(Ottawa) There are already voices in the United States claiming that American online streaming companies are being unfairly targeted by the new 5% contribution that will be required of foreign services.
The Canadian Radio-television and Telecommunications Commission (CRTC) this week ordered foreign streaming companies, such as Netflix and Spotify, to pay 5% of their revenues made in Canada.
These sums – 200 million per year, estimates the CRTC – will be redistributed in particular for the production of local news on radio and television. The CRTC also promises to support “French-language content, Indigenous content and content created by and for groups deserving of equity, official language minority communities.”
Members of the US Congress and trade associations have expressed concerns about this mandatory contribution, which they say discriminates against American companies. Some associations have even raised the idea of imposing retaliatory measures.
The U.S. Embassy in Ottawa said it is closely monitoring developments regarding the Online Streaming Act.
The new mandatory contribution was introduced as part of a regulatory process aimed at having the CRTC implement this Liberal government law.
“We encourage Canada to consider the input of U.S. stakeholders when implementing this legislation.”
The law, passed in Parliament just over a year ago, aims to level the playing field between “web giants” and “traditional broadcasters,” who already contribute heavily to Canadian content.
But according to Tiffany Smith, vice-president of the National Foreign Trade Council of the United States, the CRTC underestimates the investments that American television and film production companies are already making in Canada. These investments include the transfer of technology and training, to “help build” Canadian cultural industries, according to her.
However, Ms. Smith deplores that from now on, American companies are required to “even more finance the work of people in another country, which is one of our most important allies and trading partners”.
There are provisions in the Canada-United States-Mexico trade deal that would allow the U.S. government to retaliate and seek compensation if it wanted to, Smith argued. “On the other hand, I can’t assume what the government would do,” she said.
Federal Trade Minister Mary Ng insisted throughout the legislative and regulatory process that this law was consistent with trade rules.
A spokesperson for the U.S. Trade Representative said his office was reviewing the regulations and would continue dialogue with Canadians.
