United States looking at all tools to respond to Canada’s digital services tax

The Office of the United States Trade Representative says it will do what’s necessary to halt Canada's tax on large foreign digital services companies as American business groups demand action. A man uses a computer keyboard in Toronto in this Sunday, Oct. 9 photo illustration. THE CANADIAN PRESS/Graeme Roy

WASHINGTON, D. C. — The Office of the United States Trade Representative says it will do what’s necessary to halt Canada’s tax on large foreign digital services companies.

Last month Parliament approved the government’s plan to add a three per cent levy on foreign tech giants which generate revenue from Canadian users.

Many of those companies are based in the United States and American industry is demanding action.

The Computer and Communications Industry Association, which represents many big tech companies including Amazon, Apple and Uber, called on President Joe Biden’s administration to take formal steps under the U.S.-Mexico-Canada Free Trade Agreement.

An official with the U.S. trade representative says they are open to using all available tools.

Other countries have a similar tax but critics of the Canadian measure wanted Ottawa to put it on hold to allow the Organization for Economic Co-operation and Development additional time to get a global framework in place.

This report by The Canadian Press was first published July 2, 2024.

The Canadian Press