U.S. opposition to digital services tax long predates Trump administration

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OTTAWA — U.S. opposition to Canada’s Digital Services Tax (DST) was brewing long before Donald Trump became U.S. president.

The contentious legislation — requiring foreign tech giants such as Google, Facebook parent company Meta, Apple, Uber and others to pay a tax of 3% of their Canadian revenues — was proven to be a sore spot for American lawmakers since the levy was first announced in 2020.

The legislation, which became law last year, includes a June 30 deadline for companies to pay the levy retroactive to 2022 — a potentially $2 billion tax bill.

Canadian lawmakers insisted this week that the deadline still stands.

Development of the DST came amidst ongoing battles with Google and Meta over revenue sharing for Canadian news articles — a move that to this day prevents Canadians from posting or viewing news articles on Facebook and Instagram.

Google, after testing rotating bans on Canadians’ ability to search for news on its platform, eventually came to a $100 million deal with Canadian news publishers last June.

In a September 2023 letter from members of the U.S. House of Representatives Ways and Means committee, Canada’s DST was described as “unusually aggressive” and said American workers would bear the brunt of the tax.

“Given our prolific trading relationship with Canada, its retroactive DST proposal would be especially damaging to U.S. industry and workers,” read that letter, strongly encouraging then-President Joe Biden to use “trade agreements and domestic trade statues” to force Canada to reverse their decision.

The DST means big money for federal coffers — a 2023 report from the Parliamentary Budget Office suggested the tax could see the government collecting $7.2 billion in revenues over five years.

bpassifiume@postmedia.com
X: @bryanpassifiume

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