OTTAWA –
Washington has expressed concern about the trade implications of Ottawa’s online streaming bill, prompting a legal expert to warn that Canada could face hundreds of millions of dollars in retaliatory tariffs if it becomes law.
U.S. Trade Representative Catherine Tay raised concerns about the proposed legislation, known as Bill C-11, during talks earlier this month with International Trade Minister Mary Ng at a ministerial meeting of the Canada-US Free Trade Agreement- Mexico (CUSMA).
The online streaming bill, which passed the House of Commons and is now in the Senate, would force U.S. platforms including YouTube, Netflix and Amazon’s Prime Video to promote Canadian TV, movies, videos or music and help fund Canadian content .
Last month, federal Heritage Minister Pablo Rodriguez said the online streaming bill, if passed, would generate at least $1 billion a year for Canada’s creative sector, including Indigenous programs.
Ottawa’s public record of the July 8 meeting with Ng did not mention that her American counterpart raised concerns about the bill
But the minutes of the US government meeting said that “Ambassador Tai expressed concern about … pending legislation in the Canadian Parliament that could affect digital streaming services.”
Alice Hansen, a spokeswoman for Ng, said Wednesday: “Ambassador Tai raised Bill C-11 and Minister Ng reiterated that this bill does not introduce discriminatory treatment and is consistent with Canada’s trade obligations.”
Michael Geist, the Canada Research Chair in Internet Law at the University of Ottawa, accused the Canadian government of ignoring the “commercial risks” associated with its online streaming bill.
“Clearly the U.S. is paying attention,” Geist said.
“Having expressed concern even before the bill passed, there is an unequivocal signal that Canada could face hundreds of millions of dollars in retaliatory tariffs as a result of legislation that already faces widespread opposition from Canadian digital creators,” he said.
Toronto-based trade lawyer Lawrence Herman, founder of Herman and Associates, said that while Washington has expressed concern about the bill’s effect on U.S. businesses and pressured Ottawa, the U.S. is “far from retaliating.”
“As the American government usually does, they will threaten all kinds of retaliation,” he said. “I don’t think they’re going to 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 access the Canadian market. My assessment is that (the bill) is not discriminatory.”
Bill C-11 has been fiercely opposed by digital creators and Conservative MPs who say it would allow a future government to regulate people posting videos on YouTube — a charge the government denies.
YouTube, in its submission to the Commons heritage committee, argued the bill would impose international trade barriers to the “exchange of cultural exports” on digital platforms, including by Canadian creators, and set a “harmful” global precedent.
This month, the government 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 across the border.
Digital issues are also on the table in the ongoing negotiations with the UK for a free trade agreement.
The office of the US Trade Representative had not yet responded to a request for comment on Wednesday.
This report by The Canadian Press was first published on July 28, 2022.
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