U.S. Congress Republicans Pressure Canadian Government to Suspend ‘Discriminatory’ Online Streaming Act
In a July 31 letter, 18 members of U.S. Congress said the act “already imposes discriminatory obligations and threatens additional obligations imminently is a major threat to our cross-border digital trade relationship.”
U.S. Congress is getting involved in Canada's Online Streaming Act.
In a July 31 letter published by the National Post, 18 members of the House Ways and Means Committee wrote a letter calling on President Trump officials to pressure the Canadian government to suspend the Online Streaming Act, which they describe as a “major threat” to the trade relationship.
They argue that American streaming services are crucial contributors to the U.S. economy, and that the Canadian Radio-television and Telecommunications Commission (CRTC)'s decision to require major foreign streaming services to pay 5% of their annual Canadian revenue to Canadian content funds is harmful to digital cross-border trade.
“The fact that the Online Streaming Act already imposes discriminatory obligations and threatens additional obligations imminently is a major threat to our cross-border digital trade relationship,” read the letter addressed to U.S. Trade Representative Jamieson Greer, Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick.
“As bilateral trade negotiations continue, we urgently request that you engage with your Canadian counterparts to share our concerns and rescind the Online Streaming Act.”
In their letter, the members of Congress write that the streaming sector represents an “economic growth engine” for the U.S. and should be prioritized as part of negotiations that seek to dismantle “digital trade irritants" in Canada.
They stated that in 2023, on-demand video revenue contributed $70 billion U.S. to the American economy, in addition to $14.3 billion U.S. from music streaming.
“The CRTC’s implementation of the Online Streaming Act is deeply problematic. Online streaming services significantly differ from domestic broadcasters and the resulting CRTC decisions under the Act clearly discriminate against American companies, interfere with consumer choice, and harm American artists and right holders.”
The members of Congress who signed the letter (all Republican) include Lloyd Smucker, Carol D. Miller, Ron Estes and Rudy Yakym.
Under the law – which was implemented by the Liberal government in 2023 — CRTC ruled that the allocated funds from streaming services such as Spotify, Netflix, Amazon and Apple would go towards established organizations. This includes non-profits like FACTOR Canada and Musicaction, which financially support thousands of musicians and music companies across the country. In recent years, their resources have dramatically dropped due to reduced contributions from private broadcasters.
Currently, the decision — which is estimated to cost the platforms $1.25 million each annually — is being challenged by Apple, Amazon and Spotify. In December 2024, the courts paused the payments until the June hearing at the Federal Court of Appeal, which had yet to yield results.
The release of the letter follows the rescinded Canadian Digital Service Tax two months ago as part of the nation’s trade negotiations with the United States — a controversial reversal following Trump's threats of annexation.
Last fall, the Digital Music Association (DIMA) launched a campaign titled “Scrap the Streaming Tax,” which warned consumers that the mandated payments “could lead to higher prices for Canadians and fewer content choices” as a result of increased subscription fees.
President & CEO of DIMA, Graham Davies, continues to argue that streaming services already contribute to the Canadian music ecosystem and should not have to pay base contributions for Canadian Content.
“This policy, introduced under the previous Canadian government, was problematic then and is problematic now. It threatens to increase costs for consumers and negatively impact the long-term growth and competitiveness of Canada’s currently flourishing music industry,” said Davies.
But many within the music industry have welcomed the regulation, including the Canadian Independent Music Association (CIMA).
In January, Andrew Cash, the President of CIMA, told Billboard Canada: “The question for tech companies who are making money in Canada is: is it appropriate for them to contribute to the Canadian music ecosystem?” The answer from CIMA is a clear yes. “Canadians, through their democratic institutions, have made a decision about this."
Billboard Canada has reached out to CIMA for a response to the new Republican campaign.
In the lead-up to and following the approval of the Online Streaming Act, CIMA, among organizations including Spotify, Netflix and Music Canada, participated in the lengthy legislative and consultation process.
Now, with Mark Carney succeeding Justin Trudeau as Prime Minister of Canada, the pushback continues.
