US digital companies urge Joe Biden to defend them in Ottawa

The coalition first denounces Canada's “discriminatory and retroactive” tax on digital services, which US companies estimate would allow Ottawa to collect US$4 billion over five years, mostly from companies in the United States. United States.

A US tech coalition is urging President Joe Biden to take a hard line on Canada's approach to digital services.

The coalition of various industry associations says the proposed digital services tax unfairly targets U.S. businesses and runs counter to efforts to set an international standard for taxation.

In a letter to President Joe Biden, these companies also complain about two bills currently before the Canadian Parliament: Bill C-11 on online streaming and Bill C-18 on online news.

US companies warn that C-11, which aims to protect Canadian content providers, could backfire and ultimately increase costs for consumers.

They also fear that the Online News Act, which would compensate Canadian news media and broadcasters, violates the Canada-United States-Mexico Agreement (CUSMA).

Mr. Biden meets with Prime Minister Justin Trudeau beginning Thursday, during his first visit to Canada since arriving at the White House in January 2021.

We are concerned that Canada is pursuing a number of problematic proposals and actions that could significantly limit the ability of U.S. companies to export their goods and services and compete fairly in the Canadian market, the letter states.

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It is essential that the United States hold Canada accountable to its CUSMA commitments to ensure the continued success of this important agreement.

The letter is signed by 10 associations of different players in the digital services sector, with the support in particular of the United States Chamber of Commerce.

The coalition first denounces Canada's discriminatory and retroactive digital services tax, which U.S. businesses estimate would allow Ottawa to collect $4 billion U.S. over five years, mostly from businesses in the United States. United States.

The tax, designed to ensure that digital giants pay their fair share of taxes in the countries where they derive income without a physical presence, does not x27;will only enter into force next year if a new multilateral tax framework does not take shape by then.

Canada supported the idea of ​​an “inclusive framework on base erosion and profit shifting”, established under the auspices of the G20 and the United Nations. Organization for Economic Co-operation and Development (OECD).

Canada's imposition of a digital goods tax would set a damaging precedent, which would see other participants in the Inclusive Framework adopt similarly targeted taxes on U.S. digital services , the coalition says in the letter to President Biden.

Such a precedent would also be concerning with the Online Streaming Act, which the associations say looks like an effort to to apply to the Internet medium a regulatory system designed for the traditionally restricted world of broadcasting.

If passed, Bill C-11 could have disastrous consequences for content production and distribution, and could inspire other countries to implement similar content preference systems.

Coalition members argue that Bill C-18 on online news, which is already fueling tensions between the federal government and tech giants like Google and Meta, appears to exclude digital companies from the mainstream. outside the United States, which would violate the terms of the North American Trilateral Free Trade Agreement (CUSMA).

“It is essential that the United States government hold Canada to its trade commitments and that it highlights the harmful global precedent that would be set if Canada implemented these measures in their current form.

— Excerpt from the letter from the US Digital Business Coalition

Canadian Heritage Minister Pablo Rodriguez on Wednesday rejected the idea that the bills are aimed specifically at the Americans. Any company that does this kind of business is affected by the bills, whether US, European or Canadian, Rodriguez said.

En In fact, the Government of Canada is just doing its job. There are big tech companies saying, “No, no, no, we're not going to let you do your job.” Well, we do.