Could or Would the U.S. Retaliate Against the Online Streaming Act (C-11) Now That it is Law?

Canada has just enacted legislation to give the broadcast regulator, the Canadian Radio- television and Telecommunications Commission (CRTC), authority to regulate online streaming platforms, both domestic and international. This legislation, known as Bill C-11 as it passed through an extensive parliamentary review process, was highly controversial. The bill empowers the CRTC to review and possibly amend the definition of “Canadian content.†It will also require that streaming services contribute financially to the production of Canadian content and will impose “discoverability†requirements on digital streaming platforms (like YouTube, Spotify, Netflix and others) to ensure that Canadian content is promoted. The CRTC will have broad leeway to issue and enforce regulations to achieve these ends. The U.S. high-tech and streaming industry does not like this legislation and has used various tactics to oppose it. Among these are arguments that C-11 violates commitments that Canada made to the United States in the Canada-U.S.-Mexico Agreement (CUSMA), the replacement for NAFTA, and that implementation of C-11 will result in U.S. trade retaliation. This paper analyzes the arguments to this effect put forth by the U.S. tech industry’s trade association, the Computer & Communications Industry Association (CCIA), and refutes them, particularly the argument that Canada will need to invoke CUSMA Article 32.6 (the cultural exception clause) to justify its actions. At the same time, the paper cautions that the CRTC needs to be careful with respect to imposing a requirement on foreign streamers to contribute to Canadian production if at the same time it denies them the ability to acquire and exploit the production they have helped finance when no such limitation is imposed on equivalent Canadian streaming services.