Close X
Thursday, September 26, 2024
ADVT 
National

US fires shot across Canada's bow over digital tax

Darpan News Desk The Canadian Press, 22 Feb, 2022 04:59 PM
  • US fires shot across Canada's bow over digital tax

WASHINGTON - The U.S. Trade Representative's office has once again made its feelings clear about Canada's plan to implement a controversial new tax on digital services.

The office issued an abrupt statement today, the final day of public consultation on the proposal, urging the federal government to change course.

It wants Ottawa to focus instead on a multilateral plan for a global tax regime for so-called multinational enterprises — tech giants like Meta, Facebook's parent company, and Alphabet Inc., which owns Google.

Canada's proposal, which includes a three per cent tax worth $3.4 billion in revenue over five years, would only take effect in 2024 if those efforts don't come to pass.

But the USTR says that as a signatory to what's known as the "two-pillar" solution, Canada's unilateral alternative risks undermining the global tax plan by encouraging other countries to follow its lead.

The office says should Canada's plan go ahead, it would be seen by the U.S. — home to many of the impacted companies — as discriminatory and a violation of American trade law.

The global minimum tax agreement is supported by 136 countries, including all members of the G20 as well as the Organization for Economic Co-operation and Development.

The first "pillar" of that plan is a moratorium on new digital service taxes while G20 and OECD members hash out the jurisdictional and sharing details of the complex scheme.

"As Canada is fully aware, the United States has serious concerns about measures that single out American firms for taxation while effectively excluding national firms engaged in similar lines of business," the USTR says in its public submission.

It calls the plan a "counterproductive unilateral measure" and urges Canada to "focus efforts on engaging constructively in the multilateral OECD negotiations — ensuring that its unilateral measure proposal is unnecessary and that Canadian interests are protected."

Deputy Prime Minister Chrystia Freeland promised to delay the implementation of the tax for two more years, provided the OECD plan has not already kicked in. But the USTR notes it would be retroactive until the start of the current year.

Officials in Freeland's office say they are pressing ahead with the plan in the name of defending Canadian interests, but hope it won't be necessary to implement it.

Federal ministers have cited the Liberal government's own election promises, including a commitment to require digital companies to compensate legacy media outlets for linking to their work.

 

MORE National ARTICLES

B.C. fruit and vegetable growers face uncertainty

B.C. fruit and vegetable growers face uncertainty
Sandhu's family came to Canada in the early 1960s and began farming about a decade later. Today, the 27-year-old and his parents grow a variety of berries and vegetables across about 120 hectares, while several other relatives have farms nearby in the Abbotsford area.

B.C. fruit and vegetable growers face uncertainty

New COVID-19 variant sparks border concerns

New COVID-19 variant sparks border concerns
Conservative Leader Erin O'Toole has called for the government to immediately strengthen border screening in the face of a highly mutated new variant of COVID-19. The World Health Organization will meet Friday to discuss variant B.1.1.529, which originated in South Africa.

New COVID-19 variant sparks border concerns

B.C. braces for more rain as PM to see flood zone

B.C. braces for more rain as PM to see flood zone
Rainstorms of increasing intensity are forecast to hit British Columbia over the coming days, prompting warnings for people to be prepared to evacuate. Public Safety Minister Mike Farnworth said the biggest storm is expected to arrive Tuesday and people living in areas prone to flooding should be on alert.

B.C. braces for more rain as PM to see flood zone

Human remains in two separate investigations identified

Human remains in two separate investigations identified
The two investigations are not connected and criminality is not believed to be a factor in either death. Both investigations have been turned over to BC Coroners Service. The families of the deceased men have been notified.

Human remains in two separate investigations identified

Extension granted for money laundering report

Extension granted for money laundering report
An inquiry commission has received a six-month extension to file its final report into money laundering in British Columbia. A statement from the Commission of Inquiry into Money Laundering in B.C. says the provincial government has approved a deadline extension to May 20 from Dec. 15.

Extension granted for money laundering report

424 COVID19 cases for Thursday

424 COVID19 cases for Thursday
There are currently 3,061 active cases of COVID-19 in the province, and 211,202 people who tested positive have recovered. Of the active cases, 295 individuals are in hospital and 112 are in intensive care. The remaining people are recovering at home in self-isolation.

424 COVID19 cases for Thursday