The U.S. Chamber of Commerce, the Internet Association—which represents Facebook, Google and Amazon, among others— the Entertainment Software Association and other lobby groups said the measure “purposely targets, and would almost exclusively impact” U.S. firms, undermining their participation in the Canadian technology market. The Liberals’ federal election platform included a three per cent value-added tax on sales of online advertising and user data for companies with $1 billion or more in global revenue, of which at least $40 million is made in Canada. (Reuters)
Talking point: The Liberals’ tax is modelled on one the French government implemented in July, which also provides a template for how a U.S.-Canada dispute could play out. At the time, U.S. President Donald Trump threatened a “substantial reciprocal action,” citing French wine, and his administration launched a trade investigation. But the U.S. backed off after France agreed to reimburse the difference between its tax and the OECD’s final proposal to overhaul the global corporate tax system, due by the end of 2020. The Liberals said their tax, which is supposed to take effect in April 2020, is a temporary measure until the OECD changes are implemented. In Ottawa, both Twitter and Airbnb updated their lobbying registrations this month to include the digital-tax proposal.