The US is continuing to up the pressure to get a repeal of the Online News Act and the Online Streaming Act.
The complete disaster of the Online News Act and the impending disaster of the Online Streaming Act is still being threatened by the US over their violations of Canada’s international trade obligations. The complaints over both aren’t anything new. The US had issued multiple warnings and letters telling Canada that both laws are violations of CUSMA/USMCA.
Canada, for its part, has long taken the “ignore it and hope it all goes away on its own” approach and just ignored all of those warnings, letters, and, no doubt, complaints from the US. This with the hopes that the US will eventually get bored and stop complaining. That might work in some spaces in the private sector, but this is government where money and patience tends to lean towards being, well, unlimited. So, unsurprisingly, when Canada continued to ignore the US complaints, the US initiated a trade dispute consultation over these laws. Canada continued their response of just standing still and hoping that the US will lose track of Canada throughout all of this.
Yeah, that worked about as well as to be expected. Trump followed that up with signing an executive order to go after Canada. That would ultimately be followed up by listing both as trade barriers.
Amidst all of this were complaints about the Digital Services Tax. Earlier this year, Trump ended all trade talks until Canada rescinded the Digital Services Tax. Canada agreed to these terms, refunded Canadians, and formally rescinded the law as part of the Budget Implementation Act. While trade talks did resume, the Online News Act and Online Streaming Act continued to be problematic for the US.
So, now that CUSMA/USMCA is up for renegotiation next year, the US has decided to utilize the trilateral agreement to put further pressure on Canada to finally get rid of the two other crazy digital bills. From the Globe and Mail:
He listed two major irritants with Canada: the Online Streaming Act, which he contended “discriminates against U.S. tech and media firms” as well as protectionist supply-management policies which “unfairly restrict market access for U.S. dairy.”
The Online Streaming Act brought Netflix, YouTube, Spotify and other companies under the authority of the Canadian Radio-television and Telecommunications Commission, allowing the regulator to mandate Canadian content requirements.
Supply management limits free-market competition, including imports, for dairy. While Canada agreed to changes to the system in 2018 USMCA negotiations, Ottawa and Washington have taken different interpretations of the text of the agreement, resulting in U.S. producers not exporting as much dairy to Canada as anticipated.
Mr. Greer also listed several other points of friction with Canada: the Online News Act, which requires internet platforms to pay publishers for linking to or republishing their content; procurement practices in Ontario, Quebec and British Columbia that advantage local companies; provincial bans on U.S. alcohol in retaliation for Mr. Trump’s tariffs; and Alberta’s treatment of electricity from Montana.
In other words, if Canada wants to retain CUSMA/USMCA, then axing the Online News Act and Online Streaming Act is going to be essential in doing so. Trump has long mused about getting rid of this trade agreement altogether. This as part of his “burn it all to the ground” efforts when it comes to international relationships. Given Trumps actions elsewhere in the world, it’s not completely out of the question that Trump would be crazy enough to end the deal altogether (who knows? Maybe he’ll blame Biden for CUSMA/USMCA as well while he’s at it even though it was Trumps trade agreement).
If successful, scrapping both laws would be a hugely good news story for Canada – whether the mainstream media and the government likes it or not.
The Online News Act has long been a storm cloud looming over Canadian creators. They have long faced the prospect of the government mandating that their work be buried by the algorithm in favour of the content by broadcasters. This while completely overriding user choice in the process. Like watching videos about games? Too bad, here’s a couple of clips of Family Feud Canada. Interested in home repair videos? Too bad, here’s videos of a broadcasters political panel discussing politics you don’t care about. This while Canadian creators suddenly see their Canadian audiences drop off completely because the algorithm is now shunning your content at the behest of the government.
Meanwhile, the Online News Act has acted as a massive wrecking ball to the Canadian news sector. Mainstream media had long argued that Meta couldn’t possibly live without news links for more than a week. So, in their completely evidence-free opinions, they argued that Meta would have no choice but to go along with the Online News Act and pay for the privilege of allowing publishers to advertise their work. That, to the surprise of no one paying attention, didn’t work out and Meta blocked news links altogether – an act they had long warned they would do. While the mainstream media kept up their bravado and said that Meta couldn’t last a week without them, that was August of 2023 that happened and Meta still hasn’t restored news links.
The trail of destruction this left behind in this act of shooting themselves in the foot was almost unimaginable when this all started. TV stations shut down, TVA slashed its workforce, Bell slashed 9% of their workforce, Corus slashed 25% of their workforce, production contracts ended, Global slashed jobs, news rooms shut down, and traffic was completely gutted for news organizations. The destruction caused by the Online News Act was borderline apocalyptic and this was even after the Canadian government issued multiple bailouts for the sector.
While Canada is currently witnessing the news sector go through the dark ages, there was a ray of hope. After facing pressure, Prime Minister Mark Carney suggested that maybe his government will rescind this terrible law. Failed Heritage minister, Steven Guilbeault, who would later quit cabinet, said that the government has no intention of going through with the repeal, suggesting that the Liberal party was internally facing a battle between delusional lobbyists and pragmatism.
It is deeply ironic that Trump might be the catalyst that saves the Canadian mainstream media sector from its own greed. After all, Trump has basically made it a life mission to destroy any news organization that dares to question his orangeliness. Yet, despite Trumps attitude that the media should only be there to serve his personal interests, he could undo the damage caused by the Online News Act (and future damage by the Online Streaming Act) here in Canada.
Make no mistake, though, repealing the Online News Act is only the first crucial step for the entire journalism sector to begin to heal. Restarting an online presence on social media takes time and Facebook already has a multi year history of shunning news links. So, even if media outlets can finally get a presence on Facebook again, the returns they’ll get with added traffic may not be what they once saw. The absolute best case scenario is that it’ll take years for the media sector to recover from the Online News Act. For some outlets, the damage might already be too great and even this won’t save their operations. Still, it’s a potentially good news story because the healing process can finally begin.
Still, that is a bit of a “what if” scenario. Right now, the pressure is on to get rid of these two terrible laws. Since it is being stapled onto the renegotiation of CUSMA/USMCA, the Canadian government is going to start to run out of options on ways to ignore these long standing trade friction points between Canada and the US.
