Feds should consider scrapping controversial digital services tax amid Trump tariff threats: Morneau
CTV
If the Canadian government wants to make headway with the incoming U.S. administration, it should look at scrapping some sticking-point policies, such as the controversial digital services tax, former Liberal finance minister Bill Morneau says.
If the Canadian government wants to make headway with the incoming U.S. administration, it should look at scrapping some sticking-point policies, such as the controversial digital services tax, former Liberal finance minister Bill Morneau says.
“I would move away from that, and think about the other places that we have a mutual interest in moving forward,” Morneau told CTV’s Question Period host Vassy Kapelos in an interview airing Sunday. “And do that in a way that's calm and that recognizes that we need to have an enduring ability to work together.”
Morneau said that in dealing with U.S. president-elect Donald Trump — and his looming threat of tariffs on Canadian imports — the federal government should look for issues on which the two countries can work together, as opposed to ones that “can inflame differences."
The digital services tax, first pitched by the Liberals in their 2021 budget, imposes a three per cent levy on revenues from tech giants earning money off Canadian content and users.
It has been deeply unpopular and widely criticized by American lawmakers, who have argued for years that the policy disproportionately impacts U.S. companies.
While Finance Minister Chrystia Freeland has pointed to similar taxes levied by other western allies when faced with criticisms of the policy, American officials have countered by asking Ottawa to wait until a global framework is in place.
Last October, the parliamentary budget officer estimated the tax will generate $7.2 billion in revenues for the federal government over five years.
