Barry Appleton: Trump’s demands to change our laws must be rejected

Canada's streaming regulations, whether ill advised or not, should not be part of a trade agreement, argues Barry Appleton. Photo by CHRIS DELMAS /AFP via Getty Images

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The United States pressed Canada on the protection of the French language and our culture until the very last minute of negotiations. That is Prime Minister Mark Carney’s account. Reporting on the leaked terms adds that Ottawa was asked to scupper its digital legislation. Not amend it. Not delay it. Drop it.

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The American side disputes the characterization. Trade representative Jamieson Greer calls Canada’s streaming rules “the farthest thing from the red line,” and Canada’s minister for trade with the U.S., Dominic LeBlanc, has welcomed Washington’s withdrawal of its positions on language and culture. Take Greer at his word. He still confirms that American negotiators had questions about online streaming rules, and he listed “digital trade alignment” among the things a deal would contain. A demand that can be withdrawn can be made again.

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Quebec’s Bill 109, An Act to affirm the cultural sovereignty of Quebec, was adopted unanimously by the National Assembly last December and will require streaming platforms and device makers to surface French-language content for Quebec users. Its constitutionality is contested, because broadcasting has long been federal ground; that argument belongs to Canadian judges applying the division of powers.

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A foreign government put the repeal of Canadian statutes on a tariff schedule and came close to getting it. That is the logical end of a bargain Canada has been making quietly, and without argument, since the first free trade agreement.

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Whether our laws survive is a question for our courts.

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I spent my career on the free trade side of it. I advised Ontario’s cabinet committee during the original NAFTA negotiations and the government of British Columbia during its implementation. Open markets made Canadians richer, and I would make that case again tomorrow. Having sat through those early trade rooms, I can tell you we never intended free trade to mean regulatory surrender.

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Somewhere along the way we confused two things. Neoliberalism was an argument for restraining our own government. In the digital economy we turned it into an argument for not governing at all, and assumed a rulebook we declined to write would stay blank. It filled with somebody else’s.

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A market is a set of rules: property that can be owned, contracts a court will enforce, entry that is possible for a firm with a better product and no incumbent’s permission. Someone writes those rules. The only question is who. For thirty years, the answer was somebody else.

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I agree with the familiar complaint about Canadian economic policy, then part company with it. Ottawa protects the wrong things.

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It shelters cartels in banking, telecom, airlines and dairy, which raises prices on Canadians and manufactures most of the irritants that dominate every negotiation we enter, and it then declines to protect competition in the one market where Canadian firms are price-takers with nowhere to go. We were promised that a fat, lazy incumbent invites competition. Digital markets run the other way. The more users a platform has, the more data it gathers and the better it gets at keeping them, so the leader pulls further ahead each year. Nobody catches up from behind.