Post Tagged with: "OECD"

Tax Day New York. April 17, 2012 (7104232285) by Michael Fleshman from Brooklyn, The Democratic People's Republic of Brooklyn, CC BY-SA 2.0 , via Wikimedia Commons

Know When to Fold Em: The Big Risk Behind Canada’s Digital Services Tax Bet

The Globe and Mail runs my opinion piece on Canada’s digital services tax today. I open by noting that the Canadian government’s efforts to regulate big tech companies sometimes feels like a series of high-stakes poker matches in which the government foolishly bets that readily apparent risks can be ignored. That approach has proven costly: the plan to regulate internet streaming services is now mired in multiple legal challenges in court, while news links on Facebook and Instagram have been blocked in Canada for nearly a year in response to the Online News Act.

The latest high-risk strategy involves the implementation of a digital services tax, which could lead to billions in tariff retaliation targeting some of Canada’s most important economic sectors.

July 11, 2024 — 13 comments — Columns

Protesting Against Apple's Tax Policy - Dublin Street Art by William Murphy (CC BY-SA 2.0) https://flic.kr/p/nhLhoz

It’s Complicated: Unpacking the Risks Behind Canada’s Digital Services Tax Plan

The Canadian government released a detailed document last week outlining the specifics behind its draft Digital Services Tax Act. No actual legislation has yet been passed, but the government is providing guidance on how the potential law would be interpreted assuming it takes effect next year. The document has sparked criticism from business groups and the U.S. government given that it envisions a retroactive three percent tax that will hit a wide range of businesses. Further, the Canadian plan is facing significant opposition from many OECD countries since it may jeopardize a global agreement that is designed to address the digital services tax issue. While the digital services tax (DST) is typically framed as a tax on big tech, the reality is that the Canadian version extends far beyond just companies such as Google and Facebook, potentially including major Canadian retailers such as Canadian Tire, Loblaws, and others.

My view is that unlike Bills C-11 and C-18, which create cross-industry subsidy models funded by tech companies to support government policy, appropriate taxation models is the far better approach to ensure that companies “pay their fair share”. While a DST may be a good approach (particularly if part of a global system), the Canadian plan to implement the tax retroactively next year creates some significant risks. In fact, our current approach raises the prospect of U.S. tariff retaliation, opposition from many allies at the OECD, and expanded news link blocking in response to Bill C-18.

August 9, 2023 — 15 comments — News

Prime Minister of Canada, Justin Trudeau, with Secretary-General, Angel Gurria, during a bilateral meeting in Paris, France by Herve Cortinat / OECD (CC BY-NC 2.0) https://flic.kr/p/26a54hN

Why the Digital Services Tax Act Violates Canada’s OECD Commitment to a Tax Moratorium

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.

December 17, 2021 — 3 comments — News

OECD, Mobile data usage per mobile broadband subscription (Dec. 2017) http://www.oecd.org/sti/broadband/1.14-MobileDataUsage-2017-12.xls

The Consequences of High Wireless Costs: OECD Data Confirms Canadians Lag Behind in Data Usage

The OECD released the latest data on broadband usage this week highlighting yet again that the high costs of Canadian wireless services have real world consequences when it comes to consumer data usage. Earlier this month, Canadian Wireless Telecommunications Association President Robert Ghiz told an industry conference:

Consumption of mobile data – through all kinds of apps and every flavour of streaming content – continues to grow at an astounding rate in Canada. Mobile data traffic in our country increased by 41% between 2015 and 2016 alone.

Yet the OECD comparative data tells a far different story. First, OECD data indicates that Canada is at the low end of countries when measured by mobile broadband subscriptions per 100 inhabitants, ranking well below the OECD average and ahead of only six other OECD countries.

June 29, 2018 — 25 comments — News

Some SIM cards by mroach (CC BY-SA 2.0) https://flic.kr/p/5jBZEx

Competition Matters: New Study Supports Government Policy Focused on Fourth Wireless Player

Last year’s explosive battle over the potential entry of wireless giant Verizon into the Canadian market may be a distant memory, but the debate over the state of wireless competition remains very much alive. Industry Minister James Moore has pointed to a modest decline in consumer pricing and complaints as evidence that government policies aimed at fostering a more competitive market are working.

The big three wireless carriers remain adamant that the Canadian market is competitive and that while pricing may be high relative to some other countries, that is a function of the quality of their networks. In other words, you get what you pay for.

There is seemingly no major international entrant on the horizon, but the Canadian Radio-television and Telecommunications Commission is currently grappling with an assortment of policy measures aimed at improving the competitiveness of new entrants and facilitating the development of a more robust market for virtual operators who could enhance consumer choice. Moreover, the government is planning another spectrum auction early next year that would benefit new entrants.

My weekly technology law column (Toronto Star version, homepage version) notes that at the heart of the debate is whether creating a fourth national carrier is a legitimate policy goal or a mirage that will do little to decrease pricing or create market innovation. The major carriers argue that the Canadian market is too small to support a fourth national carrier and that competitiveness is not directly correlated to the number of national operators.

November 12, 2014 — 2 comments — Columns