Five key points from USMCA

Oct 6, 2018

The new US-Mexico-Canada Agreement (USMCA) dominated the news this week. It's a very long, very complicated agreement. Here are five aspects of the new trade agreement that affect our work.


1. Preserve the cultural exception ✔️

A few weeks ago, FRIENDS supporters funded full page ads in Le Devoir and The Globe and Mail to insist that the new agreement preserve the cultural exception found in NAFTA. This exception preserves our ability to maintain and introduce new measures to support Canadian culture, including regulatory measures in support of Canadian content in broadcasting.

Clearly, our message got through. The new deal preserves NAFTA's cultural exception! This is great news, and a big win for our movement.

2. Equal CanCon obligations for Netflix ✔️

For many years, FRIENDS has argued that Internet broadcasters like Netflix should have the same obligations to create Canadian content as Canadian broadcasters do. According to our legal advisors, the USMCA does not prevent Canada from leveling the playing field. That's good news for our cause, and for Canadian storytelling. Now we must get the government to exercise this power.

3. Accountability for fake news on Facebook ❌

It's not all good news. The USMCA contains provisions that could prevent Canada from holding companies like Facebook responsible for the content they publish. If this is in fact the case, it would be a huge setback for our cause, opening the floodgates for fake news and all other manner of untruthful, uncivilized content to pollute our public square. These provisions caught us by surprise - the came out of nowhere. They are extremely problematic and we'll be working hard to clarify the government's position on this matter and find ways to push back.

4. Closing the Internet advertising loophole ❓

In January of 2017, FRIENDS discovered a loophole in the Income Tax Act that rewards Canadian businesses who advertise with Google, Facebook, YouTube, and other foreign players by allowing them to claim deductions that should be reserved for advertisers who work with Canadian media. This loophole siphons more than $5 billion in advertising revenue away from Canada's news organizations each year, slowly killing them, with massive implications for our culture and democracy. At least 250 Canadian news organizations have already bit the dust in the last ten years.

On account of our advocacy efforts, the federal NDP has endorsed our position, and a Senate committee has called on Mr. Trudeau's government to revisit the loophole.

Unfortunately, the new USMCA contains language that could stymie our efforts to close the loophole that is killing Canadian journalism. At this time, the exact implications are unclear. We're working with talented legal minds to get a better idea of the situation and will report back to you as soon as we know more.

5. The need for a strong CBC ⚠️

While the new agreement doesn't address public broadcasting, it definitely demonstrates just how badly we need the CBC. If the Internet advertising loophole is not closed, and if fake news purveyors like Facebook are given free rein to publish any nonsense they like, we will need a stronger CBC to report unvarnished facts. Under these conditions, we need a vigorous, independent CBC. Its job is now so much more important.

And though the Agreement allows the government to force companies like Netflix to contribute their fair share to Canadian programming, the government must still decide to exercise that power. So far, they haven't. CBC can and should be equipped with the resources and creative latitude to tell Canadian stories that challenge, inspire, and draw us together.


With an election looming, our influence is heightened as politicians become increasingly desperate to win our votes. With your support, we'll organize a national campaign to make sure that our priorities are front and centre by voting day.

If you support our work, please invest in our capacity to continue the fight!

Your contributions finance the research and legal analysis underpinning this message, and they help us convey your support for Canadian journalism, storytelling, and public broadcasting to the federal government.

The new USMCA is a mixed bag that negatively impacts some of our priorities while leaving the door open for us to advance on other fronts. Most importantly, it reinforces the need for a strong, well-funded, fully independent CBC that reports real news and tells Canadian stories.