The United States Trade Representative has investigated similar digital taxes and found the taxes discriminate against U.S. tech companies and are actionable under U.S. law. USTR would be justified in pursuing a similar investigation with respect to Canada and has raised concerns regarding the Canadian DST. CCIA last filed comments on the proposed Canada DST in 2022.
The following can be attributed to CCIA Vice President for Digital Trade Jonathan McHale:
“Canada should not depart from the international consensus, and undermine the momentum for implementation of the global agreement to reform international tax rules, by pursuing a flawed digital services tax. Instead, all stakeholders should refocus efforts at the OECD.
“The DST unfortunately marks yet another obstacle for U.S. exporters in Canada, which is becoming a market increasingly hostile to digital suppliers. In addition to the DST, over the past year Canada has pursued an aggressively protectionist digital agenda targeting a broad range of U.S. suppliers. The U.S. government should address these distortive measures through various enforcement or consultation avenues available under U.S. law and relevant trade agreements.”