Canada rolls back Online Streaming Act to avoid 50% US tariffs

This reversal fundamentally shifts the regulatory landscape for international streamers platforms in Canada, removing controversial funding requirements and taxes that American officials deemed discriminatory. By discarding the Online Streaming Act, Canada is signaling a retreat from a protectionist digital culture policy to preserve critical physical trade sectors like steel and autos which remain under threat. For the global streaming market, this suggests that local content investment mandates are increasingly vulnerable to high-stakes trade retaliation between major economic partners. Executives should monitor whether this capitulation prompts similar regulatory rollbacks in other markets facing trade pressure, as well as the outcome of intensified negotiations before the August 19 deadline.

The reversal follows a period of intense friction over the Canadian Radio-television and Telecommunications Commission (CRTC) plan to implement the Online Streaming Act. Per the Hamilton Independent in May 2026, the CRTC had proposed tripling the registration fees for major streaming services from 5% to 15% of total Canadian revenue to fund local content. This move drew immediate bipartisan condemnation from Washington, with U.S. Trade Representative Jamieson Greer identifying the legislation as a major hurdle in trade talks. By June 2026, the Canadian government had already begun signaling a shift, promising a $600 million payout to the domestic audiovisual sector to compensate for lost revenue as it prepared to override the CRTC decision in favor of wider trade stability, according to reporting from Michael Geist.

Simultaneously, the decision to scrap the 3% digital services tax (DST) resolves a conflict that dates back to the Trudeau administration. Per Global News in June 2025, the Carney administration had initially paused the DST to restart negotiations, but the tax remained a "deal breaker" for U.S. Commerce Secretary Howard Lutnick. The Trump administration specifically cited the DST and the Online Streaming Act as examples of Canada effectively forcing American firms to subsidize Canadian industries. While Ottawa has now moved to eliminate these digital levies, trade experts noted in a July 2026 CBC interview that Canada has already made significant concessions—including the bridge revenue split—without yet securing the removal of U.S. duties on steel and aluminum. Prime Minister Carney has stated that additional changes to provincial liquor laws remain a possibility but must be part of an overall deal to preserve the United States-Mexico-Canada Agreement.