Canadian businesses are begging Canadian Prime Minister, Justin Trudeau, to pump the brakes on the Digital Services Tax.
Canada’s war on the open internet has already caused tremendous harm in multiple sectors within the nation.
For instance, with the Online Streaming Act, Canadian creators were begging the government to fix the bill. Creators were desperate for very good reason – their entire careers were quite likely on the line here as the CRTC was about to be tasked with demoting their material in favour of government certified speech. They had every reason to beg the government to exempt user generated content. For the government, however, regulating user generated content was the entire point of the bill. So, they gave creators the finger, threw Canadian innovation under the bus, and rammed through the bill anyway to the dismay of creators across the country.
The full effects of the legislation will be seen sometime in late 2024 to 2025 as the CRTC works on implementing this terrible law. That’s not even taking into account inevitable lawsuits that are sure to follow as people’s freedom of expression will invariably be infringed in Canada.
The Canadian government wasn’t done yet. Far from it. In their next step to crack down on the internet, the government pushed through the link tax law known as the Online News Act. During the debates while it was still a bill, independent news organizations signed a petition trying to ask the government to pump the brakes on this. Those calls were repeated throughout the senate hearings as independent news organizations begged for fixing the legislation. Those fixes never came. Instead, Canadian independent news organizations were basically told to die in a fire, warnings about the harms caused by this bill were flatly ignored and called “misinformation”, experts were given the middle finger, and the government rammed through anyway
The ignored warnings of this have already begun. Facebook began blocking news links. Google is widely expected to follow suit and block news links as well. In response, three newspapers have already shut down with the Online News Act being the ultimate culprit that broke those businesses. Other news businesses are expected to follow suit – especially when Google drops news links presumably before the end of the year.
Rather than admit that maybe a mistake was made in all of this, the Canadian government is moving full steam ahead with their crackdown on the internet. The Canadian government is planning on implementing this additional tax on January 1st. This while retroactively charging web businesses all the way back to 2022. The US has pointed out that the way this tax is set up, it discriminates against US businesses and has said that they plan on retaliating in kind to this projected $7.2 billion tax. The US has repeatedly warned Canada not to go through with this, raising the very real prospect of Canada sparking a massive multi-billion dollar trade war.
Canadian businesses are apparently realizing that any one of them could become the next collateral damage in Canada’s war on the open internet. So, in response, they are now begging Trudeau to at least put a pause on this tax. From the Canadian Press:
Business leaders are seizing on Prime Minister Justin Trudeau’s trip to Washington on Friday to urge him to delay a controversial tax aimed at foreign tech firms that cater to Canadian audiences.
The digital services tax, which takes effect in January, is deeply unpopular with Canada’s most important ally and trading partner, says Goldy Hyder, president and CEO of the Business Council of Canada.
And those tensions are mounting at a time of growing international instability, when the country’s relationship with like-minded allies such as the U.S. should be a top priority, Hyder writes in a new letter to the prime minister.
Instead, Canada should agree to U.S. demands that the tax be held in abeyance until a global taxation framework being developed within the Organization for Economic Co-operation and Development can be introduced.
“Canada’s economic interests will be severely harmed if Canada continues to defy the overwhelming OECD consensus,” Hyder writes in the letter, a copy of which was provided to The Canadian Press.
“Amid growing economic uncertainty around the globe, Canada cannot afford a costly trade war with our most important trading partner.”
This has become an all too familiar pattern. Now, Canadian businesses are rightfully freaking out about potentially becoming the next round of collateral damage. The thing in all of this is not knowing who will get hit. Would it be the food sector? What about lumber? How about automotive? We really don’t know how the American’s are going to retaliate, but we do know that if Canada just ignores all the warnings (again) and rams through this tax, then the list of victims of Trudeau’s policies is only set to grow. We already have digital first creators and members of the news sector already part of the list of victims. The real question is, who is going to join them? As of now, we really don’t know.
What we do know is that Canadian businesses aren’t exactly sitting around, waiting to find out. There is certainly some pushback going on right now. To them, we can only say, “good luck. We know from experience that logic, reason, and common sense may not be enough to sway the Canadian government at this point. We know this from experience.”
If Canadian businesses actually persuade the government, they would be the first to get through to the government officials thick skulls. Judging by history, that is going to be far from an easy thing to accomplish. As was said multiple times in Star Wars, “I’ve got a bad feeling about this.”
Drew Wilson on Twitter: @icecube85 and Facebook.
