Online Streaming Act, Online News Act Called Out in National Trade Estimate Report

The Online Streaming Act and Online News Act continues to be a trade problem with the US government.

One of the things we have long warned about for years is that the Online Streaming Act and Online News Act would be a massive trade irritant with the United States. We were far from the only ones making these warnings, either. Other experts and observers were sounding the alarm about this aspect of the debate to the government when these were both still just Bill C-11 and Bill C-18. The trade problem is an atypically non-partisan one since the objections from the US date all the way back to the Biden administration. This in the form of warnings and letters.

Throughout the years, though, the Canadian governments response has been either to not comment on this growing problem at all or respond with a deer in headlights look and blankly say that the legislation ‘falls in line with all of our international trade obligations’. So, adopting a real head in sand approach to all of this. Since the mainstream media supports both bills with the extremely short sighted view of “if it hurts the online platforms, it’s good for me” ideology. So, the stereotypical stupidity of mainstream media, really.

Of course, when the Trump administration took over, the pressure on Canada dramatically escalated. While the Biden administration was much more diplomatic in trying to talk Canada down from international trade suicide with both the Online Streaming Act and Online News Act, the Trump administration took a much more sledgehammer approach and started just burning down international bridges to achieve their goals regardless of if those goals made sense or not. This after his massive campaign to tariff everyone and damn the consequences.

To be clear, the Online Streaming Act and Online News Act are, in fact, violations of CUSMA/USMCA. Both are bills aimed at unfairly targeting American businesses. The Online News Act is especially egregious in that it targets explicitly Meta and Google – both American companies. The Online Streaming Act similarly violates the trade agreement thanks in part to the framing that makes it coincidentally target American companies. This was never really in dispute and a fact supporters typically respond with a milquetoast response of ‘yeah, but they are good bills, so what’s the big deal?’ Yeah, violating the trade agreement because you have a good feeling about isn’t going to fly with the Americans – and rightfully so.

Last year, in response to the Online Streaming Act, Online News Act, and Digital Services Tax, Trump abruptly halted trade talks over these bills. This, unsurprisingly, caused a massive panic on Canada’s side of things. So, in response, they initiated the process of rescinding the Digital Services Tax just to restart trade talks. While the Canadian mainstream media whined about this (again, because they saw one method of hurting online platforms slip through their fingers), this was actually a fantastic news story for Canadians as it represented one less way that the cost of living was going to go up even higher. Had that gone forward, the Digital Services Tax would’ve been passed onto consumers and everything would just plainly get more expensive. That was the reality of the situation no matter how many times advocates say this was about getting platforms to “pay their fair share”. It was always Canadians that were going to be on the hook for that just like Americans being on the hook to pay for all of Trumps tariffs. That was made abundantly clear when it was announced that Canadians will start getting refunds as this gets rescinded.

While one bad internet bill is going down in flames, that leaves the other two bad bills (Online Streaming Act, Online News Act). Indeed, as recently as last month, US lawmakers have been challenging those bills with one bill being tabled to challenge the Online Streaming Act. This was after both laws were explicitly mentioned as trade barriers.

To this day, the government as adopted the “just ignore it and it will all go away approach”. It’s similar to a kid who lights a bunch of matches in a closet, starts a fire, and decides to just leave and close the closet and pretend nothing is happening. Sure, it may be out of sight and out of mind for a while, but the fire is only going to expand and start burning things down. The warnings and letters were the smell of smoke filling the house and the bills and challenges is the heat rising. Canadian lawmakers are continuing to ignore the whole thing even as this battle grows increasingly difficult to ignore.

Well, that fire is only continuing to spread. Recently, the USTR (United States Trade Representative) released a National Trade Estimate Report. The report can be found here, but if you want to read the full report yourself, you can also do so here (PDF). It’s a long report, but Canada was, in fact, singled out for a variety of reasons. One of those reasons was the Online Streaming Act:

Online Streaming

The Online Streaming Act, passed in April 2023, amended the Broadcasting Act to give the CRTC authority to impose conditions on the operation of online streaming platforms. CRTC regulations issued in June 2024 require certain streaming services to contribute annually 5 percent of their Canadian revenues to support the Canadian broadcasting system, beginning in the broadcast year 2024 to 2025. The rules include criteria that, based on available information, may effectively exclude Canadian streaming services from the new obligations. In August 2025, U.S. companies made the first payments required under the Online Streaming Act. In November 2025, the CRTC issued new requirements under the Act to promote and prioritize Canadian content on streaming services. The United States will closely monitor the implementation of the Act and any USMCA implications.

Probably not a big surprise that the Online News Act also got an explicit mention:

Mandatory Bargaining Code
On June 22, 2023, the Canadian Government passed the Online News Act (Bill C-18). Under the Act, designated platform services companies are required to engage in negotiations with Canadian news providers to pay the news businesses for content accessed via certain services offered on the companies’ digital platforms. The Act gives the CRTC new powers to regulate the Canadian news industry, including determining who is a journalist and what is an eligible news business, and calculating compensation. The United States continues to monitor this issue.

Moreover, the Digital Services Tax is still something that the US is apparently monitoring:

Digital Services Taxation
On June 20, 2024, Canada enacted a digital services tax (DST), imposing a 3 percent levy on certain gross revenues relating to online marketplaces, online targeted advertising, social media platforms, and user data. The DST entered into force on June 28, 2024. Canada’s DST was retroactive to January 1, 2022, and companies were required to remit payments starting on June 30, 2025. The DST applied to taxpayers with annual global revenues of €750 million (approximately $833 million) or more and Canadian digital services revenue of more than CAD $20 million (approximately $14 million). In August 2024, the United States requested consultations with Canada under USMCA Chapter 31 concerning the DST.

On June 29, 2025, Canada announced it would “soon bring forward legislation to formally rescind the DST” and halted the collection of its DST. On September 13, 2025, Canada’s Minister of Finance and National Revenue committed to bring forward legislation at the earliest opportunity to repeal the DST, with retroactive effect as of June 20, 2024, the date of its original enactment. This legislation would also provide that DST payments received by the Canada Revenue Agency would be refunded with interest, at the rate generally applicable to corporate tax refunds, payable from the day the payment was received. On November 18, 2025, Canada introduced the formal repeal of the DST in its annual budget implementation bill. As of December 31, 2025, the DST had not been repealed.

So, while efforts to repeal the Digital Services Tax does please the US, the US is saying that the law has not been formally repealed. This, admittedly, is a bit confusing to me because I thought this was law and the Digital Services Tax was repealed. The last time I checked in was in November when a bill was tabled formally saying that the Digital Services Tax is getting repealed. That was the last I personally heard about this. In looking this bill up in the bills pages, Bill C-15, the bill in question, shows that it has received Royal Assent. In looking at the bills page, there was activity in 2026. So, the best guess I can come up with is that this report was put out before the last bit of activity took place. As a result, I don’t see this really being an issue given that as far as I can tell, the issue is resolved.

Anyway, this report clearly shows that the Online Streaming Act and Online News Act is still formally in the line of fire for US trade representatives. That has never really slowed down as far as I can tell and will continue to be an issue that will dog the Canadian government.

One element in all of this is the fact that he CCIA (Computer & Communications Industry Association) has been pushing back against both Acts. Back in January, they published their comments with the USTR, saying the following:

The Computer & Communications Industry Association has filed comments in response to the Office of the United States Trade Representative’s (USTR) request for comments on the 2026 Special 301 Report, highlighting IP-related trade barriers facing U.S. exporters. CCIA also filed an intent to testify at the February 18 public hearing on the matter.

CCIA’s 2026 comments focus on the trade-distortive effects of ongoing link taxes and bargaining codes in Australia, Canada, Indonesia, and the EU, alongside streaming content quotas in Australia, Canada, and Brazil. A primary addition to CCIA’s submission this year is a dedicated section on restrictive AI regulations and licensing mandates in jurisdictions such as Brazil, India, and the EU, and their threats against innovation.

The following can be attributed to CCIA’s Vice President of Digital Trade, Jonathan McHale:

“Service suppliers, including IP-intensive exporters, face an increasingly hostile global landscape based on unwarranted market interventions by governments in many markets. Protectionist content quotas, news bargaining codes, and a troubling rise in restrictive AI regulations pose a substantial threat to American technological preeminence. The Special 301 Report is a critical mechanism to flag these barriers to ensure that foreign mandates do not suppress the productivity gains driven by U.S. digital services.”

You can read their full comments here or here (PDF). Here’s part of their comments:

CCIA reiterates longstanding concerns regarding the spread of unbalanced ancillary copyright regimes in foreign markets in the form of link and snippet taxes, as well as other frameworks that utilize similar objectives through mandated collective bargaining or other collective payment mechanisms.

Studies based on the experience of countries that have implemented such laws, including studies commissioned by the European Parliament and European Commission, have demonstrated that they fail to meet stated objectives. The European Parliament JURI Committee report observed that it was “doubtful that the proposed right will do much to secure a sustainable press” and that the “effect of the snippet tax was to add additional entry costs for new entrants into those markets. . . . In turn, it cements the position of incumbents and reduces incentives to innovate.”

International research has also highlighted the detrimental impacts on local publishers. A European Commission document made available online stated that the “available empirical evidence shows that news aggregators have a positive impact on news publishers’ advertising revenue” and that a press publishers’ right would do little to address perceived risks created by news aggregation platforms. The Spanish Association of Publishers likewise observed that “[t]here is no justification – neither theoretical nor empirical – for the existence of the fee since aggregators bring to online publishers a benefit rather than harm” and that “[t]he fee also has a negative impact for consumers, due to the reduction in the consumption of news and the increase in search time.”

An academic article also looked at the failure of Spain’s and Germany’s ancillary rights legislation, observing that the snippet taxes led to a decrease in visits to online news publications. The analysis noted that the shutdown of Google News in Spain “decreased the number of daily visits to Spanish news outlets by 14%” and that “effect of the opt-in policy adopted by the German edition of Google News in October of 2014 . . . reduced by 8% the number of visits of the outlets controlled by the publisher Axel Springer.”

The comments also touches on Canada specifically in regard to the Online News Act:

The Online News Act entered into law in June 2023, and implementing regulations were published in December 2023. Digital platforms must self-designate if they have a “strategic advantage” in the online news market under specific thresholds. Under the law, these designated platforms have an obligation to negotiate payment agreements with news businesses, or will be subject to final offer arbitration. The law also prohibits these firms from giving “undue preference” to news content, which could restrict the ability of covered services to moderate content and prevent misinformation online.

One of the U.S. companies subject to the law has secured an exemption from the law under criteria that would require it to pay C$100 million annually to Canadian news organizations and the second U.S. company has ceased to host links to news content in Canada.

Even if not fully tested, the law remains an incipient threat to U.S. companies and is the government’s leverage to extract fees. The law has already resulted in harm to the internet landscape, consumers, and small publishers in Canada given a continued decrease in traffic and the overall chilling of innovation within the news sphere.

Last month, the U.S. government noted that the Online News Act and other Canadian cultural laws “discriminate against U.S. tech and media firms.” Absent repeal, this law still conflicts with several of Canada’s international trade obligations, so USTR should remain vigilant of any action against these two U.S. companies and any others the government may seek to scope into the law. Other U.S. companies that link to news articles could still come under consideration by the Canadian Radio-television and Telecommunications Commission (CRTC) or Canadian Heritage. Also, the fact that the popular Chinese social media service TikTok is not subject to this law, despite hosting news content on its service, raises Most-Favored-Nation (MFN) issues under both USMCA and the General Agreement on Trade in Services (GATS)

If the CCIA is wrong on any of this, I fail to see it. The Online News Act has been very detrimental to the news industry and has had a negative impact on consumers. What’s more, the Online News Act is a violation of the USMCA/CUSMA because it explicitly discriminates against US companies. So, if there is anything factually incorrect about these statements, I’m not sure how.

Given how unstable the US president is (in more ways than one), this will constantly be a problem for Canada’s trade position. The sooner Canada ditches both the Online News Act and Online Streaming Act, the better because all it does from an international trade perspective is invite trade attacks from the US. It’s a longstanding problem that isn’t going away any time soon no matter how much the Canadian mainstream media and politicians try to ignore it.

Drew Wilson on Mastodon, Twitter and Facebook.