Washington has escalated its concerns about the trade implications of Ottawa’s online streaming and online news bills, prompting a legal expert to predict the issue will be raised during President Joe Biden’s planned visit to Canada in March.
Deputy United States trade representative Jayme White stressed “ongoing concerns” about the two Canadian bills at a meeting last week with Rob Stewart, Canada’s deputy minister for international trade.
Senior Democrat and Republican senators on the influential U.S. Senate finance committee also weighed in last week, writing a letter to U.S. Trade Representative Katherine Tai about Canada’s “troubling policies,” which they said target U.S technology companies.
Both bills are making their way through Canada’s Parliament. Bill C-11 reached a third-reading debate in the Senate on Tuesday.
The U.S. is concerned that the two bills unfairly single out American firms, including Google, Facebook and Netflix.
Bill C-11 would update Canada’s broadcast laws, giving the Canadian Radio-television and Telecommunications Commission (CRTC) the power to regulate streaming platforms such as Netflix, YouTube, Amazon Prime and Spotify.
The streaming platforms would have to promote Canadian content – including films, TV shows, music and music videos – and fund its creation.
Bill C-18 would force Google and Facebook to strike deals with news organizations, including broadcasters, to compensate them for using their work. The CRTC would have a role in overseeing the process.
Two sources told The Globe and Mail that the CRTC’s lack of experience regulating print media and digital platforms was raised by Ms. Tai and her team in previous talks with Canada’s Trade Minister, Mary Ng. The Globe is not naming the sources because they were not authorized to speak publicly on the issue.
A U.S. readout of Mr. White’s meeting with Mr. Stewart said the American official had “expressed the United States’ ongoing concerns with … pending legislation in the Canadian Parliament that could impact digital streaming services and online news sharing and discriminate against U.S. businesses.”
Shanti Cosentino, a spokeswoman for Ms. Ng, said the Minister “has reiterated to Ambassador Tai that both Bill C-11 and C-18 are in line with our trade obligations and do not discriminate against U.S. businesses.”
Last week, Democrat Ron Wyden, chairman of the U.S. Senate committee on finance, and Republican Michael Crapo, a senior member of the committee, raised concerns in a letter to Ms. Tai that the bills could breach the terms of the United-States-Mexico-Canada Trade Agreement (USMCA).
Michael Geist, the University of Ottawa’s Canada Research Chair in internet law, said the intervention from both parties means it is now likely the issue will be on the agenda when Mr. Biden visits Canada.
“To see this raised in a bipartisan manner by two U.S. Senators from the powerful finance committee suggests that the issue is gaining traction in Congress,” he said.
The senators urged Ms. Tai to take enforcement action if Canada fails to meet its trade obligations.
Their letter said the online streaming bill would “mandate preferential treatment for Canadian content and deprive U.S. creatives of the North American market, access they were promised under USMCA.”
It added that Bill C-18 “targets U.S. companies for the benefit of Canadian news producers and raises national treatment concerns under USMCA.”
But Toronto-based trade lawyer and former diplomat Lawrence Herman, founder of Herman and Associates, said the U.S. politicians’ intervention is “a reflection of a well-orchestrated lobbying effort by the major digital platforms.”
He said there is no evidence that either bill discriminates against American companies.
“Canada is well armed to defend any trade complaint,” he said.
On Thursday, as Canada’s Senate debated Bill C-11 at third reading, Senator Dennis Dawson, sponsor of the bill in the Senate, said the legislation has been thoroughly scrutinized and should now be passed.
The Senate was due to begin debating C-18 this week. But that could now be delayed because of an error in the printed text of the bill sent over from the Commons, the Speaker of the Senate said.
The incorrect text included a sub-amendment that had not actually passed in a Commons committee. It will now have to be pulped and reprinted.