The Collapse of Canada-US Trade Talks: Respite for Now

A graphic representation combining the flags of the United States and Canada, featuring the American flag with stars and stripes on the left and a red maple leaf on a white background on the right.

Image: Wikimedia Commons (Flanker)

As the Canada-US trade talks went down to the wire last week, working against the artificial deadline set by Donald Trump (with a three-day extension in order to finalize the “deal” he announced on social media, a deal that was about as final as the numerous deals he has announced with Iran over the Strait of Hormuz), I like many Canadians had a foreboding sense of trepidation. Was I worried that the two sides would not come to agreement? No, I was concerned that they would, and that the price of reaching that deal would involve unacceptable concessions by Canada.

Not only that, but the deal would also be about as solid as ice cream in a hot sun. The US would require Canada to change or repeal legislation while it would simply sign an executive agreement that could be rescinded at any time. And that is precisely what would happen next. Mark Carney referred to US commitments being written “in pencil”. One of the supposed US concessions as a result of this deal was agreeing to begin formal negotiations on USMCA/CUSMA renewal. Therefore, Canada’s last and best offer in the interim trade negotiation–that were a necessary attempt to avoid additional 50 percent retaliatory tariffs on a range of Canadian goods as well as to obtain a roll back of sectoral tariffs imposed by the US in violation of CUSMA on steel, aluminum, autos, and wood and wood products–would have become the starting point for US demands for “more” when the formal negotiations got underway. Having seen how little the US was prepared to concede in terms of existing measures, but more precisely how much they wanted for the minimal concessions offered, was surely a wake-up call for the Carney government.

Carney’s last-minute decision to walk away was clearly the right political move from a Canadian perspective, especially with several by-elections coming up in a matter of weeks. Opposition Leader Pierre Polievre’s prepared notes accusing Carney of selling out were quickly chucked aside while Poilievre scrambled to climb aboard the Team Canada bandwagon. Carney’s “elbows up” mantra that got him unexpectedly elected last year was starting to wear a bit thin after unilateral concessions to the US like the eleventh-hour abandonment of the long-planned Digital Sales Tax on large online platforms, a concession that achieved nothing. That said, it is easy to talk tough, but not so easy to accept the responsibility for the economic punishment that may result. Any responsible leader owes it to their constituents and businesses to try to resolve trade issues without resorting to confrontation and retaliation. Canada gave it a good shot this time around, but in the end the price to be paid was just too high. In part, we have Commerce Secretary Howard Lutnick to thank for that.

Lutnick, one of Trump’s billionaire appointments, along with presidential advisor Peter Navarro, is a firm believer in tariffs and in using tariffs to change established trading patterns. Inconvenient trade agreements that constrain this behaviour (such as the USMCA/CUSMA) are to be bypassed or ignored. Lutnick has a particular bee in his bonnet about the Canadian automotive industry, which he essentially wants to drive out of business. There is no question that auto assembly in Canada is dependent on imports of parts from the US and the export of assembled vehicles to US consumers. But the Canadian industry was not established to export to the US; it evolved that way on the basis of a bargain. It has been around for well over a century and was originally established to serve the Canadian market, protected by high tariffs from US imports. Over the years, US companies purchased the Canadian manufacturers, and the industry became more integrated, culminating in the 1965 Auto Pact. That agreement was rolled into the first Canada-US Free Trade Agreement, which morphed into NAFTA and eventually CUSMA. The essence of the deal was that for every vehicle imported duty free into Canada, the automakers had to build one vehicle in Canada. That vehicle might be sold into the Canadian market but could also be sent south to the US, duty free. It was an arrangement that worked well for both sides and has strengthened the North American industry, which needs all the help it can get in the face of Asian and European imports. But Lutnick and Trump don’t understand and don’t like this arrangement. “We don’t want cars made in Canada”, Trump is reported to have said. As the interim Section 338 (referring to Section 338 of the Tariff Act of 1930, obscure legislation resorted to by USTR to impose retaliatory tariffs on Canada) negotiations came down to the wire last week with discussions centering on a reduction in the 25 percent auto tariffs imposed by the Trump administration on Canadian assembled vehicles (these are already a violation of CUSMA terms), Lutnick and Navarro reportedly intervened to minimize the value to Canada of the tariff reduction by excluding medium and heavy trucks from the “concessions”. This was a move aimed specifically at hampering truck production in Canada, one of the few sectors where North American vehicles dominate in both the US and Canadian markets. Lutnick’s carve-out was enough to help tip the scales, forcing the Canadian side to walk away. Thank you, Howard. You inadvertently did Canada a service.

Had Lutnick not introduced this deal-breaker, Canada might have swallowed the poison. Ontario Premier Doug Ford was a key factor too. If the deal was not sufficiently good for the Canadian auto industry, he would have refused to put US booze back on the shelves of the LCBO, (the Liquor Control Board of Ontario), reportedly the single largest global importer of liquor and wine (although this is contested—Costco might be bigger!). Mind you, there were a couple of other deal-breakers on the table as well, which shows either how greedy the US negotiators were, or how little they understand Canadian realities. Surely anyone who haa studied a modicum of Canadian history would know that attacking bilingual labelling in Quebec and support for French language music through discoverability and other requirements is a total non-starter for any federal government. Quebec also has the SAQ (Société des alcools du Québec) card to play. The final deal-breaker cited by Carney in his news conference the day after the deal collapsed was an attempt by the US to constrain Canada’s ability to freely negotiate trade deals with third parties. It is worth noting that Canada already agreed to this with respect to China when it signed the CUSMA deal in 2018. (Article 32.10), but Carney stressed that Canadian sovereignty is not on the table.

In his explanation of the decision to walk away, Carney also cited the need to protect Canadian culture, although he was non-specific. There is no question that cultural groups and content industries in Canada, such as the press and Canadian content producers, were becoming increasing anxious they might be thrown under the bus. There were reports the US was targeting both the Online Streaming Act (OSA) and the Online News Act (ONA). The enactment of the ONA (aka Bill C-18) in 2023 resulted in Meta blocking the posting of (most) Canadian news content to Facebook and Instagram but led to Google agreeing to contribute $100 million annually to support Canadian journalism. Paul Deegan, CEO of News Media Canada warned earlier last week that if the ONA was given up as a bargaining chip in the trade negotiations, the impact on journalism in Canada would be “catastrophic”.

The threats to the future of the ONA in Canada are ironic given that Australia, which was the inspiration for Canada’s legislation, has just passed new legislation (the News Bargaining Incentive) designed to address the dodge employed by Meta in Canada. When Australia introduced its initial News Media Bargaining Code, Meta reluctantly went along with it and struck a number of content deals with Australian media. It subsequently announced it would not renew them as they expire. In Canada, Meta dug in and delisted postings from Canadian media (although there have been some controversial exceptions) in order to avoid being subject to the legislation that required them to reach deals with Canadian media to license content. To address this, the new Australian legislation imposes a 2.5 percent tax on the advertising revenues of the targeted platforms (Meta, Google, TikTok and LinkedIn) unless they strike agreements with news media providers. The tax would be paid into a fund accessible to local news outlets. The tax amount is higher than payments under the voluntary agreements the platforms are expected to reach, providing an additional incentive for them to reach or renew content licensing agreements. It would be hard to see Australia successfully pursue the goal of requiring the big platforms to contribute to production of the news content they use while Canada, which consciously followed the Australian example, retreats from this objective.

As for the Online Streaming Act, recall that in recent weeks the Carney government notified the CRTC that the foreign streamer contributions to the production of Canadian media and content mandated by the Commission will need to be revisited. Was the OSA part of the recently suspended Section 338 negotiations? No doubt about it. US Trade Representative Jamieson Greer in a midweek tweet congratulating Trump on the “deal” that was seemingly about to be finalized, said it would include “comprehensive market access for all American goods, economic security commitments, digital trade alignment, and many important provisions that will continue to protect our market and American workers…”

What “digital trade alignment” might include was not specified but there was speculation it could encompass a commitment to never introduce a DST, reversal of the Online News Act, data governance limits and limitation or elimination of streaming payments. Now, with the collapse of the talks, none of that will happen—for now. However, the 50% Sec 338 tariffs are now in effect and Americans will be paying much more for Canadian honey, salt and toilet paper, among other things, assuming those items will still be on US shelves.

Canada’s decision to terminate the trade talks last Friday really settled nothing, other than to confirm that the US goal is to bring the country fully into its orbit as a satellite state. Carney and Canadians are determined this will not happen and have cards to play. Those cards relate to the impact of Trump’s decisions on the US economy and US consumers, and the potential impact of these decisions on the midterm elections. Canada would do best to take its time and continue to try to find allies within the US. Whether the announced intention of retaliating against Trump’s Section 338 tariffs on a “dollar for dollar” basis is the right approach is another question, but the intent will be to inflict targeted pain on selected US export sectors in order to build pressure on the Administration. The provincial liquor bans were designed with this in mind and have been remarkably effective.

Eventually Canada and the US will need to get to the USMCA/CUSMA negotiating table. CUSMA is still in force notwithstanding the sectoral US tariffs that violate its provisions on specious “national security” grounds. It is a Congressionally approved treaty and unless renounced, which the Trump administration clearly does not want to do, it remains in force unless renegotiated. When renegotiated, and ratified by Congress, it will provide stronger guarantees of predictability than the back-of-the-envelope trade deals that Trump and USTR have been forcing on trading partners. However, if and when those negotiations take place, the issues that led to the collapse of the Section 338 talks will still be on the table.

Canada’s cultural and content industries don’t have the political clout of the dairy industry, which for decades has managed to put its self-interest before that of the rest of the economy and Canadian consumers, or the auto industry, but maintaining economically viable Canadian voices in media, broadcasting, film and literature is part of preserving sovereignty. How that is best done is the topic of ongoing discussion and debate. For now, the OSA, the ONA and Canada’s other digital legislation remains intact. The sector may have dodged a bullet for now but needs to remain alert. It’s never over until its over.

© Hugh Stephens, 2026. All Rights Reserved.

Count Binface or Lord Buckethead? A Comedic Copyright Controversy

A person sitting outdoors with a blue plastic container placed over their head, partially obscuring their face.

Lord Pailface

Copyright is a deadly serious business, as the AI company Anthropic found out when it was sued for copyright infringement and agreed to pay $1.5 billion to implicated authors, or as the online platform Afterlife discovered when it was ordered by a Canadian court to pay $20 million to plaintiffs for publishing unauthorized obituaries[i], but just like anything else there are times when copyright veers from the sublime to the ridiculous. One of the most prominent examples of this phenomenon was the so-called “Monkey Selfie” case, that I wrote about here. The recent byelection in Britain in which Reform UK leader Nigel Farage stood for re-election in his riding of Clacton, having resigned to protest a Parliamentary investigation into his acceptance of undeclared financial gifts, has highlighted another. Because all major political parties in Britain boycotted the election, calling Farage’s resignation and subsequent re-election bid a political stunt, the runner up was Count Binface, actually British comedian Jon Harvey.  Remarkably Binface, representing the registered Count Binface Party, took almost 27% of the votes, over 9,000, although Farage won handily.

Harvey became Binface, a costume where he wears a garbage can (aka rubbish bin) on his head, following his original persona as Lord Buckethead, the costume he wore when he challenged then British Prime Minister Theresa May in the 2017 general election. May won with 31,000 votes. Buckethead got 249. But he did get his photo taken with May and the other candidates, a photo that went viral. Because of the notoriety, the God of Copyright Infringement came knocking. Lord Buckethead was a character created by Director and writer Todd Durham for his 1984 parody of Star Wars, a film known as Gremloids (in the UK) or Hyperspace (in the US). The film was obscure to say the least, earning most of its revenue through VHS sales.  Buckethead enjoyed a brief period of fame in the 1980s when some individuals dressed up in the character to oppose Margaret Thatcher and John Major, but it was Harvey’s encounter with May that shot the character to fame some 30 years later. That’s when Harvey’s problems began. According to the Guardian, Durham began to show a proprietorial interest in the almost-forgotten character he had created decades earlier. He appears to have wanted to license the character if people wanted to use Buckethead for political purposes. Harvey had no appetite for a legal fight, and so Buckethead has morphed into Binface.

From a copyright perspective, the case raises a couple of interesting issues. In British law, there is a fair dealing exception for cases of parody, caricature and pastiche. In the US, while parody is not codified in US law, it is an accepted fair use defence provided other factors in the four step fair use evaluation do not rule it out. In particular, the use must not negatively impact the commercial prospects of the original work in the marketplace. Clearly Gremloids/Hyperspace had no impact on the commercial viability of Star Wars. George Lucas, the creator of the Star Wars franchise and its characters, did not bother to sue Graham although he is notoriously litigious with respect to his IP rights. One of the most famous examples is the copyright infringement case he brought in Britain against prop designer Andrew Ainsworth, who designed the original Darth Vader helmet and sold fifty of them to Lucas in 1976. Years later, after Star Wars had become globally famous, Ainsworth dug out his old moulds and started selling helmet replicas from his studio in Shepperton. Lucas sued for copyright infringement in the US, and won, but Ainsworth had no assets in America, so Lucas sued again in the UK. The case lasted seven years but in 2011, Ainsworth prevailed. The UK Supreme Court upheld an appeal court ruling that the helmets were not sculptures protected by copyright, but utilitarian industrial designs, like a toaster. The protection period for industrial designs in Britain is only 15 years, and by the time Ainsworth had started reproducing the helmets in the early 2000s, protection had expired. Had they been categorized as sculptures, they would have been protected for Lucas’s lifetime plus a period of 70 years. The UK court agreed, however, that Ainsworth’s helmets constituted copyright infringement in the US and enjoined him from not selling them into the US market.

This case was also made famous by the tactics of the barristers for the opposing sides. Lucas’ lawyer displayed the helmet as a work of art, bringing the helmet into court in a crystal case set on a pedestal, as befitting a sculpture.  Ainsworth’s lawyers brought in several helmets in a cardboard box and invited the justices to try them on for size, thus stressing their utilitarian rather than artistic nature. Courtroom theatrics count.

Coming back to Lord Buckethead, could Jon Harvey have claimed a parody defence? Not really. In adopting the character of Lord Buckethead, he was not parodying the original film, as Gremloids had done with regard to Star Wars. He was simply using what was arguably a copyright-protected character in another way. If you use Mickey to promote your candidacy for the Rathaus, don’t think that the Walt Disney Company won’t assert its trademark and copyright to prevent misuse of the mouse with the squeaky voice. This is why I have been very careful not to use the character of Count Binface to attract your attention to this blog post. While it is unlikely that Harvey would pursue legal action if I used an image of Binface without authorization, as a proponent of the value of copyright, I should walk the talk and not infringe. I could seek permission, but creating my own character is a faster solution. Lord Pailface is a good substitute. Does the modicum of skill and judgment I used to create it mean it is copyright protected? I hope we will never have to find out.

© Hugh Stephens, 2026.


[i] Afterlife went out of business and never paid. It was however “reincarnated” as Echovita, which scrapes obits from the website of funeral homes and other public sites and rewrites them using only the basic elements of the deceased’s life, facts which are not protected by copyright, thus avoiding being charged with copyright infringement.

Can Canadian Film or Television Have a Global Hit?

Pursuing the Unlikely Dream

By Peter S. Grant

A smiling elderly man with glasses and a beard, wearing a gray shirt.

Peter Grant

Occasionally I am pleased to host a guest post on this blog, which is the case with today’s essay by Peter S. Grant. It is timely given the current policy debate over the role of foreign platforms in contributing to the production of Canadian content. Peter Grant will be well known to many readers of this blog. After a more than 50 year career as a communications lawyer with the Toronto firm of McCarthy Tétrault, Peter continues to be active in the field of Canadian communications. He was one of six experts appointed to the Broadcasting and Telecommunications Review Panel in 2018, which reported in 2020, and is also the founder of the annual Digital Media at the Crossroads (DM@X) conference in Toronto. Peter is the author of several books including his autobiography “Changing Channels: Confessions of a Canadian Communications Lawyer.


In this essay, I explore the often sought but almost never achieved dream of all Canadian film and television producers. It is also a dream of many observers of the film and television scene in Canada.

Can Canada produce a global hit?

We are all used to seeing Hollywood films or TV series that turn out to be successful around the world. But while Hollywood may be the principal source of such hits, we also see occasional global hits from other countries. For example, Australia can point to Crocodile Dundee which was decidedly Australian and was a huge global hit in 1983. France can point to Amélie, released in 2001, which was one of the few French films to break out in the international market. And England can point to a streamof more recent hits that look very British – from Downton Abbey to Harry Potter to Notting Hill.

So what are the chances for such a global hit to come from Canada?

In discussing this question, we have to make one thing clear. We are not talking about global hits that may have been made in Canada but would not be seen as Canadian. For example, the Oscar winning film Chicago was entirely made in Toronto, but no one would think it was Canadian. Around the world, that movie would be seen quite properly as a Hollywood production. So what would qualify as a Canadian global hit? For the purpose of this analysis, the production would need to meet three conditions:

1. It would be shot in Canada by a Canadian production company and would feature Canadian creative talent, allowing it to qualify as “Canadian content” under the CRTC rules.

2. For the audience outside Canada, it would “look” Canadian and be recognizably Canadian whether through theme, subject matter or other elements.

3. It would be a huge ratings success outside Canada as well as in Canada itself.

I should note that whether or not a Canadian production achieves international success is not an appropriate basis for Canadian regulatory or financial support. After all, the prime object of our domestic policies should be to make programs that appeal to Canadians, not the world. But if the world also likes those programs, and if those programs can garner revenue outside Canada, so much the better.

So, have we ever had a Canadian production that both looked Canadian and was a global hit? And if not, why not?

Let’s start by looking at each of the three conditions more closely.

Canadian Talent

In the global hit category, Canadian creators have often played a major role. Countless Canadian actors have found success in Hollywood, as have Canadian directors. However, the fact that global hits like Titanic and Avatar were directed by James Cameron, born in Kapuskasing, Ontario, does not make them Canadian.

Hollywood has a huge Canadian talent diaspora but they dance to Hollywood’s direction. Nor do their productions look Canadian. As with the movie Chicago, some of these productions may even be shot in Canada. But the fact that Canadian director Norman Jewison shot most of Moonstruck in Toronto does not make it Canadian. In fact, we have a long list of foreign location or “service productions” that are shot in Canada to take advantage of provincial tax credits and the lower Canadian dollar. Some of these productions may use Canadian actors or a Canadian director. Examples include many of the Hallmark romantic productions. But none of the Hallmark productions qualify as Canadian under CRTC rules. In fact, they brilliantly masquerade as being shot in the US or in mythical communities that could be anywhere.

So we have a plethora of Canadian talent. But Canadian talent and an indistinguishable Canadian location is not enough. What about a Canadian theme?

Does the Production Look Canadian?

This is a difficult element of the three-part test to pin down. Broadcasters in Canada have scheduling and expenditure requirements to support “Canadian content” as defined by the CRTC. But the Canadian content rules set by the Commission do not require that the subject-matter be Canadian or that the film or program “look” Canadian.

There is in fact a lively debate about this question. Richard Stursberg, in his recent book The Tangled Garden, has argued that Canada should adopt the British rules, which only hand out tax credits if the program is seen as British. Points are given if the characters are identifiably British, if the program is clearly set in Britain, and whether it is based on British subject matter.

One could imagine having similar rules in Canada. But others argue that adopting such a system would unfairly limit the freedom of expression of Canadian writers.

Occasionally even Hollywood will make a movie with a recognizable Canadian theme. In 1983, Disney made Never Cry Wolf, an adventure film set in the Canadian sub-arctic based on Farley Mowat’s 1963 book of the same name. Had that film been made by a Canadian production company and had a Canadian director and Canadian actors, we would celebrate it as a bona fide Canadian hit. But none of those elements were Canadian. Accordingly, the production film sits as just another nature film in the Disney library.

Another recognizable Canadian story is Anne of Green Gables. Following the global success of the 1903 book by Lucy Maud Montgomery, the US studio RKO made a global hit out of it in 1934. Since then, numerous TV productions made in Canada by Canadian companies have capitalized on its early success. We have gone back to the Anne well again and again. The British equivalent would be the lively industry in the UK churning out multiple versions of Pride and Prejudice.

But Anne apart, it has been hard for Canadian producers to come up with a Canadian theme that might travel abroad. Robert Lantos tried with Black Robe in 1991, based in Bryan Moore’s novel about a Jesuit missionary among the Hurons in the 17th century. It was decidedly a Canadian-based story and did well for a Canadian film but it grossed less than $10M worldwide. Lantos tried again in 2002 with Men with Brooms, a comedy about curling starring Paul Gross and Leslie Neilsen. But it failed even to get a US film distributor.

A number of Canadian television series that “look” Canadian have had significant foreign sales. Examples include the Degrassi series, which was a success on the US teen channel TeenNick (previously The N), and Murdoch Mysteries, which has been sold around the world. Both series are recognizably Canadian. But neither series can be described as a global hit. Nor can the Canadian television series Corner Gas, which was a hit in Canada but failed miserably outside Canada, despite being picked up by  WGN Chicago, the US superstation.

One unmistakably Canadian movie that had international acclaim was Atanarjuat: The Fast Runner, a 2001 film directed by Inuit filmmaker Zacharias Kunuk. It was the first feature film ever to be written, directed and acted entirely in the Inuktitut language. In 2015, a poll of filmmakers and critics in the Toronto International Film Festival named it the greatest Canadian film of all time. But outside Canada it only played in arthouse cinemas and its worldwide revenue was only $5.1 million. So regrettably it doesn’t qualify as a global hit.

More often Canadian producers have tried to underplay any Canadian connection in their programs, in order to enhance the chance of a sale to a US network. They are assisted by the fact that Canadian cities look a lot like cities south of the border.

And of course, Canadian writers have frequently decided to tell stories that are not based in Canada at all. Examples include Michael Ondaatje’s The English Patient, and Margaret Atwood’s The Handmaid’s Tale. Both novels had global success in their audiovisual form. But neither production would have been seen as Canadian, even if produced by a Canadian company. For a global hit to be seen as Canadian by world audiences, the story needs to have a Canadian focus.

Is the Producer Canadian?

To qualify as Canadian under CRTC rules, the production must be produced by a Canadian owned company. Foreign companies argue that we are being too strict in this regard. If the production looks Canadian and is written and performed by Canadians, why should we care if it was financed and owned by a foreign company?

In the United Kingdom, ownership does not appear to matter. The Harry Potter movies were all financed and owned by Warner Brothers. But the productions all qualified for UK tax credits and no one would think of them as other than British films. Nor did the UK government express concern when a number of successful UK independent production companies were sold to US companies. So Working Title, which produced hits like Notting Hill, Bridget Jones’s Diary and Bean, is now owned by NBCUniversal.

France takes a different view. To be a French film, a film must be produced and financed by a French producer. For example, the French hit Amélie, which had a French director, writer and star, and was produced by a French company, received significant support from the French box office levy. But when three years later, exactly the same creative team came up with A Very Long Engagement, they were denied any such support. Why? Because this time, the film was financed by Warner Brothers.

Here in Canada, we follow the French approach. The producer must be a Canadian company for its productions to qualify as Canadian content under the CRTC rules. And although tax credits are available for foreign productions shot in Canada, the tax credits are higher if the producer is owned by Canadians. Canadian content policy has favoured independent Canadian-controlled producers in the interest of diversity and in the hope that the locus of creative decisions will stay in Canada. So when Entertainment One, Canada’s largest independent producer/distributor, was sold to Hasbro last year, it was careful to say that eOne’s Canadian film and TV operations would “remain as a separate Canadian controlled unit within the combined business.”

Is There Hope?

So we come back to my question: Can Canada produce a global hit, meeting the three criteria I have outlined?

While the skill set to produce a world-class production is here, the real problem is to find a Canadian story that will resonate with global audiences. Yes, Anne of Green Gables met that test. But Canada’s track record since Lucy Maud Montgomery came up with that story is not very encouraging.

The closest we have come is the recent international success of Schitt’s Creek, the Canadian TV series. That TV series, originally launched on the CBC, received significant ratings in the United States when carried by POP TV and Netflix. It also recently garnered seven Emmys and has been lauded as a Canadian hit by TV critics in a number of countries. But some have argued that viewers outside Canada would not see the series as “looking” Canadian even though the street signs are in kilometers and the post office boxes say Canada Post.

So what kind of story would be attractive to people outside of Canada but be unmistakably Canadian? Would it be a spy story with Ryan Gosling playing the part of a Canadian Mountie? Would it be a Canadian romcom starring Rachel McAdams and set in Niagara Falls? Would it be a comedy starring Jim Carrey seeking to save the world as Captain Canada? Who is to say?

At least, Canadian producers can take heart from the live theatre. Before the Covid-19 crisis closed the theatres, the smash hit on Broadway and in the West End in London was an unlikely musical called Come From Away. Here was a quintessential Canadian story that found international success. So there still may be hope for a Canadian film or television to be a hit in the global market.

But who knows?

(c) Peter S. Grant, 2026

US Streamers and Canadian Content: What is the Role of Copyright? (A Clarification)

A stylized film clapperboard with a Canadian flag design and a letter 'C' in the center.

Image: Shutterstock (adapted)

Last week I commented on the news that the Carney government intends to eliminate even the 5 percent base contribution of revenues required of US streaming services to fund Canadian production, rolling back a requirement imposed in 2024 by the CRTC as part of the first phase of implementing the Online Streaming Act. The story was broken by the Wire Report, which learned of this decision through a letter filed with the Federal Court by the Attorney-General for Canada (AGC) on behalf of the government. The Federal Court is currently hearing an appeal launched by the streamers against the CRTC’s base contribution edict.

The operative paragraph of the AGC letters reads as follows;

We are instructed to inform the Court that the Government’s intention is to eliminate the base contribution requirement on streaming services and to provide government funding to replace these contributions. We are further informed that the Government expects the direction…to be published for consultation…in the coming weeks.”

In other words, a new policy direction is coming, so stay tuned. The Wire Report stated that the office of the Minister responsible, Hon. Marc Miller, confirmed the streamers will still be required to “reinvest” an unspecified portion of revenues under new policy directives under the Online Streaming Act, which remains in force. How that will be done is far from clear.

I then offered my opinion that if the Carney government wants to replace the current system with a policy alternative which is more likely to attract the support of the streamers (and perhaps lesson the pressure coming from the US Government generated by the streamer’s lobby), it should consider waiving or modifying the regulation that prevents the streamers from obtaining the full rights to the Canadian content in which they are required to invest. Specifically, I said;

Canadian policy makers and the Canadian industry have failed to grasp that you cannot, or should not, require foreign players to fund domestic producers to create Canadian content (CanCon) while simultaneously denying those same foreign entities the right to own or control the marketing and distribution of these productions.

I thought I was clear in what I was saying, but in retrospect maybe I was not as clear as I could have been.

After I’d posted the blog, a knowledgeable observer of the Canadian media scene wrote to me saying I was mistaken because I had suggested that the current Canadian policy–to the extent that it requires Canadian producers to own the copyright in their production– is inconsistent with requiring foreign players to fund domestic producers to create Canadian content. My correspondent noted that any Canadian content requirement imposed on foreign platforms simply requires them to contribute a percentage of their annual Canadian broadcasting revenues to “Canadian programming expenditures” or CPE. CPE could be “direct”, i.e. direct investment in Canadian programs (commissioning and production of content), acquisitions of Canadian programming, or expenses relating to dubbing in Canada using Canadian human resources, or “indirect’, namely contributions to production funds. They pointed out that a foreign platform can meet its CPE requirements by simply buying specific rights to a Canadian program, e.g, to show the program on its service in Canada or in other countries.  CPE doesn’t require the foreign platform to acquire the copyright in the program.

If my correspondent misinterpreted what I was saying, then that is on me, so let me clarify.

Firstly, I am in full agreement with what my critic said. The regulations do not require the foreign platform to acquire the copyright in the program. (I wasn’t suggesting that they did, but it seems I wasn’t sufficiently clear on this point). Indeed, the current regulations prevent it. There are two ways the foreign platform can meet its CPE requirements. The first is by simply paying into a fund (termed an “indirect CPE contribution”) over which it has no control and no access. That is basically how the initial 5% base contribution (now repudiated) was treated by the CRTC. No less than 11 different Canadian funds were eligible to draw funding from the base contribution pot of money. Some of the production was in fields, such as local news, that the streamers do not even produce. This was one of the grounds for the appeal to the Federal Court.

The other way in which the foreign platform can meet its CPE obligations under the current regulations is by investing in, commissioning, or acquiring the rights for Canadian programming, as noted by my correspondent. Canadian programming is defined by an arcane set of criteria that I have discussed elsewhere. It requires a certain number of Canadian inputs, from key creative positions and performers all the way down to make-up artists and hairdressers. But there is one key kicker. The IP rights, the ©, must be held by a Canadian for a set number of years, or else the program does not qualify as Canadian with respect to CPE obligations. In other words, the foreign platforms that are commissioning, investing in and funding the production in order to meet their direct CPE targets cannot own the rights. If they do retain the rights, the funds spent on creating content do not count against CPE requirements. Yes, foreign platforms can license a production to obtain distribution rights, but they must negotiate with a Canadian rightsholder to so–even if they have funded the program. Under normal industry practices, the platform would be free to hold the bundle of rights conferred by copyright if they wished to do so. This is often the case as it leads to a better return on investment.  

To be clear, I was not saying that the copyright restriction prevents foreign streamers from investing in Canadian production. Indeed, they are obliged to do so regardless of whether or not they can control the rights (which they cannot). Rather, the copyright restriction discourages the streamers from making any effort to go beyond the minimum legal requirement to fund Canadian production because they have no incentive to do so. Why invest in a production in which you can’t own the rights—unless you have no choice. The streaming industry works on the basis of different acquisition models, but for commissioned production or production where the bulk of the production cost is underwritten, the normal practice is to acquire all the rights through control of the copyright in the work. This allows for international distribution as well as control of subsequent release in different formats. If Canada is now going to replace the mandated CPE contributions with something else, it would make sense to find ways to encourage the streamers to “re-invest” in Canada. A positive step forward, in my judgement, would be to loosen the copyright chokehold.

I have no way of knowing for certain whether this would result in increased expenditure on Canadian production by the streamers. Many factors go into production decisions, including regulatory requirements. But a regulatory requirement is a stick. The current CPE requirement assumes that the only reason a foreign platform would invest in a certified Canadian production is because it is required to. But carrots can also be used. A well used carrot is a production subsidy. Canadian producers would no doubt scream bloody murder if Canadian taxpayer funds were used to subsidize US productions of Canadian stories. Yet, taxpayer funded subsidies are routinely used to encourage US studios to produce US content in Canada for US audiences. Foreign Location Shooting (all those Netflix, Disney or Hallmark and other productions made in Canada where Vancouver substitutes for Seattle or Toronto for some large US city) is big business and is heavily subsidized by Canadian taxpayers through both provincial and federal incentives.

If the objective is to keep workers in the Canadian film industry employed while facilitating the telling and indeed the export of Canadian stories, then why not let the streamers, who are skilled at production and international marketing, get full credit for the funds they put into Canadian production by allowing them to hold the rights and determine how the product will be used? If it is Canadian policy to increase the production and international distribution of Cancon (using the current criteria but without the copyright restriction), why not apply the euphemistically titled film “tax credits” to Cancon regardless of whether the IP rights are held by an international company or a Canadian entity?  Such an approach is likely to give Cancon much wider exposure than currently.

Some will say this is naïve; that the US studios have no interest in promoting Canadian stories. They only want to dumb down any expression of Canadian identity. I would respond with two points. First, a lot of what already qualifies as CanCon has no recognizable Canadian identity but provides sustenance for Canadian creatives, directors, showrunners, even hairdressers. Second, the studios will produce what sells. They are neither for nor against Canadian identity. If a good story is enhanced by a being set in a Canadian background–in other words if there is a business case to be made–then it will be produced. If a financial incentive is available for a foreign studio that jumps through all the hoops necessary to obtain CanCon certification, this might be the factor that tips the balance toward greenlighting a production. Canadian stories are not just produced for the limited Canadian market. They can have broad international appeal, including to US audiences, if they are crafted and marketed properly, just as Korean, Nordic, Spanish, British, Australian and other content has enjoyed success internationally.

It is also worth noting that streaming is a competitive business. Costs are going up, as consumers will have noted. While the industry is big, if it is regarded as an unlimited cash cow whose function is to fund every variety of Canadian content, from local news to Indigenous production to minority Official Language groups, then it is not surprising there will be pushback. If the forthcoming policy change results in a more flexible Canadian content policy by waiving or eliminating the Canadian ownership requirement for foreign platforms, while creating incentives for them to produce CanCon rather than punishing them if they do not, this could open the way to a better outcome for the foreign platforms, for consumers and for Canadian creators.

© Hugh Stephens, 2026. All Rights Reserved