Peter Menzies: US Trade Talks an Escape Hatch for Canada’s Internet Policy Blunders

Commentary

Canada’s efforts to harness the changes and challenges posed by the internet age may just have come a cropper.

Predictably, both the Online Streaming Act and the Online News Act have been targeted by U.S. President Donald Trump as his country heads into renegotiation of the U.S.-Mexico-Canada Agreement (USMCA) on trade.

Both pieces of Canadian legislation were passed in the spring of 2023 when Justin Trudeau was prime minister. His successor, Mark Carney, was forced by Trump to cancel the implementation of a third folly, the Digital Sales Tax, last summer.

The Online Streaming Act (Bill C-11) put all video and audio internet content under the authority of the Canadian Radio-television and Telecommunications Commission (CRTC) by amending the Broadcasting Act and has preoccupied the regulator ever since. While both the Heritage Minister of the day, Pablo Rodriguez, and CRTC chair Vicky Eatrides expressed confidence that it would be largely implemented by the end of 2024, that has not happened. Instead, and as predicted by those of us with experience in these matters, the CRTC has lumbered through the process, provoked three separate court challenges from the offshore streaming companies and, as 2025 concludes, still isn’t close to spiking the ball in the end zone (although it did just declare that streamers will have to begin providing described video).

The law was intended to shift the burden of funding for those involved in the Canadian film and television industry from domestic cable companies, which are in decline, to foreign streamers such as Netflix, Disney+, and Spotify. Already unpopular with the Biden administration, there was little likelihood it would pass muster with Trump.

The CRTC, also predictably, has proven incapable of coping with the additional workload despite having added 50 percent to its staff numbers in the past two decades. It put broadcasting licence renewals on autopilot, denying the holders the flexibility they are used to. Disputes drag on interminably and destructively; eight of the 11 decisions it has rendered under the streaming act have taken at least eight months, and three more than a year. A twelfth—the one where the rubber really hits the road—was anticipated in January but, given that U.S. Trade Representative Jamieson Greer has now made public the Trump administration’s concerns, could be stuck on the shelf for quite some time. Seeing as that decision was expected to provide enhanced subsidies for broadcast newsrooms, expect more layoffs and increased demands for greater direct government subsidies.

If this occurs, the CRTC and the industries that depend upon it will enter a period of dark uncertainty and rue not wrapping this up a year ago as promised. As Ferris Bueller has reminded us, life happens fast.

Rodriguez, who left federal politics to become leader of the Quebec Liberal party only to resign due to an alleged vote-buying scandal, also shepherded Trudeau’s other digital tragedy, the Online News Act, through Parliament. Trump doesn’t like that one either, and nor should anyone in the Canadian news industry. That includes those who shamelessly used their products to lobby for it by spreading the fantasy that their content was so wildly popular that “web giants” were stealing it.

Instead of forcing Meta and Google to pay hundreds of millions of dollars to the news industry in exchange for their carriage of links to news stories, the legislation resulted in both withdrawing from commercial agreements with publishers, and Facebook no longer permitting the posting of links to news stories. That practice, according to Meta, had an annual value of close to $220 million to publishers, who got some consolation in the form of a $100 million annual fund created by Google as a form of ransom to get excluded from the act.

Very broadly, both acts were the result of a government—Trudeau’s—that, while progressive in almost every way imaginable, could not wrap its head around the revolution that was triggered by the invention of the internet and Sir Tim Berner-Lee’s World Wide Web. Rather than take on the difficult task that was needed—developing 21st-century legislation to address 21st-century developments—it and many in the industries involved took the easy way out and assumed, foolishly, that they could stuff everything into 20th-century structures.

As a result, a Canadian film and television industry that had experienced a decade of unprecedented prosperity is now facing decline and uncertainty. While the legislation is only one factor involved in the downturn, it is front and centre when it comes to investment hesitancy.

Both of these acts were bad ideas. Each is wrapped in an emotional flag. Carney would be wise to get to work immediately on—while ensuring offshore streamers contribute appropriately to the treasury—sensible replacements for both the Online Streaming Act and the CRTC.

Ditching the Online News Act would also do everyone a favour. Sure, there will be squawking and squealing and failures. But it’s long past time the stubble was burned off to make way for green shoots. The pain can all be blamed on Trump.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.