American pressure on Canada’s digital media policies is intensifying, with U.S. Ambassador Pete Hoekstra calling on Ottawa to repeal its streaming tax law just days after Canada’s broadcast regulator announced it would triple the existing charge on major platforms.
Hoekstra made the remarks on May 28, following a meeting with executives from leading American streaming companies who warned that the Canadian Radio-Television and Telecommunications Commission’s Online Streaming Tax would ultimately hurt the very industry it claims to support. In their view, the levy would discourage investment and hollow out job opportunities in Canada’s creative sector the opposite of what policymakers in Ottawa say they intend.
“This unfair tax will drive up costs for Canadian consumers and targets U.S. companies. This law should be immediately repealed,” Hoekstra said, making clear that Washington views the measure as discriminatory rather than a legitimate cultural policy tool.
The controversy centers on Canada’s Online Streaming Act, which the CRTC began implementing in 2024 with an initial 5 percent contribution requirement on streaming platforms. The revenue was earmarked to fund Canadian and indigenous content production. U.S. heavyweights including Netflix, Apple, and Paramount pushed back almost immediately, challenging the rules in federal court.
Then on May 21, the CRTC escalated the situation considerably announcing it would raise the tax to 15 percent for online broadcasters pulling in more than $25 million annually from Canadian subscribers. The regulator simultaneously restructured obligations for traditional broadcasters, lowering their required contribution from a range of 30 to 45 percent down to 25 percent, a move critics say unfairly shifts the burden onto foreign digital platforms.
The CRTC maintains the revised framework will generate $2 billion to support Canadian and indigenous programming, including French-language news and a newly proposed fund for services deemed of “exceptional importance” to Canadians.
Hoekstra had already signaled Washington’s displeasure the day after the announcement, issuing a statement on May 22 accusing the CRTC of “targeting and taxing U.S. companies, putting up new, discriminatory trade barriers, and worsening the investment climate for American businesses.”
The timing couldn’t be more fraught. Canada and the United States are navigating a sensitive period ahead of renegotiations under the Canada–United States–Mexico Agreement (CUSMA), and Washington has already flagged the Online Streaming Act as a trade irritant in that context. Ottawa’s response has been to argue the legislation falls within the cultural exemption enshrined in the trade deal a position the U.S. side has not accepted.
Peter Menzies, a former CRTC vice chair who now serves as a senior fellow at the Macdonald-Laurier Institute, noted that American frustration with Canada’s digital regulations predates the Trump administration and has been building for years. The new ruling, he told The Epoch Times, will almost certainly make an already tense atmosphere worse. Menzies also suggested the Canadian government would likely lean on the CRTC to revisit its decision to avoid further inflaming the trade talks.
The pushback isn’t only coming from south of the border. Conservative Leader Pierre Poilievre sent Prime Minister Mark Carney a public letter on May 25 urging him to scrap what he called the “Netflix tax hike.” Poilievre argued the measure sends exactly the wrong signal to investors and trading partners at a time when Canada needs to project stability and openness.
“While Canadians are struggling with the cost of filling up their tank and their grocery cart, they don’t need another tax on watching their favourite show, movie or listening to their favourite song,” Poilievre wrote.
Culture Minister Marc Miller acknowledged the controversy on May 21, saying on X that the Liberal government is actively reviewing the CRTC’s decision. He struck a careful tone, stressing the importance of ensuring Canadians continue to see their stories and culture reflected on screen while stopping short of either defending or disavowing the regulator’s move outright.
With trade negotiations looming, pressure building from Washington, and political opposition sharpening domestically, the Carney government faces a narrow path forward one that must somehow balance cultural sovereignty with the economic realities of an increasingly strained relationship with its largest trading partner.
