OTTAWA – Following the Liberal government’s election win in October, Friends of Canadian Broadcasting has filed new subjects of discussion in its federal lobby files which aim to hold the new government accountable on election promises to tax foreign digital services.
The advocacy group seeks “equal enforcement of the Broadcasting Act” and the “application of the Broadcasting Act to non-traditional media,” according to the December 10 registration under Jacob Homel, a member of the organization.
“Everything from taxes to collecting HST to being liable for what is published on a social media platform – that’s [registration] a euphemism for applying the rules to foreign companies, in particular the technology companies,” Friends’ communications director Jim Thompson said in an interview.
“It’s no secret that all of the parties during the election campaign, in one form or another, made commitments about applying some or all of those kind of obligations to the tech platforms, and so our goal is to make sure those election time commitments or promises are followed-up on and turned into policy during this Parliament,” Thompson added.
The governing Liberals, who now have a minority government, have promised to force technology giants (the likes of Facebook, Amazon, Apple, Netflix, Google and others) – which meet certain high revenue thresholds – to pay a 3% tax on such things as online advertising and user data they generate from Canada, in line with the French government’s approach that drew the ire of the Americans.
The Liberals have also said they would align Canada with the Organisation for Economic Co-operation and Development (OECD) to ensure that they also collect and remit “the same level of sales taxation as Canada’s digital corporations,” according to the election platform. It was previously reported that the OECD was expected to have new rules for digital taxes this month.
The Liberal platform said the country would raise from the measures $540 million in 2020-21, $600 in 2021-22, $660 million in 2022-23, and $730 million in 2023-24.
The other major parties have also pledged during the campaign to levy some kind of taxation that they said would bring more equilibrium to the landscape.
In May 2018, the CRTC published a report, at the behest of the federal government, that would try to remedy this problem. Called “Harnessing Change,” the report included recommendations that would force foreign entities which benefit from the Canadian system to make “equitable” contributions to it.
Friends’ latest lobby registration comes after Facebook registered to lobby on the issue of digital services taxes in November, which follows Twitter’s own additional lobby components earlier that same month. The latter added the subject of digital tax proposals for the Income Tax Act, as well as “Internet advertising policy, specifically the adoption of digital media and advertising by government.”
Friends, which has been an outspoken critic of Facebook on its data collection practices and environment of “junk news,” has also been urging the federal government to close what they call an income tax loophole that allows for a tax deduction on ads sold to foreign internet media. It said the government is, in effect, subsidizing those ads to the tune of $1.6 billion a year – further exacerbating the revenue gap between foreign giants and their Canadian counterparts.
Friends also includes on its lobby files the “independence of CBC/Radio Canada,” “protecting Canadian content on air and online,” and “restrictions on foreign ownership.” Some of these issues were among those studied by a government-appointed panel reviewing the country’s communications laws, whose recommendations are expected to be released later this month.
