Month: June 2026

Copyright Developments in New Zealand: Going in the Right Direction

Flag of New Zealand featuring a blue field with the Union Jack in the canton and four red stars with white borders representing the Southern Cross constellation.

Image: Wikimedia (Public domain)

New Zealand is proposing to introduce a number of optional updates to its Copyright Act when it enacts required changes to bring legislation into compliance with two treaties it has signed. This is good news for creators. Still to be addressed, however, is the thorny issue of AI training on copyrighted content.

New Zealand needs to make some required legislative changes to its Copyright ordinance as part of implementing two treaties it has signed, the UK-New Zealand Free Trade Agreement (FTA) and New Zealand’s FTA with the European Union. In both cases New Zealand has agreed to extend its term of copyright protection from life of the author plus 50 years to “life plus 70”, as well as preventing the circumvention of TPMs (technical protection measures, aka “digital locks”) except in specified narrow situations. These provisions must be enacted by May of 2028. They will bring New Zealand’s copyright law into alignment with most of its major trading partners. However, while there is a legal requirement to address the above two issues, the Ministry of Business, Innovation and Employment (MBIE) has proposed that a number of other copyright issues also be addressed as part of the process of updating the Act. These include;

  • supporting not-for-profit gallery, library, archive and museum (GLAM) organisations to preserve and provide access to collections, including by allowing use of orphan works, making digital copies for preservation and access, and applying research and private study copying rules across all GLAM organisations, with safeguards for copyright owners
  • introducing a new fair dealing exception for parody and satire, applying across a wide range of works while maintaining authors’ moral rights
  • providing courts with a framework to order internet service providers to block access to overseas websites primarily engaged in copyright infringement, with appropriate safeguards and flexibility
  • removing an outdated peer-to-peer file-sharing enforcement regime that is no longer used, reducing compliance costs for internet service providers
  • enabling copyright licensing organisations to take collective action on behalf of copyright owners to prevent infringement
  • clarifying that the first distribution right is only exhausted where the copyright owner has consented to the overseas sale of copies, supporting control over parallel imports of infringing copies
  • changing the default rule for commissioned works so that creators are the first copyright owners unless agreed otherwise
  • extending resale royalty rights for visual artists by 20 years to align with the longer copyright term.

It is encouraging to see New Zealand take this opportunity to review and update its copyright framework while it implements the needed changes to meet its trade agreement commitments. Canada was also required to extend its copyright term as a result of the new NAFTA agreement with the United States, and it did so, at the last minute. However, it did the minimum required and passed on the opportunity to address wider issues, of which many have been identified by Parliamentary committees, while more are coming forward as a result of developments in AI.

The proposed changes in New Zealand should be welcomed by the copyright and copyright-using community. They will provide legal protection for the sort of digital replication that the GLAM sector needs to preserve older and orphan works, although more information on what how the research and private copy rules will be implemented is needed. Widening fair dealing to include satire and parody has been done in a number of jurisdictions, and this will bring New Zealand in line with other Commonwealth countries like Australia, Canada and the UK that have such exceptions (“parody, caricature, and pastiche” in the wording of the UK legislation). In the application of the defence, New Zealand courts should follow the Australian lead, where courts have kept a tight rein on this defence. Parody is a tricky exception to invoke, as a recent UK case well illustrates. The moral rights of the author are also a factor to consider.

For the first time, site-blocking (that is, requiring ISPs to block pirate offshore websites, after legal review) will have a firm foundation in New Zealand law. Australia has had such legislation on the books for more than a decade, and the UK for longer than that. Both the UK and EU treaties required New Zealand to allow the courts to issue injunctions “against an intermediary whose services are used by a third party to infringe intellectual property rights.” Canada has dealt with this issue through the courts exercising their inherent jurisdiction without the enactment of specific site-blocking legislation, with initial challenges from some ISPs being dismissed on appeal. The process has now become routine. It seems the New Zealand government intends to ensure clarity by amending copyright legislation to “provide courts with a framework to order internet service providers to block access to overseas websites”. IP scholars in New Zealand, such as Prof. Graeme Austin, have been calling for the government to take the lead. It seems they have been heard.

The empowering of collective management organizations (CMOs) to take legal action against infringers on behalf of their members is also an important step. Under present provisions, CMOs cannot bring actions because they do not hold the rights to individual works. This requires multiple authors either to take individual actions or join in a joint action. Given the cost of such an exercise, this is not feasible (large publishers who have licensed rights from authors may be in a position to do this, but authors themselves are hamstrung). Giving their collective management organization the right to represent them is a positive move. This is a move that Canada could well replicate to enable CMOs like Access Copyright to represent authors.

Changing the default rule for commissioned works will, for example, give photographers greater control over their work. Clients can contract for the right to display copies of the work but the copyright in the original work will belong to the creator. The same is true for artistic works unless there is a specific agreement that the work is created under an employment contract. Canada enacted this provision in 2012 when it passed the Copyright Modernization Act. Extending the resale royalty rights for authors to match the longer copyright term keeps these two provisions in alignment. New Zealand, like Australia and the UK, and EU member states, has enacted an Artists’ Resale Right (ARR), which allows a small portion of the proceeds of a resale of artwork through a professional dealer to be paid to the original artist (or their estate). Canada has been promising for several years to enact an ARR but has not yet done so.

The one big issue this round of copyright amendments will not address is use of copyrighted content for AI training. That is a rapidly evolving issue in many countries and is a moving target. The solution, as suggested in this article by Prof. Austin, is to foster market solutions, that is facilitating the licensing of content to AI developers. The way not to do this is to provide a wide exemption for AI training, as many in the tech world are advocating, but to ensure that rightsholders have the right to protect their content and to grant access to it on terms that they agree to. This is already happening in a number of areas such as licensing agreements between major publishers, news enterprises, and the AI industry, but individual authors are still being left out of the discussions.

 Australia has just ruled out creating a fair dealing exemption for AI training (known as the TDM or Text and Data Mining exemption). Even the notoriously anti-copyright Productivity Commission supports this position. Such an exemption would remove any incentive for AI developers to negotiate with rightsholders for use of content. Hopefully New Zealand will follow suit in this regard. While we will have to wait for further developments when it comes to dealing with AI issues, the current set of proposals will be very useful in renewing and updating the copyright framework in New Zealand.

© Hugh Stephens, 2026. All Rights Reserved.

The AI Copyright Crisis Contains an Opportunity for which Publishers have Waited Centuries

A promotional graphic for Citations LLC, featuring the tagline 'Rights-aware AI access infrastructure' and three services: REVEAL™ (Semantic extraction engine), CITATIONS GATEWAY™ (Access & transaction engine), and CITATIONS CORE™ (Settlement & analytics engine). The design has a dark blue background with gold text.

We read daily about new lawsuits brought by rightsholders against AI developers, strategy papers floated by governments seeking to solve the riddle of reconciling copyright and AI, and declarations issued by authors proclaiming the end of human creativity. The creative community seems to have coalesced around the principles of transparency, permission and remuneration but the tools to effect those key elements remain elusive. The AI community would generally prefer not to pay or ask permission but is gradually accepting the need to license content. Yet there is still a technical gap in terms of knowing what content has been used, when and how. Without that knowledge, the principles of permission and remuneration are left treading water. The blog post below by Jim Bryant, Co-Founder and CEO, Citations LLC, offers potential solutions to this challenge, and I offer it to you as a possible pathway forward. I have no financial interest in Citations LLC, nor did they pay me to post this information. It is presented as a contribution to the search for a world where copyright and AI can co-exist for mutual benefit. (Hugh Stephens)

A problem or an opportunity?

Imagine a student in Montreal asks an AI assistant a question about traditional Chinese medicine, in French. The AI answers fluently — in French — drawing on the Encyclopedia of China, a monumental work with over 125 million characters that has never been translated into any language.  Now imagine the same student switches to English and asks a follow-up question. The AI answers again, equally fluently, in English. The student is satisfied. The publisher gets nothing. No notification, no attribution, no compensation. They don’t even know it happened.

This scenario is entirely plausible with current AI technology. And while it represents a genuine copyright problem — real-time AI translation of a protected work, without license, in a jurisdiction whose law was not written to contemplate it — it also represents something else: an extraordinary, unrealized opportunity.

For the first time in the history of publishing, the technology exists to know, at the moment it happens, that someone in Montreal, Mumbai, or Mexico City is asking a question that your content just answered. The question is whether publishers will help build the systems to capture that signal — or whether they will leave it entirely to the AI companies, who are already building without them.

Publishers have always been flying blind.

Think about what publishers have never been able to know — and what AI companies, for the first time, can. An AI system that has trained on your works without permission is, in effect, drawing on your content every time it answers a relevant question. Which of your titles is it using right now, and where? Which readers are getting answers derived from your content without ever being directed back to the original? Which backlist titles are generating AI responses in markets where you have no distribution and no visibility? Which gaps in your catalogue are readers repeatedly trying to fill — and how would you know, if the only signal is buried inside a system you have no access to? The argument for independent monitoring infrastructure is not only about compensation. It is about visibility. Publishers are currently funding AI responses with their content and receiving nothing in return — not money, not data, not even the knowledge that it is happening.

For centuries, publishers sent their works into the world and largely lost sight of them. Sales data arrived months or years later, filtered through agents, booksellers, distributors, and described what sold — not what readers wanted but couldn’t find. The feedback loop from reader demand to editorial decision has always been slow, indirect, and incomplete.

A properly instrumented knowledge access infrastructure changes all of that. Real-time query data across AI systems is, in effect, a continuous signal of what readers want — more granular, more current, and more honest than any market research tool the industry has ever had. That data is a byproduct of the same system that creates the copyright exposure publishers are currently fighting in court.

The moment of demand is the moment to act.

Here is the specific opportunity that AI creates, and that no prior technology has made possible: when an AI system surfaces content in response to a query, it creates a demonstrated moment of demand. A reader who just received an AI-generated answer drawn from a specific book is, at that moment, maximally interested in that book. That is the moment to offer them the chance to borrow it from a library, purchase it from a retailer, or access an authorized digital edition.

Rather than substituting for the book, the AI interaction becomes the discovery mechanism that leads to it. Publishers have spent decades trying to close the distance between the moment a reader becomes interested in a title and the moment they act on that interest. AI closes that distance to zero — but only if the infrastructure exists to capture it. Without that infrastructure, the moment passes, the reader moves on, and the publisher never knew the opportunity existed.

Libraries are being bypassed — and publishers are losing their best customers. Libraries are among the largest single customers some publishers have. A major academic or reference publisher may depend on library subscriptions for a substantial share of its revenue. AI is disrupting that relationship in ways that have received too little attention. When a patron who would previously have borrowed a book — or prompted their library to acquire it — instead receives an AI-generated answer derived from that same book, the library never makes the purchase, the publisher never sees the revenue, and neither institution knows the transaction occurred. The AI company captures the value; the library loses a use case; the publisher loses a sale. The institution most structurally committed to legal, compensated access to knowledge is being systematically bypassed by systems that obtained that knowledge without payment.

The same logic applies to real-time trend identification. Aggregate query patterns across an AI knowledge system are a leading indicator of what readers want — not what they bought last quarter, but what they are looking for right now. Which subjects are rising? Which titles are being asked about in markets where they have no distribution? Which authors are generating interest that isn’t yet reflected in sales? This intelligence, continuously available, would transform publishing from a reactive industry into a responsive one.

The translation question is the hardest — and the most important.

The Encyclopedia of China example is worth dwelling on, because it illustrates both the opportunity and the complexity in their sharpest form. That encyclopedia has never been translated — into French, English, or any other language. The economics of translation have made it prohibitive: 125 million characters, uncertain commercial return, no obvious path to a global audience. As a result, it has been accessible only to readers of Chinese. That constraint has nothing to do with the quality or the importance of the content.

AI removes that constraint entirely. In this hypothetical, a reader anywhere in the world could ask the encyclopedia a question in their own language and receive an answer. This is, genuinely, one of the most remarkable things that AI makes possible: the dissolution of language as a barrier to knowledge, overnight, at no marginal cost.

But it raises a set of copyright questions that existing law is not equipped to answer. A real-time AI translation is, in the most precise legal sense, the creation of a derivative work — at the point of query, in a foreign jurisdiction, without a license, without attribution, and without compensation to the original publisher. It is not covered by any existing text-and-data-mining exception, because it is not mining — it is real-time derivation. It is not covered by fair use or fair dealing analysis that was designed for static reproduction, not dynamic on-the-fly translation.

And yet the underlying interest of the publisher is not to prevent this from happening — it is to be compensated when it does, and to have some say in how their content is represented. A framework that would allow the publisher of the Encyclopedia of China to authorize AI-mediated translation under defined conditions, receive a per-query payment, and have the source attributed, would serve everyone’s interests. The absence of such a framework means the publisher gets nothing, the AI company gets everything, and the reader gets an answer of uncertain provenance.

The ten copyright challenges — briefly.

It is worth cataloguing the specific challenges, because they are often discussed in isolation when they actually share a common cause. The publishing industry currently faces at least ten major copyright issues arising from AI:

AI training — whether training on copyrighted works requires permission and compensation, currently being litigated in multiple jurisdictions.

Transparency — AI developers do not disclose what content their models were trained on, making it impossible for rights holders to assess exposure or negotiate terms.

Reproduction — models can and do reproduce passages that closely approximate protected expression, as documented in peer-reviewed computer science research.

Market impact — AI summaries and Q&A responses can substitute for the original work, displacing revenues that would otherwise flow to the publisher.

Derivative works — the degree of transformation required to render AI output non-infringing remains genuinely unsettled, particularly for outputs that blend multiple protected sources.

Attribution — AI outputs routinely fail to identify the works they draw on, undermining both the moral rights of authors and the practical basis for any royalty mechanism.

Compensation — no industry standard governs AI licensing fees; per-query, per-token, and blanket models are all being proposed, with no settled framework.

Retrieval — retrieval-augmented generation systems access copyrighted content at inference time, raising rights questions distinct from and additional to those arising from training.

International law — training data crosses borders; copyright law does not; EU, US, UK, Japanese, and Canadian frameworks diverge in ways that create genuine compliance complexity.

Auditability — without verifiable records of what was accessed, when, and in what context, no licensing agreement is enforceable and no royalty calculation is credible.

These are not ten separate legal problems. They are ten symptoms of one missing piece of infrastructure: a neutral, independent system for monitoring how AI systems access and use copyrighted content, reporting on that usage in real time, and enabling settlement between AI platforms and rights holders on the basis of verified data rather than estimates.

Why the infrastructure must be independent.

This point deserves emphasis, because there is a tempting shortcut that would not actually work. Publishers cannot rely on AI developers to build and operate the systems that monitor AI’s use of their content. The conflict of interest is structural: the party whose compliance is being measured cannot be the party doing the measuring.

What is required is a neutral layer — operated independently of both AI developers and publishers — that records access events, aggregates usage data, reports to rights holders, and enables automated settlement. Think of it as the knowledge economy’s equivalent of a financial clearinghouse: not owned by any single participant, trusted by all of them, and essential to the functioning of the market.

This is not a novel concept — it is exactly the model that makes collective rights management organizations function in the music industry and payment card networks function in financial services. Every industry that has needed to account for consumption at scale and distribute revenues to multiple rights holders has eventually built a neutral clearinghouse.

The window is open — but not indefinitely.

Canada’s AI strategy, recently released, makes almost no mention of copyright or the rights of content creators — a significant omission that Hugh has written about on this blog. The European Parliament’s work on AI and copyright has moved further, but still focuses primarily on training rather than on the access and retrieval layer where the most tractable opportunities lie.

The practices governing how AI systems access knowledge are being established right now, largely by default. The companies building AI systems are not waiting for a legal or regulatory framework; they are building, and the norms are hardening around what they build. Publishers who are not at the table when that infrastructure is designed will find themselves subject to whatever framework others have built for them.

Copyright law exists to balance access and incentive — to ensure that knowledge can circulate while the conditions that make knowledge production sustainable are preserved. AI does not change that objective. It changes the technical conditions under which the balance has to be achieved. The good news is that those technical conditions, for the first time, make real-time monitoring, attribution, and settlement not just possible but straightforward.

The question is not whether AI will access books. It will. The question is whether publishers will be watching when it does — and whether they will have built the systems to act on what they see.

That system already exists. It logs the moment, attributes the source, and settles the account — not as a future framework, but as infrastructure operating today. It’s called Citations, and it’s already watching.

* * *

About the author

Jim Bryant is the co-founder and CEO of Citations LLC, which has built the independent infrastructure for rights-aware AI access to authoritative content — enabling real-time monitoring, attribution, and settlement between AI platforms and publishers. See how it works at: citationslogic.ai.  Jim previously founded ProCD, one of the first CD-ROM reference publishing companies; managed Information Please, which became one of the most visited reference destinations of the early internet; and founded Trajectory, which developed and deployed natural language processing algorithms to read and extract structured metadata from over one million books in English and Chinese.

(c) Citations LLC, 2026

The Artists’ Resale Right in Canada: Many Promises but No Delivery (Let’s Get on With It)

A speaker in a suit addresses an audience in an art gallery, while attendees hold up numbered paddles during a bidding event.

Image: Shutterstock

The recent sale, or re-sale to be more exact, for $5.7 million of a 1948 painting by the late BC artist E.J. Hughes (“Coastal Boats Near Sidney, BC”), who spent much of his life in relative poverty, reminded me that the oft-promised but yet-to-be-delivered Artist’s Resale Right (ARR) in Canada is still in limbo. Canadian artists are still waiting for its implementation. Introduction of an ARR was first discussed more than a decade ago when in 2013 Independent MP Pierre Nantel introduced a motion to this effect. Later a private member’s bill was introduced by Liberal MP Scott Simms, but it did not get to Second Reading. In 2019, a Parliamentary Committee (Shifting Paradigms) recommended that the government establish an ARR.  Introduction of an ARR was part of the Liberal Party election platform in 2021 and after its re-election, the mandate letter issued to the then Minister of Innovation, Science and Industry, François-Philippe Champagne included instructions to “Work with the Minister of Canadian Heritage to amend the Copyright Act to further protect artists, creators and copyright holders, including to allow resale rights for artists.” In 2022, the Globe and Mail reported that the Industry and Heritage ministers at the time were working on reforms to the Copyright Act to include an Artists’ Resale Right. There was also speculation it would be included in a Canada-UK Trade Agreement, but that agreement is still under negotiation some four years later. More recently, reference to an ARR was included in both the 2024 Economic Statement and the 2025 Federal Budget. In the case of the budget, the precise wording was:

“Artists, particularly visual artists, are great contributors to Canada’s cultural scene and among the lowest income earners in Canada despite their significant cultural contributions. An Artist’s Resale Right provides the creators of original visual artwork with a royalty whenever their work is resold through an eligible sale, providing an additional income stream. In Budget 2025, the government announces its intent to amend the Copyright Act to create an Artist’s Resale Right in Canada, ensuring Canadian visual artists benefit from future sales of their work.”

That budget has now been passed but there was no mention of amendments to the Copyright Act or the introduction of an ARR in Canada in the omnibus Budget Implementation Bill. So close yet so far. You could be forgiven for asking, “Just what is going on?”

Let’s look at what an ARR is—and is not. It is similar to a royalty stream enjoyed by writers but adapted because of the nature of the work. While books are widely distributed and thus an author can earn royalties each time a book is initially sold, a visual artist gets to sell an original work but once. The principle of the ARR is that where sales of artistic works (works of graphic or plastic art such as pictures, collages, paintings, drawings, engravings, prints, lithographs, sculptures, tapestries, ceramics, glassware and photographs) take place beyond the initial sale, a small proportion of the re-sale price is remitted to the original artist or their estate, with post-mortem payments limited to a specified number of years. Often there is a sliding scale for payments, with the percentage going to the artist decreasing as value increases. Sometimes there is a ceiling beyond which a resale royalty is not levied. There can also be a ceiling on the amount paid. The cost is normally paid by the seller, or sometimes the purchaser, but not by the dealer. It is not a tax on art nor is it funded by the taxpayer. Works not sold through an art professional, such as a private sale or sale to a museum, are exempt from the ARR. One assumes a Canadian ARR would follow similar principles.

I started writing about the ARR back in 2021. At that time, as today, advocacy was led by CARFAC (Canadian Artists Representation), representing Canadian artists, and its sister Quebec-based group, RAAV (Le regroupement des artistes en arts visuels du Québec). They pointed out that Canada is one of the few countries not to have an ARR provision in law. They also pointed out that the establishment of an ARR would have an outsized impact on artists who achieved prominence only later in their careers and who often sold early works for a pittance. This is especially true of First Nations and Inuit artists. Finally, they highlighted that if Canada establishes an ARR—which would apply to foreign works resold in Canada as well as Canadian works—then Canadian artists would be eligible for reciprocal treatment in countries where an ARR has been established, such as the 27 member states of the EU, the United Kingdom, Australia, New Zealand, to name a few. The law would be designed to avoid providing ARR payments to artists from countries that do not themselves recognize a resale right. This relates primarily to the United States, which does not have an ARR at the federal level.

As I noted, these lobbying efforts seem to have fallen on fertile ground given all the declarations of intent, despite a counter-campaign by the art dealer community. Most dealers would naturally oppose any provision that could make sales of art more expensive or complicated, despite the fact that the cost is borne by the seller or purchaser, although I would note that some dealers think establishing an ARR is the right thing to do. Yet despite repeated promises from government, there is still no action. Despite amending more than 30 statutes, ranging from the obvious ones like the Income Tax Act to legislation such as the Judges Act, the Human Pathogens and Toxins Act and the Aeronautics Act, and repeal of the Digital Sales Tax, to mention but a few, the omnibus Budget Implementation Act (Bill C-15), which received Royal Assent on March 26 of this year, did not touch the Copyright Act. But as far as I am aware, there is no indication the government intends to renege on its commitment. So, why hasn’t it followed through? Is it inertia? Legislative overload? Distraction?

It’s not clear why this is still unfinished business but it’s time the government delivered on its promises. Surely there is no need for further consultation. This provision has been consulted to death. The ARR has been a proven instrument to protect and promote artist welfare in many countries. At a time when Canada needs to strengthen its identity and culture, the ARR is an established way to support the visual arts at no cost to the taxpayer. The tantalizing but frustrating on-again, off-again nature of the ARR needs to be settled once and for all. Canada’s artists have already been waiting too long for some relief.

Prime Minister Carney, Minister Miller (Identity and Culture Minister). It’s time to get on with it.

© Hugh Stephens, 2026. All Rights Reserved

Canada’s National AI Strategy “AI for All”: Does Copyright Exist in the AI World?

A futuristic robotic figure with glowing blue accents, portrayed in a tech-inspired environment. A 'no copyright' symbol is visible in the corner.

Image: Shutterstock.com (adapted, clumsily)

If it does, you would never know it from reading Canada’s new AI strategy just released by the Minister of Artificial Intelligence and Digital Innovation, Evan Solomon. It is a magistral document, addressing key elements of AI under six pillars: (with my shorthand summary in brackets)

  • Protecting Canadians and safeguarding democracy (addressing trust, safety and privacy concerns)
  • Empowering Canadians (promoting AI literacy and economic opportunity)
  • Powering AI adoption for shared prosperity (accelerating adoption, especially for SMEs)
  • Building a sovereign AI foundation (building domestic compute, cloud and connectivity infrastructure)
  • Scaling Canadian champions (more government funding for domestic AI development)
  • Building trusted economic and governance partnerships and global alliances (leading the creation of a multinational middle power alliance to curb the power of hegemons and hyperscalers)

The latter objective will no doubt go down really well with the Trump Administration!

Those six headings cover just about all aspects of AI, from its creation to its use to its impact on the economy, on society and on individuals. But in all 50 pages of the document, as far as I can ascertain, you won’t find the word “copyright”, although “protecting intellectual property” is certainly featured. The intellectual property rights that are mentioned have nothing to do with the rights of those whose content was used without authorization to create AI but rather relate to protecting the intellectual output of AI developers in Canada. John Degen, CEO of the The Writers’ Union of Canada (TWUC) was the first to call this out. Given the make-up of the task force that produced the report, this is not surprising. While it was made up of the great and the good from the AI world, with academics, financiers, CEOs, cybersecurity experts, innovators, educators and so on as part of the roster, there was not a single representative from the cultural community.

There are many elements of AI this document tries to address, all of them important to a country like Canada, although there are limits to what can be done by a middle power given that the lead on development has been seized by a handful of large companies, mostly in the US. The US government itself is caught in the dilemma of wanting the US to lead AI development yet not becoming overwhelmed by it to the point that a few major corporations are calling all the shots.

As for content issues, including what must surely include some copyrighted content, they are addressed only indirectly in the Canadian strategy. The three principal issues relating to content are; (1) privacy and access to data; (2) Canadian identity and culture; and (3) AI misuse, such as creation of deepfakes and misinformation.

On privacy and data, the document notes that AI is only as powerful as the data it can access (how true!). It reminds us that governments in Canada hold vast amounts of data that should be treated as a strategic national asset and mobilized to fuel innovation and productivity (i.e. provided for AI research). Thankfully, there is a tip of the hat to the need for “strong privacy protections” but there is no mention of the unauthorized scraping of databases and protected content by AI developers, both domestic and international. Privacy is important but so is ownership of content, and the right to grant permission to use it. Unfortunately, this latter point is not mentioned.

Protecting and promoting Canadian identity and culture is also mentioned as an important goal. It is obvious that if AI developers are blocked or hindered from ingesting Canadian content, then there will be less of Canada reflected in AI outputs. That argument was put forward recently by Michael Geist in a blog post criticizing recommendations issued by the Parliamentary Standing Committee on Heritage that had called for protection of the property rights and interests of artists through the Copyright Act on the basis of authorization, remuneration and transparency. This would lead to “AI without Canada”, according to Prof. Geist. This could be true if AI developers did not need or want curated Canadian content, but they do. The solution, as I pointed out, is not to give away everything in the shop window by creating a broad AI training exception in Canadian copyright law–which would amount to legalized theft, but instead to facilitate licensing solutions by resisting the smash-and-grab. Applying the existing legislation will incentivize the AI industry to strike deals with rightsholders. In other words, they will pay a negotiated amount for the products on display. That’s the best way to get more Canadian content into AI.

On the identity issue, the government’s summary document has this to say:

“Canadian AI must support, reflect, and project Canadian culture, which includes our customs, our history, and our heritage. Canadian voices, languages, communities, and knowledge must also be represented in how AI systems are designed, built, and used. Given our diverse and multicultural society, our approach to AI must acknowledge and support this rich diversity, including strengthening the French language by capturing and projecting its idioms, expressions, and cultural contexts.”

The best way to do this is to ensure that quality content in both official languages is made available to AI developers. As I have stated above, the fairest and most efficacious way to do this is through content licensing. Broad copyright exceptions will not facilitate licensing discussions. In fact, they do just the opposite by encouraging avoidance of dealing with rightsholders.

Regarding misinformation and deepfakes, this is a huge concern, and not just in Canada. Various legislative solutions have been proposed such as the bipartisan NO FAKES Act, currently working its way through the US Congress (opposed, as usual, by the internet libertarian organization, the Electronic Frontier Foundation). Other countries, such as Denmark, are addressing the issue through amendments to copyright law, giving individuals the reproduction rights to their image and voice. The UK has an anti-deepfake law on the books, introduced earlier this year, but Canada is still struggling to get its Online Harms legislation, after a couple of false starts, finalized and across the line. Re-introduction of that legislation is expected imminently, and will likely include social media restrictions on children, a highly controversial issue.

Privacy in relation to access to data, cultural identity, and misinformation including deepfakes are all content issues that Canada’s AI strategy will need to address. And so is copyright, although not mentioned in the strategy. Putting the best possible gloss on things, perhaps it is just as well there was not some throwaway line in the strategy pointing to the need to provide wider access to copyrighted content to ensure that Canada remains competitive on AI. That is the argument often employed by those who want freer access to “OPC” (Other Peoples’ Content). The argument is that “Everyone else is doing it (i.e. giving it away–which is factually untrue), so we have to as well in order to stay competitive”. Maybe silence was better than saying the wrong thing in this document.

In the absence of any reference to copyright issues, the last word must rest with Heritage and Identity Minister Marc Miller who spoke recently to the press after the National Summit on Artificial Intelligence and Culture in Banff, AB. The Minister is quoted as saying that Canadian copyright law is already clear that artists’ work needs to be respected, and that…”the current copyright law does and should protect those that have created material, and people need to be compensated properly.”

While that is encouraging, it would have been nice to have had this reaffirmed in the AI strategy document.

© Hugh Stephens, 2026. All Rights Reserved.

The CRTC Streaming Announcement, and CUSMA: An Update (It’s Changing by the Day)

Flags of Canada, the United States, and Mexico arranged together.

Image: Shutterstock

Scarcely was the ink dry on the blog I posted on Monday, June 1, when things began to happen. The next day Canada officially informed the US and Mexico that it wished to renew CUSMA, and Dominic Leblanc, Minister responsible for Canada-US Trade (among several other responsibilities) went to Washington to meet with US Trade Representative Jamieson Greer. There he was given the laundry list of US grievances which surely included the Online Streaming Act (OSA) and in particular the CRTC decision to impose a 15% levy on the Canadian revenues of large foreign (read US) streamers to fund domestic Canadian production (only some of which the streamers could use at their discretion). The day after that, June 3, the Carney government announced that it would be providing “direction” to the CRTC to review its decision, on the basis that additional costs imposed on the streamers would likely be passed on to Canadian consumers.

To sweeten the pot, the government announced the creation of a $600 million annual fund to “provide stability and immediate support to Canada’s audio and audiovisual sectors”. This is to offset the funding the streamers may no longer be contributing, including the initial five percent contribution still held up in the courts owing to a legal appeal. Six hundred million dollars is a good chunk of change; it’s about the same amount the streamers would have contributed based on CRTC calculations estimating that the original five percent levy (currently suspended pending a decision from the Federal Court) would have generated $200 million annually. This would suggest either that the streamers may not be expected to make financial contributions or that their contributions will be additional to the base amount. Even though the government has thrown a lot of money at the problem, this has not satisfied the cultural sector however. The Coalition for the Diversity of Cultural Expression (CDCE), a major cultural industries umbrella group, has just issued a press release calling Ottawa’s request for the CRTC to reverse course “a major setback for cultural sovereignty”. The CDCE doesn’t mind the offer of $600 million. It’s just that such funding is at the whim of the government of the day whereas embedded funding through regulation of online streamers would be part of the broadcasting regulatory framework and thus more predictable and reliable.

As for the argument that a levy on the streamers would be passed on to consumers, Howard Law in his blog MediaPolicy.ca points out that “Netflix upped the price on its standard plan from $14 monthly to $15 in 2020. Then to $16.50 in 2022. Then to $19 in 2025. That was twice the rate of inflation.” But of course, no-one could blame the government for these increases. That was just greedy old Netflix. The streamers will price their product at whatever level is optimal from their perspective, just like any other business. If they price themselves too high, people will find alternatives, either a competing service or (horror of horrors), a pirated feed. The industry is well aware of the limits of consumer tolerance, particularly in this age of stressed household finances. Nonetheless, the Carney government’s “concern” for consumers is good politics.

Why didn’t the government just tell the CRTC what rate to set? By statute the government does not have the authority to reverse or overrule CRTC decisions in matters other than the issuance of broadcasting licences (the CRTC being an independent quasi-judicial body), but the government does have the authority to issue policy directives as to how legislation is to be implemented. What that guidance will be, Heritage Minister Marc Miller (the point person on this file), was not willing to say except that the amount of the streamer’s contributions would be reduced. By how much, we do not know. However, he hinted they would still be required to contribute. Once again, the CRTC will need to consult stakeholders and hold hearings. There is lots of wiggle room (or room for further negotiations with the streamers).

There was no mention of the CUSMA negotiations being a factor in the government’s decision but if you don’t think CUSMA was in play, you have been living on another planet. Nonetheless, the action the government has taken suggests it has learned a lesson from its previous policy reversal on the Digital Services Tax, when it scrapped the legislation on the very eve of implementation to appease the Trump Administration and get CUSMA negotiations back on track. That concession achieved absolutely nothing. In the case of the Online Streaming Act (OSA), it will continue in force as legislation for which the CRTC is required to develop implementing regulations. The government has signalled flexibility but has not rescinded the authority of the CRTC to regulate streaming services in Canada, nor has it definitively exempted the streamers from making a financial contribution or meeting discoverability requirements. It thus retains the OSA as a bargaining tool, something it could have done with the DST if it had only suspended the imminent application of the tax instead of withdrawing it completely. Once burnt, twice shy. Its action on the CRTC decision is exactly what it should be doing, signalling flexibility but retaining the essentials of the policy as a bargaining chip.

The other significant development on the trade negotiations front, announced coincidentally on the day that Leblanc and Greer were meeting in Washington, was the announcement by the US Trade Representative’s Office that they will be imposing tariffs ranging from 10 to 12.5 percent on over 60 sixty countries who allegedly either don’t block goods produced with forced labour or do so inadequately. Canada is one of half a dozen countries in the latter category, along with the EU. Everyone else completely fails on this score, according to USTR. Not a single country is exempted although “only” 60 of the US’s major trading partners are targeted. There will be hearings to examine the USTR announcement but the results are a foregone conclusion.

I mentioned in my earlier blog post this week that the Trump Administration will do whatever it takes to justify its unilateral imposition of tariffs, whether or not this is in violation of bilateral and multilateral treaties. Once its “fentanyl tariffs” imposed under the International Emergency Economic Powers Act (IEEPA), were overturned by the US Supreme Court, the Administration resorted to whatever other excuse it could find, including using both national security (Section 232 of the Trade Act of 1962) and balance of payments (Section 122 of the US Trade Act of 1974) as pretexts. These are “temporary” measures authorized by Congress to address specific emergencies. The Trump Administration has made a mockery of these remedies, employing them on the flimsiest of pretexts. But even these measures are time limited, (although for some the time can be measured in years). However, the Section 122 tariffs imposed in lieu of the IEEPA tariffs after they were overturned will expire in July so Trump and USTR had to come up with another justification in US domestic law to maintain their import tariffs. The answer was trade in products produced with forced labour. Suddenly, most of the world’s trading economies are accused of allowing goods produced with forced labour to undermine international markets, so sixty countries must be punished by the US through the imposition of tariffs on their exports to the US. This ludicrous misuse of Section 301 of the US Trade Act is clearly for purposes other than dealing with forced labour.  

While the US does have a robust regime to block the import of products produced with forced labour, it is far from perfect itself. According to the Canadian Centre for Policy Alternatives, a labour oriented self-declared “progressive” publication, last year the Trump administration cancelled around $577 million from the Bureau of International Labor Affairs (ILAB) in grants allocated to various programs meant to promote labour rights abroad. Also, products produced for private companies by prison labour in the US have been a concern. Last year, the University of Toronto produced a report “Uncovering US Prison Labour in Canadian Supply Chains” that concluded “the Canadian supply chain has many likely linkages to prison-made goods from the US, particularly in the automotive and food sectors.”

Canada’s hands aren’t completely clean either. Prime Minister Carney has just announced his government will introduce new legislation this month to strengthen the current Canadian ban on imports made with forced or child labour. However, while forced labour is a real issue, the USTR action is not only hypocritical, it also demonstrates the lengths to which the Trump Administration will go to use any pretext or legal loophole it can find to impose tariffs. Even if Canada had the tightest regime in the world to prevent the import of products produced with forced labour, this would not stop the US from using this, or some other pretext, to fill the tariff gap created by the collapse of the fentanyl tariffs. When the fentanyl tariffs were first announced, Canada responded by creating a “fentanyl czar” and equipping the RCMP with new Blackhawk helicopters for improved surveillance, among other measures to beef up border security. While useful, this did not exempt Canada from US tariff punishment. It wasn’t about fentanyl; it was about imposing tariffs on a trading partner that had naively expected CUSMA rules to be followed.

This has been one of the problems with CUSMA.  While—remarkably considering what has been going on in Washington– much of the trade conducted between Canada, Mexico and the US under the CUSMA/USMCA/TMEC agreement continues tariff-free (for now), the sectoral exceptions introduced by the US based on contrived grounds (e.g. the imports of fentanyl from Canada) raise the question of whether the US really intends to honour what it has agreed to, or will agree to in future. That is also a point I made in Monday’s blog when examining the issue of the Cultural Exception to CUSMA (Article 32.6) and whether the US would try to use it to impose retaliatory tariffs on Canada. Using Article 32.6 against Canada would likely fail “legally” (i.e., the OSA is not a violation of the terms of CUSMA, and therefore Canadian action to implement the legislation would not need to be justified by Article 32.6), but then the US could find another excuse if it really wanted to take action. Fentanyl, national security, forced labour, smoke from Canada. Take your pick.

Assuming the US agrees to extend CUSMA/USMCA through renegotiation, a lot will be up for grabs. For example, the US apparently wants to further increase the percentage of US and North American content in automobiles traded under the Agreement. While a good idea in principle, will it make US or North American vehicles more competitive? Maybe Article32.6, the Cultural Exception that applies only to Canada, will disappear. While in theory cultural industries in Canada can be exempted from the terms of the Agreement, the penalty for doing so is so draconian that the Exception is really more of a political fig-leaf than a policy reality, although it may salve Canadian pride. Canada for its part will want some assurances that the sectoral “national security” tariffs on steel, aluminum and lumber will be lifted and not reimposed on a whim. Whatever eventually happens, some sense of economic certainty and security will be the goal.

Right now, things are changing by the day. Stay tuned for the next update. It could be tomorrow!

© Hugh Stephens, 2026. All Rights Reserved.

The Recent CRTC Decision on US Streamers and CUSMA

Will the CRTC Decision Requiring US Streamers to Make Additional Financial Contributions to Canadian Production Lead to Retaliatory US Tariffs Impacting Other Sectors because of CUSMA’s Cultural Exception Clause?

Should Canada Rescind the CRTC Decision Now to Facilitate CUSMA Negotiations?

Logo of the CRTC (Canadian Radio-television and Telecommunications Commission) featuring stylized lettering and a circular design.

Summary

Since this is a long post on a complex subject, here is the very short version of my answers to these two questions, the Executive Summary if you will. On the first question, I posit that the CRTC decision is not a violation of the terms of CUSMA, and therefore Canada does not need to justify the CRTC measures by using the shield of the Cultural Exception, which if applied could legitimize US tariff retaliation. That is not to say that I agree with the CRTC decision in all its aspects, nor that the Online Streaming Act might not become a bargaining chip in the renegotiation of the Agreement. For the US to justify tariff retaliation on the basis that Canada was using the Cultural Exception as a shield would require a determination by a trade panel. That is most unlikely to happen. Given the general US disrespect for the CUSMA Agreement since the advent of Trump 2.0 and the way in which the US has ridden roughshod over the protections that the Agreement was supposed to provide, the niceties of its text seem largely irrelevant. US streamer’s hopes of securing protection under the CUSMA have been undermined by aberrant US trade policy. As for whether the Carney government should walk back provisions of the Online Streaming Act to facilitate CUSMA renegotiation, the Digital Services Tax climbdown illustrates well the folly of unilateral concessions. The US can wield a big stick, but Canada is not without cards to play. When you are playing with a master bluffer, don’t fold your hand early. That’s the short version. For more detail, read on.

The CRTC Announcement

Since the CRTC announced on May 21 that, among other requirements, it will increase the mandatory contribution to be made to Canadian productions by large foreign streamers (those generating in excess of $100 million annually in Canada) from 5 percent of their Canadian revenues to 15 percent, commentary—largely in the form of criticism– has come from all sides. The CRTC decision itself is not the easiest to understand even with its embedded graphic. The Motion Picture Association-Canada did not mince words;

“The Motion Picture Association strongly condemns the CRTC’s decision to impose unprecedented, unnecessary, and discriminatory investment obligations on American streaming services operating in Canada. This burdensome framework unfairly targets global streamers with requirements that directly violate Canada’s obligations under the United States-Mexico-Canada Agreement (USMCA).”

MPA-Canada and some individual streaming services have already challenged the initial five percent “downpayment” levy on the basis that the requirement for streamers to pay for local news (one of the allocations of the initial levy, not repeated in the new CRTC regulations) is a discriminatory measure exceeding CRTC authority because none of the streamers even produce news coverage. The plaintiffs also argue that the levy constitutes a tax, which is beyond the competence of the CRTC. Indeed, the taxation angle was repeated by Opposition Leader Pierre Polievre who accused the CRTC of imposing a tax that would ultimately be paid by Canadian consumers. He demanded that the Carney government overrule the CRTC, something the government says it does not have the authority to do. If pushed, however, it could of course amend or withdraw the legislation, the Online Streaming Act, that is behind the CRTC actions.

Others were also quick to criticize, including University of Ottawa professor Michael Geist who published the day after the CRTC announcement, pointing out that the Online Streaming Act is already in the crosshairs of the US in the lead up to negotiations to renew the CUSMA/USMCA. Indeed, US Ambassador Pete Hoekstra, who seems to be unable to fathom why Canadians might be upset at a US Administration that has routinely broken the rules it agreed to under Trump 1.0 with the renewal of NAFTA (not to mention the 51st state nonsense), immediately called the CRTC decision “making a bad situation worse”. Geist followed up with another post titled “From Levy to Liability: Why Canada Risks Facing Hundreds of Millions in Retaliatory Tariffs Due to the CRTC’s Online Streaming Act Ruling”.

Copyright Ownership Issues

Now, I am not here to try to justify the CRTC’s Canadian program expenditure announcement, which is a complicated beast. While I believe a legitimate argument can be made that participants in the Canadian broadcast space should be expected to support Canadian content and Canadian production to a certain degree, I have a problem with the requirement that prevents the funders from owning and exploiting, as they see fit, the product they have invested in. I know this view is not shared by many in the Canadian content industry. Part of the CRTC decision involves an obligation to spend 30 percent of their contribution on what is described as “enhanced partnerships”. This is CRTC-speak for production partnerships where Canadians hold the majority of the copyright in the programming.

This would seem to reverse the flexibility in defining Canadian Content (CanCon) that was introduced by the CRTC late last year. As I explained in a blog post last November, the revised CanCon definition outlined by the CRTC for broadcasting and streaming purposes allowed for up to 80% of the copyright in a production to be held by a foreign enterprise, subject to some other CanCon requirements such as the director and screenwriter both being Canadian. This was designed to encourage co-productions, and was a slight relaxation of the hardline rules that required foreign streamers to contribute to Canadian productions but then denied them the right to own and exploit the copyright (including distribution rights) in those productions. Now whatever flexibility that was introduced has been rolled back; at least one streamer production contribution dollar in three must be invested in a production where the rights are held by someone other than the funder, with that person having to be a Canadian. This is despite the fact that the production might have qualified as Canadian (story, director, location, music etc) in every other way. The purpose of the levy is clearly not to promote Canadian content but Canadian production.

Do the CRTC Measures Violate CUSMA Obligations?

While I, like Michael Geist and others, have concerns that the CRTC decision has flaws, and may be indeed become an additional irritant to be dealt with during the forthcoming CUSMA negotiations, my main quibble is with the argument that Canada will face millions in retaliatory tariffs under the CUSMA framework because of the CRTC mandated contributions. Prof. Geist and others are recycling the argument put forward by a US industry group, the Computer & Communications Industry Association (CCIA), claiming that the CRTC decision violates the terms of CUSMA, specifically, Article 14.10 that refers to investment performance requirements;

“No Party shall, in connection with the establishment, acquisition, expansion, management, conduct, operation, or sale or other disposition of an investment of an investor of a Party… impose or enforce any requirement, or enforce any commitment or undertaking…to achieve a given level or percentage of domestic content”

CCIA argues, echoed by Michael Geist, that given this situation, Canada will therefore be required to defend its action by means of the Cultural Exception clause (Article 32.6). This is an “escape clause” that says;

This Agreement does not apply to a measure adopted or maintained by Canada with respect to a cultural industry.

Broadcasting meets the definition of a cultural industry. However, if the CCIA is right and Canada falls back on the Cultural Exception, this is itself a problem because in that case the US would be entitled to retaliate (take a measure of equivalent commercial effect) in any sector. In other words, the automotive, aluminum, steel, mushroom or maple syrup industries, or any other, could be lumbered with retaliatory US tariffs as a result of measures applied to US streamers that are discriminatory or otherwise non-compliant with CUSMA.

If the measures are non-compliant or discriminatory, that is. If they are not, Article 32.6, the Cultural Exception, does not apply and therefore there would be no grounds for the US to retaliate. (Not that the need to respect the terms of CUSMA would stop them, as I discuss below). In the past, I have argued that the Cultural Exception is not applicable. This is because Article 14.10 refers to investment (Chapter 14) whereas streaming services fall under a different chapter of CUSMA, cross-border trade in services (Chapter 15). National treatment (non-discrimination) applies to cross-border services, and the streamers are in fact treated more favourably than their equivalent Canadian streaming counterparts. You can read all about it here.

But what if I am wrong? My interpretation has not been tested in “trade court”, which in the case of CUSMA (Chapter 31) allows for a state-to-state dispute settlement process through establishment of arbitration panels. The US could call for such a panel but could also simply assert that Canadian actions were in contravention of the Agreement and that Article 32.6, the Cultural Exemption, applied. This would allow for the application of retaliatory tariffs. However, under the terms of the Agreement, Canada could challenge the US assertion, and so, in effect there could ultimately be a panel review to determine the outcome.

US Trade Actions to Date

That is how the Agreement is supposed to work, but that process is now effectively irrelevant given that the US has violated both its terms and spirit several times, basically arrogating to itself the right to do anything it pleases. The so-called “fentanyl” tariffs were the first such example, where the US imposed a 25 percent tariff on Canadian goods on the specious pretext that Canada was responsible for “the extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl” which “constitutes a national emergency under the International Emergency Economic Powers Act (IEEPA)”, according to an announcement issued by the US Embassy in Canada.  Quite apart from the fact the US is responsible for enforcing its own border security, not Canada or Mexico, Canada was the source of less than 1 percent (between 0.1 and 0.2 percent in fact) of illegal fentanyl flowing to the US. More fentanyl probably flowed the other way. The IEEPA tariffs were subsequently struck down by US courts as being an unjustified usurpation of the taxing power of Congress.

Not daunted, the Trump Administration has turned to other legislation, such as Section 232 of the US Trade Act of 1974, to impose tariffs on Canadian steel, aluminum, cars, furniture such as kitchen cabinets, and lumber on the basis that such imports threaten US national security. In addition, Canadian goods that do not have a CUSMA certificate of origin are subject to tariffs under Section 122 of the US Trade Act that deals with balance of payments issues. Then there is the Canadian financed Gordie Howe Bridge that the Trump Administration seems to want to keep in limbo because the owner of the competing bridge is a large Trump donor. I could go on, but the point is, the terms of the USMCA/CUSMA seem to exercise very limited restraint on the Trump Administration. Therefore, why would the Administration care whether Canadian measures imposing a levy on US streamers to fund Canadian productions fall under the Cultural Exemption or not? They don’t. If they want to impose a tariff, they’ll find a pretext.

Should Canada Rescind the CRTC Ruling to Facilitate CUSMA Renewal?

From a trade negotiating perspective, for Canada to roll back the CRTC decision now would be a tactical mistake. Look what happened to the planned implementation of a Digital Services Tax. Long planned, with an implementation date well publicized a couple of years in advance, and with the revenue already booked, the Carney government got cold feet and at the last minute cancelled the tax. This was supposedly to get CUSMA negotiations restarted. As I described it at the time, it was a “humiliating climbdown” to mark Canada Day, 2025. Yes, negotiations resumed for a few weeks until the US pulled the plug once again to signal its displeasure with Ontario Premier Doug Ford’s TV ads during the Super Bowl that enlisted Ronald Reagan to fight tariffs. The DST climbdown achieved nothing. That lesson appears to have been learned. The Canadian Government has made it clear it is not prepared to pay an “entry fee” to begin CUSMA discussions, and will not make concessions simply to get to the table. So, from a trade policy perspective, why should it pull the Online Streaming Act, or intervene with the CRTC?

This is not to say the CRTC got this decision 100 percent right. It is also not to say that, hypothetically, elements of the Online Streaming Act might not be on the chopping block as part of an eventual CUSMA 2.0 deal. That is assuming the US can be trusted to implement what it agrees to. As the smaller partner, Canada has always relied on the US sense of justice, respect for the rule of law and a willingness to surrender some sovereignty for greater overall economic and political security as reasons to expect that the US will honour what it agrees to. Under the Trump Administration, that faith has been shaken. The US streaming industry has every right to invoke the supposed protection of CUSMA and to seek protection under the Agreement. The problem is that the current US Administration has so brutally abused the CUSMA framework as to make it scarcely credible. The streamers are being sideswiped by the aberrations of US trade policy.

But back to the topic at hand. Will the CRTC decision on streaming lead to the imposition of hundreds of millions of dollars in retaliation by the US? Probably not, although such an outcome is not impossible. If it happens, it won’t be because of the Cultural Exception clause in CUSMA, but because the US can wield a big stick and will do so if it suits the mood in the White House at any given time. Canada, however, has some cards to play, to use a Trumpian analogy, and those cards (energy security, critical minerals, lower-cost inputs to US industry such as aluminum, specialty steel, and car parts) are important to the US. The Carney government is playing a waiting game on CUSMA negotiations and renewal. The decision on US streamers is just one more element in this high-stakes poker game. When you’re playing with a master bluffer, you don’t fold your hand before the game is over.

© Hugh Stephens, 2026.