The Trump administration has repeatedly explained that it is merely charging admission to the world’s biggest consumer market with its policy of steep tariffs on imported goods.
Canada has tried the same thing, more narrowly applied, with its Online Streaming Act. The law is intended to protect and, with luck, further strengthen Canada’s cultural industries.
It is supposed to do that by collecting fees from Netflix, Disney+, Amazon Prime and other foreign streamers that collectively reap between $5 billion and $6 billion a year from the lucrative Canadian market.
The fees, amounting to an estimated $750 million to $900 million, would be allocated to a cash-starved Canadian film and TV sector that the Trudeau government, which launched this initiative in 2020, believed to be in crisis.
So, how is that going?
Not well.
The streamers, all U.S. firms, refuse to pay. With court actions and other delaying tactics, they have relentlessly fought the levy since it was first proposed six years ago.
The streamers and Tinseltown writ large fear a bad example in Canada, which they have chosen as the hill to die on lest European, Asia Pacific and Latin American economies get the same idea.
The streamers are among the biggest enterprises on Earth, and their business is global. They were powerful to start with, given the worldwide audience for American culture. And they became more so last year with the return to the White House of Donald Trump, who cossets Hollywood and Big Tech generally.
As if those weren’t liabilities enough, the Online Streaming Act had a turbulent birth. It was the subject of prolonged and bitter Parliamentary debate and a death on the order paper when an election was called.
And once the revived bill was finally passed, the Canadian Radio-Television and Telecommunications Commission (CRTC) dragged its feet in enforcing it. That gave the law too little time to prove its worth in bolstering the Canadian cultural sector, making it tough to defend in upcoming Canada-U.S. trade negotiations.
Then, sticking a pin in the eyes of the U.S. media moguls and Washington trade hawks, the CRTC decided this year to triple its planned fee imposed on foreign streamers to 15 per cent of their Canadian revenues.
Trump had already declared that the Canadian streaming act would have to rewritten. That was taken to mean he expected it to be scrapped altogether if there was to be any chance of a renegotiated Canada-U.S.-Mexico Agreement (CUSMA).
More recently, Trump’s top trade negotiator, Jamieson Greer, said the streaming law was among the major trade “irritants” holding up a resolution of the Canada-U.S. trade dispute.
That all became water under the bridge when the Carney government last month caved to the U.S. pressure, ordering the CRTC to “review” its controversial hike in streamers fees, which had been in place for just two weeks.
The CRTC functions as a semi-independent agency. But any semblance of its autonomy ended with that rather crude government intervention in its affairs.
Accused by the Canadian film and TV industry of selling out to U.S. media firms, Ottawa suddenly discovered that planned federal streamer fees were an unfair financial burden on Canadian subscribers to U.S. streaming services.
In early June, the federal Department of Canadian Heritage said “The CRTC’s new requirements” — meaning the higher streamers fees — “would impose new costs on the companies providing these services, which could ultimately fall on Canadian consumers through higher prices.”
The Carney government would have been credible in casting its policy reversal as a balm in the cost-of-living crisis had critics not warned for years about streamer rate hikes resulting from an Online Streaming Act.
Adding to the uncertainty, for opponents and champions of the Online Streaming Act alike, Marc Miller, the federal identity and culture minister, pledged to continue trying to extract from streamers some kind of financial contribution to the Canadian media industry.
Miller will hit legal and other roadblocks in any efforts squeeze the streamers for funds, part of a continuum of U.S. streamer obstructionism dating from 2020.
Carney did not leave the Canadian film and TV sector high and dry. To cover the loss of anticipated funds from the planned streaming levies, Carney committed $600 million a year to the industry to cover the shortfall.
But it has not been an ennobling experience to watch a G7 country fumble the task of protecting its cultural sovereignty.
Fortunately, the film and TV industry is not in crisis after all. Some industry experts now say it is enjoying a golden age. It contributes almost $12 billion to the economy and employs an estimated 180,000 people.
Now, imagine how many more stories like “Heated Rivalry” and “Schitt’s Creek” the industry could tell if the streamers contributed their fair share to a Canadian industry that nurtures so much of their talent, in front of and behind the camera.
