Google kills ad fee implemented in response to digital services tax
OTTAWA — Google is eliminating a surcharge on ads it previously implemented in response to Ottawa's now-defunct digital services tax.
A year ago, Google said it would put in place a 2.5 per cent surcharge for ads displayed in Canada in response to the tax, effective October 2024.
A Google spokesperson says the company has now stopped charging the fee, and will refund previously collected funds once the federal government officially repeals legislation that implemented the tax.
The digital services tax would have imposed a three per cent levy on tech giants that generate revenue from Canadian users.
But just before an initial retroactive payment was due June 30, Prime Minister Mark Carney's government said it would eliminate the tax.
The move came after U.S. President Donald Trump put a halt on bilateral trade talks over the levy.
The tax would have applied to companies that operate online marketplaces, online advertising services and social media platforms, and those that earn revenue from some sales of user data.
The first retroactive payment would have left U.S. companies, such as Google, Amazon and Uber, on the hook for an estimated total bill of US$2 billion.
Anja Karadeglija, The Canadian Press
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
an hour ago
- Globe and Mail
Trump's tariffs haven't raised prices yet. That might be a bad sign
John Rapley is a contributing columnist for The Globe and Mail. He is an author and academic whose books include Why Empires Fall and Twilight of the Money Gods. This week's inflation reports in both the United States and Canada were surprisingly benign, given we're in a trade war. In both countries, inflation ticked upwards, but just a bit: enough to keep central banks from cutting interest rates but not to ring the sort of alarm bells that the 'Liberation Day' tariff announcement set off. On the face of it, therefore, Donald Trump has been vindicated. White House press secretary Karoline Leavitt crowed, 'The data proves that President Trump is stabilizing inflation and the Panicans continue to be wrong about tariffs raising prices.' To underscore this point, much was made of a release showing Japanese car prices falling, apparent evidence that Mr. Trump's prediction that foreigners would pay the tariffs was being borne out. But in fact, the data may be more troubling than the White House is letting on. The Japanese figures appear to have been a one-off, reflecting the large cushion Japanese automakers had accumulated: years of a weak yen having made their cars cheap in America, swelling their profits and thus allowing them to slash prices to hold market share. U.S. Federal Reserve's inflation fears start to be realized with June CPI increase But the broader data we're getting on import prices doesn't reveal any softening. On the contrary, a mild inflation continues. So on the whole, foreign exporters aren't eating the tariffs by lowering their prices. That means someone stateside is paying them, and they're paying a lot – US$64-billion in the second quarter alone, nearly US$50-billion more than the same time last year. There are two candidates: businesses and consumers. The big surge in tariff revenues came in May, which confirms what was already suspected – that importers had got ahead of tariffs by stockpiling goods early in the year. Those stocks apparently began to run out only in May, which would account for the take-off of revenue collections then. Given the time between a good's arrival in port and its appearance on store shelves, we would not expect major price increases until perhaps the late summer, which explains some of the softness in prices. In addition, we're getting anecdotal evidence that American companies are, for now, absorbing the hit from tariffs. Given the on-again-off-again character of Mr. Trump's trade war, it's still not clear if tariffs will be in place later this year. He may chicken out and suspend them again, as investors expect, or he may win the great trade deals he's trying to squeeze out of other countries, dropping his tariffs in response. Until more clarity emerges about the long-term status of tariffs, companies are choosing not to alienate their customers with price rises, and are hoping for better days. That can't go on forever, though. Absorbing the tariffs is pressuring their bottom lines, which means they have less money left over for investments, pay rises or Christmas bonuses. This has been showing up in both the soft and hard data, with companies cutting back their hiring plans, job and wage growth slowing and future investment plans softening. Opinion: The market is in denial. Trump wants higher tariffs, and he's getting them Opinion: Trump's trade war madness won't last The picture that emerges, therefore, is of an economy that is slowing as businesses absorb the tariffs. The slowing economy has reduced demand, which in turn has caused service-sector prices to rise more slowly. That disinflation has then counterbalanced the price rises we are seeing elsewhere in the economy, where the impact of tariffs is starting to materialize. For instance, food prices are trending back up in the U.S., which is to be expected since unlike durable goods, food can't be stockpiled, so the effect of tariffs shows up more quickly. In other words, good news on inflation is bad news for the economy. That may be an omen of what lies ahead. If the economy continues slowing, falling demand may keep prices from rising too sharply, but it could also point to a coming recession. Hardly a vindication of the White House. If instead the tax-cuts windfall from Mr. Trump's Big Beautiful Bill stokes sufficient demand to keep the economy out of recession, but the tariffs remain in place, companies will eventually pass along the price rises. That could begin happening in the autumn. The return of inflation, not least to food prices, would also augur ill for the White House, given that Mr. Trump ran for office promising to bring them down. The worst scenario of all is that we get a bit of both, raising the prospect of the dreaded stagflation returning. Mr. Trump's get-out-of-jail card will be if America's trading partners cave and agree to trade deals which both boost U.S. export sales and allow tariffs to fall. So the next few weeks will be crucial, since the President has set Aug. 1 as a deadline for many of the tariffs to take effect. He has until then to end his trade wars, with either victory or surrender. If neither happens, autumn could turn ugly.
National Post
an hour ago
- National Post
'What is a conflict of interest, anyway?' The imagined thoughts of Mark Carney's ethics disclosures
The Conflict of Interest and Ethics Commissioner has released the full details of Mark Carney's asset disclosures, and they reveal a prime minister who appears to be more constrained by conflicts of interest than any other. Article content Carney's years of helping to oversee the trillion-dollar portfolio of Brookfield Asset Management gave him an equity stake over dozens of companies whose fortunes are likely to be directly impacted by the policies of his government. Article content Article content And so, the Ethics Commissioner has accepted a complex arrangement wherein any time one of 103 Carney-linked companies comes up in cabinet discussions, he's supposed to leave the room while declaring that he's doing so. Article content Article content But no, it turns out that all these assets were seen as a liability. A bad thing. The commissioner was prejudicially assuming that just because Mr. Carney happened to own substantial shares of a few dozen companies, this was itself evidence that he would use his public influence for personal gain. For shame, I say. Look within your heart, Canada. An intelligent, beautiful man volunteers to be your prime minister and your first impulse is to assume that he must only be doing it for selfish reasons? Article content Article content Article content What is a conflict of interest, anyway? Mr. Carney is a bipedal mammal who requires oxygen for cellular respiration. Does that put him at a 'conflict of interest' if he takes pro-oxygen positions in public life? Article content I have known Mr. Carney to ride inside automobiles manufactured by Mercedes, Lexus and, if he's slumming it, Volkswagen. Does that put him at a 'conflict of interest' when it comes to foreign relations with the respective governments of Germany and Japan? Article content By your logic, surely his appreciation of the elegant and responsive interior of the 2025 E-class would instantly transform him into a Manchurian candidate loyal only to the whims of Mercedes-Benz AG and the Chancellor of Germany, in that order. Article content Perhaps your next ethical disclosure should uncompromisingly litigate everything that has ever given Mr. Carney joy or satisfaction of any kind. Did he once enjoy a matinee screening of Ladri di biciclette? Watch out; because that surely means he'll sell us out to Italy at the first opportunity.
National Post
an hour ago
- National Post
Ryan Cardwell: Supply management isn't free
Supply management (SM) is a complex set of government policies that restricts production, marketing, and trade of dairy and poultry in Canada. At its core, SM is a textbook cartel in which producers collude to fix production at the national level, and set prices charged to processors who make the consumer food products sold in restaurants and grocery stores. Such collusion is illegal in other industries — food and elsewhere — but is mandated in SM through government policies. Article content Article content Some market outcomes of these policies are high and stable incomes for producers, high consumer prices for dairy and poultry products, and smaller farms. Article content Article content Government support for farm incomes is not new, or unique to SM. Field crop and other livestock producers in Canada receive generous government support as subsidized insurance, direct payments, and other programs. But the support provided to SM producers differs in important ways. Article content First, the level of support provided to SM producers is much higher; the OECD estimates that SM policies in Canada account for approximately one-third of gross farm receipts for SM producers. This is multiples higher than support provided to field crop and other livestock producers. It is noteworthy, too, that recipients of this support are relatively high-income households; average household income for dairy and poultry farm families is more than double the average income of the Canadian households who pay for the support through higher food prices (approximately $245,000 for SM farm families compared to the Canadian average of $116,000). Article content Article content Second, the source of funding for support to SM producers comes from an implicit tax on food, not from government transfers. This has important implications. Support to other agricultural producers is funded from government revenues, much of which is raised through a progressive tax system and does not significantly affect food prices. Article content Article content On the other hand, SM's implicit food tax has regressive distributional effects, imposing a heavier burden on low-income households who spend larger shares of their incomes on food; this implicit tax rate is five times higher for low-income households than for high-income households. Our research shows that support for SM is higher among people who support progressive redistribution policies, despite SM doing precisely the opposite through a regressive tax on consumers and by supporting the incomes of relatively high-income families. Article content The opacity of how cartelized production and import restrictions increase prices is a feature, not a bug, of the system. The effects of these policies are difficult to understand without formal training in economics. Also, these policy tools allow lobby groups to claim that the system isn't subsidized ($5 billion in payments to SM interest groups in the wake of recent trade agreements notwithstanding), while at the same time, admitting that 'consumers pay twice for most food, once through their taxes (whether they buy it or not), and again at the grocery counter,' with the exception of dairy, poultry and egg products.
