cut
Why is Canada creating the tax?
Revenue is one big benefit. The Parliamentary Budget Office estimated last year that the tax would bring in more than $7 billion over five years.
The Liberals first promised the tax during the federal election in 2019 under former prime minister Justin Trudeau, but it was delayed for years because a number of other nations wanted to work together on one, overarching digital taxation plan that could be applied in multiple countries.
As the delays dragged on, Canada went ahead with its own t.
Aside from revenue, Ottawa has pitched the DST as a way to bring the tax code up to date and capture revenues earned in Canada by firms located abroad.
What is the U.S. stance on the tax?
The United States has been hostile to the tax from the beginning because it largely affects American tech giants. Officials have argued the tax discriminates against American companies and Congress, notoriously divided between Democrats and Republicans, found a moment of common ground in criticizing Canada's plan.
cut
A number of industry experts — from lawyers to cross-border groups and commerce associations — have warned for years that the tax would strain the relationship between Canada and the U.S., with one going so far as to predict in 2023 that the tax alone would be to blame for a trade war.