The World Forum - June 17th, 2024

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‘No choice’ but to retaliate against Canadian digital tax, U.S. ambassador says


The United States could target digital trade if it decides on retaliatory measures against a proposed Canadian digital services tax, U.S. ambassador to Canada David Cohen said.

The Liberal government confirmed this week it plans to go ahead with the tax targeting Big Tech in 2024, despite 138 other countries and jurisdictions agreeing last week to delay similar measures.

In an interview with the National Post’s John Ivison, Cohen pointed out United States Trade Representative Katherine Tai has previously warned Canada should not implement a unilateral tax.

Cohen said Tai’s “statement was direct and clear and strong that if Canada decides to proceed alone, you leave the United States with no choice but to take retaliatory measures in the trade context, potentially in the digital trade context, in order to respond to that.”

The Canadian tax, estimated to bring in $3.4 billion over five years, is aimed at large companies that operate online marketplaces, social media platforms and earn revenue from online advertising. This includes Amazon, Google, Facebook, Uber and Airbnb. The Liberal government first promised the tax in the 2021 budget. It would be retroactive to 2022, meaning the companies would be on the hook for more than $1 billion once it comes into effect.