The party has promised to ensure that foreign tech firms collect and remit tax on Canadian sales. It also promised to impose a three per cent value-added tax on domestic sales of online advertising and user data by firms with worldwide revenues of $1 billion or more, if they make at least $40 million in Canada. The levy would take effect in April 2020, remaining in place until OECD countries agree to a new system for taxing companies based on where they make sales, rather than where they’re headquartered. (The Logic)
Talking point: Saskatchewan and Quebec already require such companies to collect sales tax, but Prime Minister Justin Trudeau has previously shied away from similar policies at the federal level. France has also imposed a three per cent tax on large tech companies’ revenue, though its income thresholds are slightly lower. It applies to 30 firms, primarily American ones including Alphabet, Facebook and Amazon. It’s not clear whether the value-added tax would apply to Canadian firms that exceed the thresholds; they do not currently pay a separate tax on advertising- and data-sales revenue, and the party did not directly answer The Logic’s question on the subject. “International digital companies who do business in Canada should pay the same tax as Canadian digital companies who do business in Canada,” said Eleanore Catenaro, a party spokesperson. The Liberals said the three per cent tax policy would raise $2.53 billion over the first four years, while the parliamentary budget officer estimated the annual revenue would rise to $1.2 billion by 2028–2029.