The Direction Amending the Direction to the Canadian Radio-television and Telecommunications Commission (CRTC) Respecting the Implementation of the Canada–United States–Mexico Agreement (CUSMA), registered as SOR/2023-181 on August 4, 2023, outlines updates to the regulatory framework governing the distribution of U.S. home shopping television programming services in Canada. This directive reflects Canada’s obligations under CUSMA, which took effect on July 1, 2020.

In 2020, the Canadian government tasked the CRTC with implementing CUSMA commitments concerning U.S. home shopping services. Initially, the mandate required the CRTC to permit the distribution of unmodified U.S. home shopping services in Canada and to facilitate their negotiation of affiliation agreements with Canadian distributors. However, modifications to these services for the Canadian market faced regulatory hurdles, primarily due to stipulations that required modified services to originate in Canada and utilize Canadian resources.

The U.S. government has expressed ongoing dissatisfaction with Canada’s implementation of these commitments, arguing that the existing conditions serve as barriers to access. This issue has been raised through various diplomatic channels, with the potential for escalation to formal dispute settlement processes if left unresolved.

The amended Direction now specifies that both unmodified and modified U.S. home shopping programming services will be authorized for distribution in Canada. This change eliminates previous requirements that modified services originate in Canada or employ Canadian resources. Specifically, the CRTC is mandated to add both unmodified and modified U.S. home shopping services to its List of non-Canadian programming services authorized for distribution in Canada and to ensure these services can negotiate with Canadian cable, satellite, and IPTV distributors. This facilitates their access to the Canadian market without the constraints previously imposed by the Exemption Order.

As an independent body, the CRTC regulates all aspects of the Canadian broadcasting system. It can authorize the distribution of foreign programming services through its List but does not have the authority to issue licenses to foreign services directly. Previously, modified services were ineligible for the List, requiring compliance with the Exemption Order, which mandates that exempt services must originate programming in Canada and utilize Canadian resources.

The amended Direction aims to align Canada’s regulatory practices with its CUSMA obligations, addressing U.S. concerns about barriers to service access. The U.S. has indicated that the former conditions imposed by the CRTC create an unfair environment for its home shopping services, raising the potential for U.S. retaliation or dispute action if Canada fails to meet its commitments.

Canada (SOR/2023-181) August 16, 2023