Yesterday, the White House announced the dreaded new round of tariffs which were framed as retaliatory and strategic responses to what the U.S. deems “unfair” trade practices from a range of international partners, including Canada. The full scope of damage is still unfolding but there are clear implications for the digital advertising and media sectors, particularly in light of recent developments referenced in the USTR’s 2025 National Trade Estimate Report on Foreign Trade Barriers.
While we may have averted the worst-case scenario with Canada being exempted from the most aggressive of yesterday’s reciprocal tariff announcement, a 25% tariff on autos goes into effect today. Furthermore, non-compliant CUSMA goods will see a 25% tariff, and non-compliant CUSMA energy and potash will see a 10% tariff.
We’re not out of the woods yet. The USTR’s 2025 National Trade Estimate Report on Foreign Trade Barriers has formally called out several Canadian policy initiatives (see pages 43-45 of the report) as potential irritants and grounds for trade action under USMCA. The following issues are of particular concern to our sector:
1. Online Streaming Contributions (Online Streaming Act)
Canada’s Online Streaming Act, passed in April 2023, is under scrutiny for its impact on U.S.-based platforms. Under new CRTC rules announced in June 2024, streaming services must contribute 5% of their Canadian revenues to the domestic broadcasting system starting in the 2024-2025 broadcast year.
While the framework appears to exempt Canadian platforms, it includes financial obligations for U.S. suppliers—without granting them access to the support mechanisms that their contributions will fund. The U.S. government has flagged this issue for potentially breaching USMCA obligations and has stated it will continue to monitor implementation closely.
2. Digital Services Tax (DST)
Canada’s DST, enacted in June 2024, imposes a 3% levy on gross revenues tied to online marketplaces, targeted advertising, social platforms, and user data. It is retroactive to January 1, 2022, with the first payments due in June 2025.
The U.S. argues that Canada’s DST disproportionately impacts American firms while excluding domestic competitors engaged in similar business activities. This has resulted in a formal USMCA dispute settlement request by the U.S. on August 30, 2024. Additionally, the current U.S. administration has taken steps to disassociate from prior OECD global tax commitments, which further heightens trade tensions surrounding this issue.
IAB Canada has urged the government to repeal the tax and has communicated the negative impact the DST would have on the Canadian digital advertising economy.
3. Mandatory Bargaining Code (Online News Act / Bill C-18)
Passed in June 2023, the Online News Act mandates that designated digital platforms negotiate and compensate Canadian news outlets for linking to their content. The U.S. government continues to monitor the Act’s implementation, expressing concern about the CRTC’s extensive regulatory role over news content and eligibility, which may impact freedom of the press and platform operations.
IAB Canada has advocated for informed and balanced digital policy in Canada and conveyed the importance of recognizing the symbiotic relationship between content and platforms that enable distribution.
What This Means for IAB Canada Members
These policy irritants signal mounting pressure on Canada’s digital policy landscape. The potential for retaliatory tariffs or further trade friction could introduce significant operational and financial challenges for platforms and businesses engaged in the Canadian digital advertising ecosystem—especially those reliant on cross-border data flows, content distribution, or U.S.-based digital platforms.
IAB Canada continues to advocate for a fair and balanced regulatory framework that supports Canadian content and innovation while ensuring open market access and alignment with global digital trade standards. We are closely monitoring the situation and will keep members informed of further developments and potential advocacy opportunities.
Should you have any questions or wish to discuss the implications for your organization, please don’t hesitate to reach out to [email protected].