The six-year review of the Canada-U.S.-Mexico Agreement (CUSMA) formally began on March 17, with bilateral talks between Mexican and U.S. trade officials. It’s not clear when bilateral Canada-U.S. talks will begin, or when Canada may be brought into the Mexican talks as expected.
The goal of the negotiations is to agree (or not) to extend CUSMA for a further 16 years, with or without amendments to the agreement. While Canada and Mexico have signalled their preference to renew the agreement and hopefully reduce U.S. tariffs to zero, the Trump administration will use the opportunity to extract political concessions from its neighbours.
In addition to the long-standing dairy dispute, the United States has argued that Canada’s Digital Services Tax (paused by Prime Minister Carney last year), Online News Act and Online Streaming Act are discriminatory. United States Trade Representative Jamieson Greer included the latter two cultural policies on his list of “issues” that must be dealt with in the CUSMA review.
The Online Streaming Act finally brings online streaming services, such as Netflix or Amazon Prime, under meaningful regulation through the Broadcasting Act. The legislation entails a requirement for these firms to invest in, or contribute financially to, the creation, production and distribution of Canadian stories and music programming, and creates obligations for the dissemination and discoverability of Canadian stories and music.
The act and related Canadian Radio-television and Telecommunications Commission (CRTC) decisions are expected to generate about $200 million per year in new contributions from online streaming services to support Canadian and Indigenous content.
The policy has received strong support from many Canadian creators and industry groups. Warren P. Sonoda, chair of the Directors Guild of Canada, says it demonstrates the government’s continued commitment to supporting the Canadian film and television industry and will help create a fairer competitive environment between traditional broadcasters and online streaming platforms.
The policy has also been criticized by international industry groups. Wendy Noss, president of the Motion Picture Association–Canada—which represents Disney, Netflix, Paramount, Prime Video & Amazon MGM Studios, Sony, Universal and Warner Bros. Discovery—claims the policy could make it more difficult for streaming platforms to collaborate with Canadian creators and invest in globally competitive productions.
Between 2008 and 2020, the combined revenues of Canada’s broadcasting television, radio, newspapers and magazines declined by nearly $6 billion. Between 2010 and 2016, at least one-third of journalism jobs across the country disappeared. Since 2008, more than 470 news media outlets have closed nationwide. Meanwhile, in 2020, Canada’s online advertising revenue reached $9.7 billion, with more than 80 per cent flowing to Google and Meta.
Disruption from platform-dominated information distribution is also the justification for Canada’s Online News Act. The act requires online platforms, including social media services, to financially compensate news outlets for distribution of news content. While supporters of the act believe it will help protect the local news industry, U.S.-based platforms have fiercely resisted the funding requirements.
In 2023, Meta (formerly Facebook) chose to block news content on its platforms in Canada rather than abide by the new law. The company is in consultations with the federal government related to reversing that decision. Until that happens, small publishers cannot share or access news on social media platforms such as Facebook and Instagram, which has significantly limited the reach of local news media.
The two acts expand the definition of cultural industries for the digital age and specify the CRTC’s regulatory authority. Following a series of public consultations, the CRTC announced several regulatory measures to bring each of the new policies into force.
Online Streaming Act
First, to keep track of who’s operating in the streaming industry in Canada, the CRTC requires most streaming service firms to register as such and provide basic information about their business. Smaller players (with revenues under $10 million a year) are exempt, as well as firms focused only on video games or audiobooks.
Second, streaming services that are not exempt can operate in Canada only if they comply with stricter transparency requirements. These include disclosing basic business, user and financial data when requested; avoiding undue preference or disadvantage (e.g., not boosting their own content or preferred partners while quietly sidelining competitors); reporting annual revenues generated in Canada; and not tying content to specific internet or mobile subscriptions (i.e., making access to content conditional on using a particular carrier or service).
Third, non-exempt streaming services must pay broadcasting regulatory fees. Smaller, standalone services get a break: the first $25 million in Canadian revenue is exempt. For larger corporate groups, revenues from services earning more than $2 million a year are pooled, with the group receiving a single $25 million exemption before fees apply.
Fourth, beyond regulatory fees, the CRTC now requires large streaming platforms to pay five per cent of their Canadian broadcasting revenue to support domestic and Indigenous content. Only services earning over $25 million a year (or part of a group above that threshold) must contribute. Revenue from audiobooks, video games, podcasts and user-generated content is excluded.
Last but not least, the CRTC has updated what counts as Canadian content, introducing stricter certification rules that place greater emphasis on Canadian involvement in production, ownership and the creative process.
Online News Act
The Online News Act requires large search engines and social media platforms (e.g., earning over $1 billion in global revenue or reaching at least 20 million users in Canada) to contribute funds to media outlets whose content is shared over these online services. Platforms can avoid mandatory bargaining with the CRTC if they reach sufficiently fair agreements with eligible Canadian news outlets, including Indigenous media.
The CRTC regulations effectively codify Google’s deal with the federal government. While they do not name Google explicitly, the wording in section 9(2) of the regulations clearly targets the dominant search engine. In practice, that platform can avoid mandatory bargaining if it pays about $100 million a year to Canadian news outlets, with payments rising over time.
Section 10 of the regulations allows platforms to strike deals with groups of news outlets, but the money must be shared fairly. Payments are generally based on the number of journalists producing original news, with limits to prevent broadcasters and the CBC from taking too large a share. Finally, Section 7 of the regulations requires news outlets to spend most of the compensation they receive on producing news content.
What comes next
The USTR has not said that Canada’s Online Streaming Act or Online News Act are non-compliant with CUSMA. If the agency believed they were, at any point the U.S. could have requested consultations with Canada as part of the “New NAFTA” dispute resolution process.
The agency’s 2025 National Trade Estimate report complained that the Online Streaming Act may effectively exclude Canadian streaming services from the new obligations while preventing U.S. suppliers from accessing the funding mechanisms they would be required to pay into. The report said the USTR would “closely monitor” the act and the bargaining-and-payment regime in the Online News Act.
Given the Trump administration’s record of imposing tariffs on countries whose digital trade and cultural policies harm Silicon Valley profits, we should expect the USTR’s 2026 National Trade Estimate Report to up the rhetorical ante against Canada.
In its submission to the USTR consultations on the forthcoming report, the Coalition of Services Industries (CSI) says the Online Streaming Act, and potentially the Online News Act, are inconsistent with CUSMA and urges Canada to ensure that implementation does not impose undue burdens on non-Canadian digital services. Other U.S. industry groups and lobbyists have taken a similar position.
On March 18, House Republicans introduced legislation to investigate Canada’s Online Streaming Act, asking the USTR to determine whether it constitutes an unfair trade practice targeting U.S. businesses. A finding of such under Section 301 of the Trade Act of 1974 would lay the groundwork for higher tariffs on Canada irrespective of whether the policies violate any terms in CUSMA.
The proposed investigation adds to mounting U.S. pressure on Ottawa to drop the Canadian cultural policies as part of the CUSMA review. The federal government’s Digital Services Tax flip-flop last year provides a worrying precedent.
In support of Canada, the international Digital Trade Alliance argued the United States should not treat the Online Streaming Act and Online News Act as trade barriers. Rather, the group emphasized the need to preserve policy space for governments to regulate the digital ecosystem in the public interest and cautioned against turning the annual National Trade Estimates report into a vehicle for industry complaints.
The submission further warned that targeting such regulations could undermine digital rights and make the United States appear inconsistent, given its own efforts to regulate and contain the market power of Big Tech domestically.
While criticizing Canada’s cultural policies as discriminatory local content requirements, President Trump has also complained that foreign incentives, including in Canada, unfairly attract film production away from Hollywood. The president has suggested imposing heavy taxes on films produced outside the United States. These threats, while still only vague Truth Social posts, are not idle.
The Trump administration has used recent “reciprocal” (actually one-sided) trade agreements to lock in broad digital trade disciplines that can constrain future foreign regulation affecting U.S. online platform firms. Articles 3.1 and 3.2 of the U.S.-Argentina agreement, for example, prohibit Argentina from imposing digital services taxes or introducing measures that discriminate against U.S. digital services or digitally distributed products. The U.S.-Ecuador agreement contains similar non-discrimination commitments and goes further by ensuring the free transfer of data across borders, barring discriminatory digital services taxes, prohibiting certain market entry conditions such as forced technology transfer or domestic preference requirements, and banning customs duties on electronic transmissions.
Prime Minister Mark Carney acknowledged U.S. concerns with the Online News Act in August 2025, suggesting that the government could seek to amend or repeal the law in view of its allegedly disruptive impact on the dissemination of news and information online. Identity and Culture Minister Marc Miller stated that Ottawa is willing to be “flexible” on the Online News Act and the Online Streaming Act in light of evolving trade negotiations, but emphasized that the United States cannot dictate terms and that there are lines the government will not cross.
The CUSMA review puts Canada in a very awkward position with respect to these new cultural polices. The Trump administration does not care whether they violate the agreement—only whether they can use the threat of abandoning CUSMA, combined with a possible Section 301 investigation, to score a win for politically powerful U.S. social media and search platforms.
As with dairy supply management, it may be possible to refine rather than abandon the policies; in this case, to reduce features of the Online News Act and Online Streaming Act that appear discriminatory in law or in effect, ensure more even access to funding mechanisms, and design obligations that are functionally neutral while still advancing public interest goals.
The question for Canada is: why bother? Why change cultural policies that may comply with CUSMA to save an agreement the Trump administration has itself ignored in favour of unilateral trade coercion against friends and foes alike?
