IAB Canada members have expressed concerns over the recent implementation of the Digital Services Tax and we are working with our community to help navigate the implications. We have followed the file closely with hopes that Canada would hold out to participate with the OECD Multilateral Convention which was gaining some traction internationally. Now, we find ourselves in a position to provide guidance, clarity and information regarding the DST as our $18B sector scrambles to understand the consequences.
Regrettably, the “go-it-alone” approach of the Canadian government is adding insult to injury at a difficult time both economically and politically for Canadians. Predictably, digital media platforms and service providers caught in the discriminatory net of the C59, are planning to pass on the bill to media investors large and small who in turn, will be forced to make hard-working Canadians pay.
While the short-term pinch will be felt across the country, the longer-term impact is more dire. Retaliatory tariffs from our closest trade partners south of the border are almost guaranteed with CUSMA renegotiation looming in 2026. We can expect an uphill battle to make-up for this targeted bill and can already watch this nightmare unfold in France where a similar tax was implemented which the U.S. Trade Representative has ruled to be a “discriminatory” tax and actionable under Section 301 of the Trade Act of 1974.
While we assess the damage caused not only by the DST itself but the egregious retroactivity to 2022 it demands, we urge policymakers to take notes as, yet another ill-conceived law crushes a sector that represents such a beacon of economic growth and productivity to the Canadian economy.
IF you would like to join the discussion please reach out to policy@iabcanada.com