CAN-USA Tariff Strife (split from various pol threads)

[KevinB]

So I’m a little confused. As I see it the major problem is part of the tax is that it mentioned advertising income. Clearly a Good or Sevice being acquired in a country can be taxed. I can’t watch my Amazon or Nexflix accounts in Canada because they are US accounts.

I’ve heard several different versions of the Bill, and maybe I’m misunderstanding part of it - but people who have a Canadian version of the accounts (Amazon, Netflix, Hulu whatever) are already paying for the service. The company is already taxed on their income from that service.

To me this seem simply to be an add on tax, trying to claim an arbitrary amount of extra tax dollars from advertising income.

Now I’m not an accountant, but generally taxes are on one’s net income, not every gross income stream.

 

[The Bread Guy]

The company is already taxed on their income from that service.

But who are they paying the taxes on the money they make to?

They send the sales tax they collect to Canada’s Gov’t like any other business.

Doing a bit of digging, it appears that company is paying payroll taxes, but nobody can find how much they’re paying on their sales. This from the G&M 2022 …https://archive.is/PhT4M

How many Canadian companies pay their payroll taxes but zero tax on their profit from Canadian sales? It may be more than zero w/Amazon, but we can’t tell. And if it was more than zero, and they’re opening their kimono a bit, I suspect they’d open it more if there was something to show.

One argument is that if they’re an American company, they pay taxes on their profit in the US - and part of that profit comes from ad sales.

The other is that if they’re making a profit in Canada, they should pay taxes on that profit in Canada.

I’m still learning too - and not an accountant - so happy to be educated if I’m getting it wrong too.

 

[Brad Sallows]

Once countries start reaching across borders, what is the limit supposed to be?

 

[The Bread Guy]

Once countries start reaching across borders, what is the limit supposed to be?

Some ask the same about stuff the US is doing, but good question to ask in all directions.

 

[RangerRay]

I just see that sooner or later the remaining adults in the Senate/Congress are going to come together and shut this shit down before the whole thing just comes crashing down.

AHAHAHAHAHAHAHAHAHAHA!!!


Oh, you were serious? Sorry, I thought it was obvious for the last 9 years that the Republican Party has become a personality cult wholly owned by the Trump family.

Canada is uber protectionist and our laws dissuade competition. The Competition Act is a weak piece of legislation that hurts consumers and hurts rank & file Canadians.

We now have an economy where each sector is dominated by a small group of Oligopolies. I do believe it's part of the reason for our current malaise.

I’m pretty sure it was Jen Gerson who referred to Canada as three oligopolies in a trench coat.

 

[RangerRay]

Again, Canadians should not be surprised by the American response to our Digital Services Tax. This is a bipartisan issue down there, and they have long signalled their distaste with this

Ignoring the Warning Signs: Why Did the Canadian Government Dismiss the Trade Risks of a Digital Services Tax?

There can be many reactions to the current battle with the U.S. over a digital services tax, but surprise should not be one of them.

open.substack.com

 

[Brad Sallows]

Some ask the same about stuff the US is doing, but good question to ask in all directions.

Sure they do, but what's their point supposed to be if we're pushing boundaries ourselves?

 

[Remius]

I missed this earlier.

Greenland awards Canadian miner permit for metal critical to defence industry

Greenland Resources given OK to explore for molybdenum as Arctic island and its mineral riches have become hot geopolitical topics. Read on.

financialpost.com

I wonder if that is a factor in the latest US tantrum…

 

[Humphrey Bogart]

It's not, of course.

That said, HB's point about our dominant oligopolies is well founded. In some cases our geography makes it pretty inevitable. There would be benefit to Canadian consumers from opening the markets up more to foreign competitors in some sectors, providing the playing field is kept even.

It's not only about the consumers either. It's about creating competition amongst business. Those companies that adapt will survive and those who do not will fail. It's about making our economy more dynamic and innovative.

 

[Brad Sallows]

What a peculiar people we have become. We want the prosperity of international trade, and then fret if the necessary outflow of money isn't balanced and taxed in some arcane way instead of just making this a really cost-advantageous country from which to do business. There will never be a completely even playing field from any major political party currently constituted; they all want to use taxation and subsidization in some way to shape winners and losers.

We don't need to follow the lead of the countries that are trying to form international agreements to eliminate jurisdictional tax competition among themselves. When we seek to create ways to tax new sources, particularly sources abroad, we should expect "challenge accepted". Undoubtedly we will whine then, too, when that happens.

 

[Remius]

Canada ‘caved’ to U.S. by dropping tax, White House says

Prime Minister Mark Carney said Monday his move to drop Canada’s digital services tax is part of the broader trade negotiation with the United States, even as the White House said Carney “caved” to U.S. President Donald Trump.

www.ctvnews.ca

So let’s see what the next tantrum will be.

 

[brihard]

Canada ‘caved’ to U.S. by dropping tax, White House says

Prime Minister Mark Carney said Monday his move to drop Canada’s digital services tax is part of the broader trade negotiation with the United States, even as the White House said Carney “caved” to U.S. President Donald Trump.

www.ctvnews.ca

So let’s see what the next tantrum will be.

Supply management, even though they practically never hit the quotas.

If there’s any PM who might kill supply management, it’s Carney. But it’s absurdly politically sensitive so who knows if he will.

 

[RangerRay]

Well, I got that one wrong. I didn’t think there was anyway the Liberals would ditch that tax, especially after Trump demanded it.

 

[daftandbarmy]

Meanwhile, the manufacturing sector - a primary money maker - struggles...

Statistics Canada says real GDP down 0.1 per cent in April as manufacturing slowed​

OTTAWA — The Canadian economy edged lower in April as the manufacturing sector posted its largest drop since April 2021 in the face of U.S. tariffs. Statistics Canada said Friday that real gross domestic product edged down 0.1%

The Canadian economy edged lower in April as the manufacturing sector posted its largest drop since April 2021 in the face of U.S. tariffs.

Statistics Canada said Friday that real gross domestic product edged down 0.1 per cent in April and that its advance estimate for May pointed to a similar decline.

TD economist Marc Ercolao said the downside risks to Canada's economic growth are beginning to manifest, especially in tariff-exposed sectors.

"April's underperformance combined with downbeat expectations for May leave second quarter growth tracking a mild contraction, setting up a sharp pullback from Q1 readings," Ercolao wrote in a report.

"Past this, the outlook through the belly of the year faces clear downside risk as the direct impact from tariffs add to the headwinds from plunging business and consumer sentiment."

April marked the first full month of tariffs from the United States in many sectors — particularly targetting Canada's steel, aluminum and automotive industries.

Statistics Canada says real GDP down 0.1 per cent in April as manufacturing slowed

OTTAWA — The Canadian economy edged lower in April as the manufacturing sector posted its largest drop since April 2021 in the face of U.S. tariffs. Statistics Canada said Friday that real gross domestic product edged down 0.

www.vancouverisawesome.com

 

[Czech_pivo]

Canada ‘caved’ to U.S. by dropping tax, White House says

Prime Minister Mark Carney said Monday his move to drop Canada’s digital services tax is part of the broader trade negotiation with the United States, even as the White House said Carney “caved” to U.S. President Donald Trump.

www.ctvnews.ca

So let’s see what the next tantrum will be.

Good question.

 

[Halifax Tar]

Glad to see the Gov saw the light and walked back on this silly tax.

 

[Retired AF Guy]

Supply management, even though they practically never hit the quotas.

If there’s any PM who might kill supply management, it’s Carney. But it’s absurdly politically sensitive so who knows if he will.

Didn't Parliament just pass a new law that pretty makes it impossible to get rid of supply management?

 

[brihard]

I’m not sure, but what you say does ring a bell.

 

[HavokFour]

I suspect DST was a sacrificial lamb, for supply management. The latter having a significantly bigger effect on the economy.

 

[The Bread Guy]

Didn't Parliament just pass a new law that pretty makes it impossible to get rid of supply management?

"Impossible" may be a strong word*, but they did pass a law to keep supply management out of trade talks, after a similar law disappeared with proroguation late last year - here's what passed:

C-202 (45-1) - LEGISinfo - Parliament of Canada

C-202 (45-1) - LEGISinfo - Parliament of Canada

www.parl.ca

Unanimous "yes"** on third reading in the House, Royal Assent last Thursday (26 June 2025), with mixed reviews, depending on what you're growing/producing.

Farmgate: Pleased with passage of supply management trade bill

Standard-Freeholder columnist celebrates passage of bill that protects supply managed commodities in future trade deals.

www.standard-freeholder.com

Passage of Bill C-202 brings mixed reviews and concerns over future trade talks

Canada's supply managed sector is breathing a sigh of relief with the passage of Bill C-202 which protects it from any further concessions in future trade talks. An identical bill died on the order paper in the last session but this time moved quickly through Parliament and the Senate, before...

www.reachfm.ca

• "Opinion: We needed to get rid of the dairy cartel, not sanctify it in law" (Financial Post)
• "Bill to protect supply management passes, exporters disappointed"
• Canola Farmers Express Deep Disappointment with Passage of C-202 | Farms.com
• "The Beef Farmers of Ontario (BFO) is disappointed to learn of the passing of Bill C-202, an Act to amend the Department of Foreign Affairs, Trade and Development Act ..."

* - Keep in mind they passed more than one law on the digital services tax, too
** - Notable absence: Poilievre was not in the House for that vote on June 5th.