Reps. Lloyd Smucker (PA-11) and Linda Sánchez (CA-38), along with 27 members of the Committee on Ways and Means, have sent a bipartisan letter to Canadian officials expressing concern about Canada’s digital trade policies. The letter was addressed to Canada-US Trade Minister Dominic LeBlanc and Canada’s Ambassador to the United States Kristen Hillman.
The lawmakers criticized Canada’s Online Streaming Act, arguing that it harms American companies and violates principles established in the United States-Mexico-Canada Agreement (USMCA). “While we are strong supporters of the bilateral relationship with Canada, discriminatory policies, like the Online Streaming Act, undermine the value of the United States-Mexico-Canada Agreement (USMCA),” they wrote.
The Online Streaming Act requires foreign streaming services operating in Canada to contribute five percent of their gross revenues to funds supporting local Canadian content. Lawmakers say this measure could cost U.S. companies up to $7 billion by 2030. They also note that future decisions by the Canadian Radio-television and Telecommunications Commission (CRTC) may further increase these requirements.
According to the letter: “Canada’s Online Streaming Act ‘is actively restricting access, disadvantaging U.S. companies and artists, and undermining the shared commitment to fair competition that is essential as our countries prepare for the USMCA review.'”
The legislators argue that such regulations risk discouraging foreign investment in Canada’s media sector. In 2022, global studios and streaming platforms invested $7.58 billion in production within Canada, while music streaming generated more than $422 million in recorded music revenue there in 2024. Between 2011 and 2021, international studios increased production levels in Canada by 285 percent, with most project staff based locally.
They emphasized: “This law not only endangers cross-border investment but also risks undermining confidence in Canada’s commitment to a fair and open digital marketplace at the precise moment when our countries should be working to strengthen cooperation ahead of the USMCA review.”
The letter acknowledges recent progress after Canada decided not to implement its Digital Services Tax Act but stresses that the Online Streaming Act presents an equally serious issue for trade relations.
Lloyd Smucker has served as a member of Congress representing Pennsylvania’s 11th District since 2017. He previously held a seat in the Pennsylvania Senate from 2009 through 2016 and currently resides in Lancaster County.
