WASHINGTON – The U.S. Trade Representative’s office has once again made its feelings clear about Canada’s plan to implement a controversial new tax on digital services.
The office issued an abrupt statement today, the final day of public consultation on the proposal, urging the federal government to change course.
It wants Ottawa to focus instead on a multilateral plan for a global tax regime for so-called multinational enterprises – tech giants like Meta, Facebook’s parent company, and Alphabet Inc., which owns Google.
Canada’s proposal, which includes a three per cent tax worth $3.4 billion in revenue over five years, would only take effect in 2024 if those efforts don’t come to pass.
But the USTR says that as a signatory to what’s known as the “two-pillar” solution, Canada’s unilateral alternative risks undermining the global tax plan by encouraging other countries to follow its lead.
The office says should Canada’s plan go ahead, it would be seen by the U.S. — home to many of the impacted companies — as discriminatory and a violation of American trade law.