By David Farrell
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Lloyd Smucker's bill will launch an investigation into whether the legislation "discriminates against or burdens" American companies, prompting direct "retaliatory action," which may include tariffs.
U.S. politicians are again targeting Canada’s Online Streaming Act.
Congressman Lloyd Smucker has introduced a new bill, titled the Protecting American Streaming and Innovation Act, that will investigate whether the Canadian legislation “discriminates against or burdens” U.S. companies.
If the investigation, completed by the United States Trade Representative (USTR), finds that this is true, they’re required to “take necessary retaliatory action,” which could include the implementation of tariffs in Canada.
“Digital trade plays a critical role in America’s economy, supporting high-paying jobs and exporting American values,” says Rep. Smucker in a news release statement on his website.
“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.”
Co-sponsors of Smucker’s newly implemented bill include U.S. representatives Greg Steube, Nicole Malliotakis, Nathaniel Moran, Mike Kelly and Carol Miller.
The Online Streaming Act rolled out in 2023, but has yet to be fully implemented by the Canadian Radio-television and Telecommunications Commission (CRTC), becoming the subject of multiple legal disputes.
Notably, one of the legislation’s key updates was the federal broadcast regulator ordering major foreign streaming platforms such as Spotify, Amazon and Apple to make a 5% contribution toward Canadian content. The allocated funds would go towards established organizations and non-profits, including FACTOR Canada and Musicaction — but it didn’t get very far.
The decision — which would’ve cost the platforms an estimated $1.25 million each annually — received pushback from the major streamers, prompting them to appeal the base contributions. The payments have remained paused, but were a hot topic of conversation during the CRTC public hearings in September.
The streaming tax also received criticism from U.S. congress, which has made it a hot political topic amongst international trade negotiations in the wake of Trump's tariffs. 18 members of U.S. Congress, including Smucker. The Congress signed a letter last summer, claiming the act “imposes discriminatory obligations and threatens additional obligations imminently is a major threat to our cross-border digital trade relationship."
The bill had experienced a wave of support from groups representing tech companies and large streaming services, including Digital Media Association (DIMA), an organization that has been vocal against the base contributions.
Claiming that it “continues to be a significant source of concern to [their] members,” the organization’s CEO Graham Davies, notes that the Online Streaming Act “discriminates against non-Canadian, and especially U.S. companies, jeopardizes investments and imposes new and undue burdens on music streaming services.”
In 2023, 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.
The Motion Picture Association, which represents major companies including Disney, Netflix, Paramount and Amazon, welcomes the U.S. bill.
Charles Rivkin, the association’s chairman and CEO, says in a statement that although “Canada and its audiences are important to our member studios and the broader industry,” the Online Streaming Act “disadvantages American companies,” by implementing “discriminatory obligations that Canadian broadcasters do not face.”
Still, the regulation has seen support from homegrown operations, including the Canadian Independent Music Association (CIMA).
“The question for tech companies who are making money in Canada is: is it appropriate for them to contribute to the Canadian music ecosystem?” asked Andrew Cash, the organization’s president, last January. The answer is resounding yes. “Canadians, through their democratic institutions, have made a decision about this,” he told Billboard Canada.
The future of the Online Streaming Act and the Protecting American Streaming and Innovation Act remains ongoing.
