeks to subject streaming giants like Netflix and Spotify to the same regulations that apply to television and radio broadcasters in Canada. It has been criticized by platforms like TikTok and YouTube, and their Canadian users, for potentially governing how their content is produced and discovered.
The online news bill would compel web giants like Facebook and Google to share some of the revenue they make from posting news content on their platforms with the media outlets that produce the stories.
Both platforms have panned the bill and have threatened to yank news content from their pages if it passes in its current form. Torstar, which publishes the Toronto Star, has signed deals with both companies to share work produced by its publications on their platforms.
A group of U.S. trade associations — including the National Foreign Trade Council, the Computer and Communications Industry Association (CCIA), and the U.S. Chamber of Commerce — penned a letter to the White House this week urging Biden to discuss the matter with Prime Minister Justin Trudeau.
“We write to you in advance of your upcoming visit to Ottawa to express our concerns about several measures that will undermine the ability of U.S. companies to fairly compete in the Canadian market,” the letter begins.
The 10 groups argue that the online streaming bill would compel American streaming platforms “to fund and/or promote Canadian content on their platforms via extraterritorial regulatory agency actions,” potentially disadvantaging U.S.-based creators.
They also assert that Ottawa’s online news bill targets “a narrow range of U.S. digital companies to pay Canadians news organizations and broadcasters,” stating that it “raises significant national treatment and performance requirement concerns” under the United States-Mexico-Canada Agreement (USMCA).
“The question is, what risk are you putting your policy and your government in, given the kind of concern that this has raised and has been publicly articulated by senior U.S. officials?” said Jonathan McHale, the vice-president of digital trade at CCIA, which counts Google and Meta among its members.
On Wednesday, Heritage Minister Pablo Rodriguez told reporters the bills “meet all international trade obligations.”
He also rejected the argument that the legislation specifically targets U.S. companies.
Tai has already met virtually with Trade Minister Mary Ng about her concerns over the proposed legislation and Canada’s promised digital services tax, which would target tech giants and come into effect next year if a global taxation framework isn’t implemented by 2024.
While Rodriguez wouldn’t comment Wednesday on whether those concerns would carry over into Biden’s discussions with Trudeau, Ng’s office confirmed to the Star that she will take part in meetings with the president and his delegation Friday.
Tai’s office, meanwhile, told the Star the U.S. trade representative did brief the White House on “trade issues related to Canada” during the planning stages of Biden’s trip.
Michael Geist, the University of Ottawa’s Canada research chair in internet and e-commerce law, said that even though the bills haven’t been passed into law, that doesn’t mean both countries shouldn’t be seized with addressing the subject.
The USMCA upholds a “cultural” exemption that existed under NAFTA, which allows Canada to “adopt and maintain programs and policies that support the creation, distribution and development of Canadian artistic expression or content, including in the digital environment.”
“That same trade agreement does give Canada the ability to violate the deal, but it also then would give the U.S. the ability to impose retaliatory tariffs of a commensurate amount,” Geist said.
“If it got this far, they would, in all likelihood, choose to apply this on areas that would exact the most amount of pain from a Canadian perspective.”
But Jason Kint, the CEO of Digital Content Next, a U.S.-based trade association that represents digital publishers, said he believes certain trade concerns get “inflated by Google and Facebook and their operatives,” pointing to “significantly bipartisan” efforts in the U.S. that have looked at regulating big tech companies on their own soil.