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Canada's Deputy Prime Minister and Minister of Finance Chrystia Freeland takes part in a press conference in Ottawa, Canada, on Jan. 29, 2024.

REUTERS/Blair Gable/File Photo

Canada’s threatened tax on tech giants risks trade war

Canadian Finance Minister Chrystia Freeland plans to unveil the federal budget on April 16, a release that will be keenly watched north and south of the border. Big Tech companies, in particular, will be looking for clues about when Canada will implement its long-promised digital services tax.

Justin Trudeau’s cash-strapped Liberal government hopes to raise up to $2.5 billion over five years by imposing a 3% tax on companies like Alphabet, Meta, Uber, Amazon, and Airbnb. First promised in the 2021 budget, the Trudeau government said it would implement the tax on Jan. 1, 2024, retroactive to 2022.

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Canada's Deputy Prime Minister and Minister of Finance Chrystia Freeland.

REUTERS/Blair Gable

Will Trudeau’s digital services tax lead to trade dispute?

The Liberals announced plans this week to introduce a 3% digital services tax on big tech companies, setting Ottawa up for a likely showdown with Washington.
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Canada's Deputy Prime Minister and Minister of Finance Chrystia Freeland speaks to journalists on Parliament Hill.

REUTERS/Blair Gable

Expect a ‘big fight’ over digital service tax

The US ambassador has once again warned Canada that it should expect consequences if it proceeds with a plan to impose a digital service tax on the tech giants. David Cohen, in response to an audience question at a Canadian Club luncheon in Ottawa, signaled that it could get nasty.

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