Hub Podcasts Canada's digital services tax problem was a long one coming
Jul 3, 2025
Michael Geist, a Professor at the University of Ottawa and an expert in digital policy, dives into Canada's digital services tax challenges. He highlights the historical complexities of this trade issue, tracing its roots long before the Trump presidency. The conversation reveals how Canada’s negotiations, particularly regarding the digital tax, have impacted U.S. relations. Geist also discusses the ongoing struggle to regulate multinational tech firms while ensuring that Canadian values around privacy and competition are upheld in the digital landscape.
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Understanding Digital Services Tax
- Digital services taxes (DSTs) aim to ensure large tech companies pay a fair share of taxes on revenues generated in countries like Canada.
- The U.S. has opposed DSTs across administrations, seeing them as zero-sum in tax revenue allocation.
Canada's DST Timing Misstep
- Canada proceeded with the DST and required payments in mid-2023 despite ongoing U.S. negotiations.
- This pressured the U.S. to threaten trade repercussions, causing Canada to retreat and repeal the DST.
Other Digital Policies Cause Frictions
- Other digital policies like Bill C-11 (streaming tax) and Bill C-18 (Online News Act) could also irritate U.S. trade relations.
- These policies impose payments on U.S. companies without offering them benefits, raising potential trade disputes.