Ahead of the June 30th payment deadline, IAB Canada is making a final appeal to the federal government to repeal the Digital Services Tax (DST) – or at a minimum, remove its retroactive application to January 1st, 2022. Despite initial intentions to target large digital platforms, the DST has placed disproportionate strain on Canadian Small-to-Medium Sized Enterprises (SMEs) and risks sparking major trade tensions. You can read our letter to the Honourable Minister François-Philippe Champagne, Minister of Finance and National Revenue, here.
Key Concerns:
- SME Impact: Passthrough costs have significantly increased ad budgets for small businesses; some say it threatens their survival.
- Retroactive Burden: The backdated application to 2022 adds unexpected financial pressure.
- US Opposition: Both the Biden and Trump administrations strongly condemned the DST; President Trump warned of retaliation.
- Canada-United States-Mexico Agreement (CUSMA) Risk: The DST will likely be a flashpoint in the 2026 CUSMA renegotiations – potentially sooner under a Trump-led administration.
- Economic Ripple Effect: Digital advertising affects nearly every sector of our economy; the DST’s impact is widespread.
- Investment Deterrent: It discourages U.S. firms from investing or operating in Canada.
- Public Awareness: We released an infographic outlining the risks of the DST to the economy here.
In Summary
The DST is hurting Canadian businesses, straining international relations, and putting future trade at risk. IAB Canada urges the federal government to repeal the tax – or at the very least, its retroactive clause – before the June 30th deadline.
If you would like to discuss the DST or any other issue, please contact us at [email protected].
Please read our previous submissions and articles on the DST here: