WCIT Calls on USTR to Oppose Canada’s Proposed Digital Services Tax

With the Canadian government’s push to unilaterally implement a digital services tax (DST) that discriminates against American companies because of their leadership in innovating and delivering digital services, WCIT urges the U.S. Trade Representative (USTR) to work to ensure a fair and level playing field for technology companies operating in the U.S. and Canada.

U.S. companies lead the digital economy because of their innovation, employing 8 million Americansⁱ, with 526,000 of them living and working in the Northwestⁱⁱ. DSTs like the one proposed in Canada penalize this success and seek to give domestic companies a leg up by hampering companies not based in Canadaⁱⁱⁱ.

Furthermore, the proposal to tax revenue starting in 2022 violates the principles of sound tax policy by not allowing companies to plan for significant expenses^iv.

U.S. Trade Representative has a history of fighting against discriminatory DST policies, including Canada’s. We urge USTR to stand by their previous promise^v to, “examine all options, including under our trade agreements and domestic statutes” and take all available actions to stop it.

We appreciate the leadership of Senators Ron Wyden (D-Oregon) and Mike Crapo (R-Idaho) in opposing Canada’s DST, including urging the USTR to, “immediately respond using available trade tools upon Canada’s enactment of any DST.”^vi

The U.S. has an established and vital trade economy with Canada, something we want to see continue to thrive to the benefit of both countries.