October 9, 2024 | 09:30 AM – 12:00 PM ET | Rideau Club, Ottawa

By invitation only. If interested to attend, please email us at [email protected].

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Summary

Moderated by David Perry, President and CEO of the Canadian Global Affairs Institute, the conversation featured insights from Graham Davies, President and CEO of the Digital Media Association; Dr. Meredith Lilly, Simon Reisman Chair at Carleton University; and Patrick Rogers, CEO of Music Canada. Together, they painted a nuanced picture of the Act's trade, cultural, and economic repercussions of Canada’s newly enacted Online Streaming Act (formerly Bill C-11).

A key point of concern was the "Cultural Exemption" clause, a relic of trade agreements like NAFTA and now enshrined in the USMCA that Canada uses to justify policies favouring domestic cultural content. Dr. Lilly emphasized that this clause has not been updated since 1994—a time when the internet was in its infancy and streaming services were unimaginable. As a result, the exemption does not explicitly cover digital media, online platforms, or the internet, which weakens Canada’s defence of the Online Streaming Act under current trade rules. Lilly argued that this leaves Canada vulnerable to U.S. retaliation. The USMCA retaliation clause allows the U.S. to respond by imposing sanctions of equal commercial value on Canadian industries completely unrelated to culture. “Triggering an exemption for digital content in 2024, under an agreement signed in 1994, is risky," Lilly noted, warning of potential escalating trade disputes.

Rogers added another layer of complexity by questioning the Act's premise. For decades, Canadian cultural policy has been based on regulating traditional media like radio and television to support Canadian content (CanCon). But Rogers argued that applying these same principles to streaming platforms is misguided. "Streaming and radio are not the same; the similarities stop at 'you listen to it with your ears,'" Rogers quipped, underscoring the fundamental differences between curated, linear radio broadcasts and the personalized, on-demand nature of streaming.

While acknowledging the importance of promoting Canadian content, Davies warned that imposing regulations based on outdated models could stifle innovation and limit access to global markets. He noted that streaming platforms have already democratized the music industry, offering Canadian artists unprecedented access to global audiences. "Any artist can use the service to find their voice, and any consumer can discover new music. The barriers have never been lower," he said. Davies also noted that music streaming services operate on thin margins, with a significant portion of their revenues already flowing to rights holders. Additional financial burdens, like the 5% content contribution mandated by the Act, threaten to reduce innovation and investment in the Canadian music ecosystem. "This is not the ceiling; it's the floor," Davies remarked, alluding to the potential for even higher costs imposed by government regulation.

The conversation also touched on the broader political and trade landscape. Dr. Lilly highlighted that U.S. trade representatives have already requested consultations, a preliminary step toward formal dispute resolution. With bipartisan support from 19 congressional representatives, there is a clear appetite in Washington to challenge Canada's digital policies. The looming U.S. election only adds urgency, as a shift in administration could lead to a more aggressive stance on trade enforcement.

The panel made clear that while Canada’s cultural policies have served the country well in the past, clinging to outdated frameworks could do more harm than good in today’s digital-first world. If Canada hopes to avoid a costly trade dispute with its largest trading partner, it must modernize its approach to both culture and trade in the digital age.

Canadian Global Affairs Institute

The Canadian Global Affairs Institute focuses on the entire range of Canada’s international relations in all its forms including (in partnership with the University of Calgary’s School of Public Policy), trade investment and international capacity building. Successor to the Canadian Defence and Foreign Affairs Institute (CDFAI, which was established in 2001), the Institute works to inform Canadians about the importance of having a respected and influential voice in those parts of the globe where Canada has significant interests due to trade and investment, origins of Canada’s population, geographic security (and especially security of North America in conjunction with the United States), social development, or the peace and freedom of allied nations. The Institute aims to demonstrate to Canadians the importance of comprehensive foreign, defence and trade policies which both express our values and represent our interests.

The Institute was created to bridge the gap between what Canadians need to know about Canadian international activities and what they do know. Historically Canadians have tended to look abroad out of a search for markets because Canada depends heavily on foreign trade. In the modern post-Cold War world, however, global security and stability have become the bedrocks of global commerce and the free movement of people, goods and ideas across international boundaries.
Canada has striven to open the world since the 1930s and was a driving factor behind the adoption of the main structures which underpin globalization such as the International Monetary Fund, the World Bank, the World Trade Organization and emerging free trade networks connecting dozens of international economies. The Canadian Global Affairs Institute recognizes Canada’s contribution to a globalized world and aims to inform Canadians about Canada’s role in that process and the connection between globalization and security.

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