In Ottawa, former chief trade negotiator Steve Verheul suggested that Canada could better defend its digital regulations by forming a united front with allies like the European Union. The discussion highlighted growing friction between Ottawa and Washington over laws targeting major American technology firms.
The digital battleground of the Online News and Streaming Acts
Canada is entering a period of heightened trade tension centered on its attempts to regulate massive American technology companies . According to the report, former negotiator Steve Verheul believes that the United States will continue to challenge Canadian policies like the Online News Act and the Online Streaming Act. These laws, which aim to address digital sovereignty and data control, are viewed by Washington as discriminatory measures against U.S.-based firms.
The conflict is not merely about content, but about the fundamental control of data and digital infrastructure within Canadian borders. Verheul noted that the "real battleground" in the coming years will involve the sovereign cloud issue and broader digital sovereignty, as the U.S. continues to flag these policies as trade irritants.
Retaliation risks for the canola and automotive sectors
The use of Canada's cultural exemption in trade deals could trigger unexpected economic consequences for non-cultural sectors. Meredith Lilly, a professor at Carleton University's Norman Paterson School of International Affairs, warned that if Canada uses these exemptions to demand money from American tech giants,the U.S. might retaliate by targeting products like cars or canola.
This creates a precarious situation where the interests of the cultural sector could clash with the broader Canadian economy. Lilly suggested that while the United States may have previously tolerated the cultural exemption for arts subsidies, it is unlikely to accept a model where American firms are forced to provide financial contributions to subsidize Canadian content without being able to acces those same funds.
The Montreal summit and the EU associate membership proposal
Canada is looking toward Europe to find strength in numbers against American digital trade pressure. As reported by the source, European Commission President Ursula von der Leyen has suggested that Canada could become the first associate member of the European Union.. This potential deepening of ties is expected to be a central theme at the upcoming Canada-EU Summit in Montreal at the end of October.
Building a coordinated policy front with the EU could significantly increase the leverage of Canadian regulators. Eric Miller, president of the Rideau Potomac Strategy Group, pointed out that if major markets like Canada and the EU coordinate policies that are unfavorable to large U.S. tech companies, the collective impact on those firms would be substantial. Miller cited Netflix as a prime example, noting that the company earns more than half of its revenue outside the United States.
The disagreement between Dominic LeBlanc and Jamieson Greer
Trade officials remain divided on the exact cause of the current friction between Canada and the United States. While Canadian Trade Minister Dominic LeBlanc suggested in late August that the U.S. had moved past concerns regarding "discoverability," U.S. Trade Representative Jamieson Greer has pointed to a different issue.
The core of the disagreement remains unverified: is the conflict about how content is found on platforms, or is it about mandatoy financial contributions? Greer has indicated that the primary U.S. concern is the requirement for streaming companies to provide funds for Canadian content, a specific proposal that the Liberal government has recently begun to back away from.
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