The Canadian government’s decision to move ahead with the Digital Services Tax Act, legislation that will take effect in 2024 should the international agreement at the OECD fail to materialize by that date, is problematic for reasons that extend beyond sparking a trade battle with the United States and potentially leading to billions in tariffs on Canadian goods and services. The plan also appears to violate Canada’s commitment at the OECD, in which all members agreed to a moratorium on introducing new digital services taxes.
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Should Have Seen This Coming: U.S. Raises Prospect of Retaliation Over Canada’s Digital Services Tax Plans
For the past two years, Canadian digital tax policy has been on a collision course with Canadian trade policy. The Liberal government committed in the 2019 election campaign to a digital services tax primarily designed to target large U.S. technology companies that generate significant revenues in Canada from online advertising and user data. The policy has been adopted in several other countries, repeatedly sparking a response from the U.S. that threatens to retaliate with tariffs on sensitive sectors of the economy. For example, after France announced plans for a similar tax, the U.S. threatened to levy billions in tariffs on French products.
As the trade threats escalate, the effort to strike an international agreement on the issue has gained increasing traction (my Law Bytes podcast last February with Professor Itai Grinberg provides a great backgrounder into the issue). After a preliminary deal was struck in October on an international approach, the U.S. dropped the tariff threat against several countries. Yet as efforts to finalize and implement the deal continue, Canadian Finance Minister Chrystia Freeland announced this week that new legislation will be introduced to create a Canadian digital services tax (this is distinct from digital sales taxes, which are currently in effect).
The (Still Secret) Online Harms Consultation: What the Government Heard, Part One
The results of this summer’s online harms consultation remains largely shrouded in secrecy as the Canadian government still refuses to disclose the hundreds of submissions it received. Canadian Heritage Minister Pablo Rodriguez now leads the file, but he has said little about his department’s plans or explained why a public consultation should not feature public availability of the submissions. I have maintained an ongoing blog post with links to dozens of submissions that have been independently posted. While even a cursory review reveals widespread criticism, I’ve worked with the University of Ottawa law student Pelle Berends to do a deeper dive on the available submissions. This first post identifies the common concerns raised in the submissions with a chart breaking down the positions posted below. A second post will highlight frequently raised recommendations.
Canada Threatens to Delay Copyright Term Extension in Response to U.S. Electronic Vehicle Tax Credit Plan
Trade tensions between Canada and the U.S. have been rising in recent weeks with the U.S. Build Back Better Act proposing to create a tax credit for electronic vehicles that Canadian officials argue violates the Canada-U.S.-Mexico Agreement. The U.S. plan is said to be the equivalent of a 34 percent tariff on Canadian assembled electric vehicles. While trade disputes are not particularly noteworthy, the Canadian government response certainly is. Last week, Finance Minister Chrystia Freeland and International Trade Minister Mary Ng wrote to eight U.S. Senators with the following warning:
Beyond possible retaliatory actions, if the U.S. proceeds with the tax credit provisions as drafted, we would see this as a significant change in the balance of concessions agreed to in the USMCA. As such, we would consider the possible suspension of USMCA concessions of importance to the U.S. in return. Those concessions could include suspending USMCA dairy tariff-rate quotas and delaying the implementation of USMCA copyright changes.
The Canadian Government’s Groundhog Day Copyright Consultations: The Never-Ending Lobbying Battle for Website Blocking and Weakened User Rights Continues
Copyright did not figure prominently in either the government’s election platform or the Speech from the Throne, but the two departments responsible for copyright policy – Innovation, Science and Industry led by Francois-Philippe Champagne and Canadian Heritage led by Pablo Rodriguez – have both been actively consulting on a myriad of issues this year. The departments just released the submissions they received to one of three consultations on copyright, this one on intermediary liability issues. There was a prior consultation on copyright term extension (expected in some form in 2022 given the obligations under the USMCA) and another on innovation policies such as an exception for text and data mining to support the development of artificial intelligence. I submitted responses to all three consultations (term extension here, AI will be posted shortly).
My submission in the intermediary liability consultation focuses on two main points.
Recent Posts
The Law Bytes Podcast, Episode 232: What Will Canadian Digital Policy Look Like Under the New Liberal Carney Government? 
The Law Bytes Podcast, Episode 231: Sara Bannerman on How Canadian Political Parties Maximize Voter Data Collection and Minimize Privacy Safeguards 
The Law Bytes Podcast, Episode 230: Aengus Bridgman on the 2025 Federal Election, Social Media Platforms, and Misinformation 
The Law Bytes Podcast, Episode 229: My Digital Access Day Keynote – Assessing the Canadian Digital Policy Record 
Queen’s University Trustees Reject Divestment Efforts Emphasizing the Importance of Institutional Neutrality
