Domestic businesses are at an unfair disadvantage to foreign competitors who avoid collecting sales tax, the federal auditor general (AG) said in a report. That’s because the Canada Revenue Agency lacks the necessary power to properly collect the levy and investigate non-compliance, and the Canada Border Services Agency did not properly look into whether courier companies handling low-value shipments were following the rules. (CTV News)

Talking point: Sales tax is a key competitive issue for Canadian service and media companies that go head-to-head with foreign streaming and sharing economy platforms like Spotify and Airbnb. In September 2018, my colleague Zane reported that Ottawa collected just US$3.6 million the previous year from companies that voluntarily registered to pay. Some tech giants have said they would comply with laws requiring them to start collecting sales tax, but the government has yet to introduce any. Canadian retailers have a different problem, however. Once the USMCA takes effect, Canadians won’t pay duty on shipments that cost less than $150, up from the current threshold of $20. That means more consumers will shop on U.S. websites, shrinking the market for Canada’s already-troubled retail sector.