With the exception of Google, none of the web giants have yet paid a penny to the CRTC.
And it is not the election of Donald Trump that will encourage them to compensate for the income they receive from Canada. Yet this was the objective of the Liberal government when it adopted the Online News Act and the Online Continuous Broadcasting Act. Laws that Pierre Poilievre has promised to modify and even repeal if he takes power.
A year ago this month, Google reached an agreement to pay annual compensation of 100 million Canadian dollars in exchange for the distribution of our news companies’ content. The CRTC is responsible for determining how much money will go to whom. As usual, the system that the administrative court has developed is far-fetched and difficult to apply.
OTTAWA’S INDIFFERENCE
In any case, it is not these compensations that will get our television channels, our newspapers and our magazines out of the miserable state in which the exodus of their advertising revenues has left them. In the indifference of Ottawa, approximately 75% of our companies’ advertising dollars (including those of our governments!) went to line the pockets of the web giants.
A few decades ago, the Canada Revenue Agency saved our magazines from a slow death by refusing to accept as expenses the amounts that Canadian companies spent on advertising in American magazines. Could it have acted in this way to curb the flight of advertising capital to the web giants? Maybe… But the rules of international trade have changed and those governing CUSMA (the Canada–United States–Mexico Agreement) are even more restrictive.
YET ANOTHER TAX
It is precisely these rules and this agreement that the web giants invoke to denounce the compensation required by the two laws mentioned above and, above all, the new 3% tax on digital services adopted on June 20. So that Canada is not accused of discrimination, Finance Minister Chrystia Freeland ensured that the new tax applies to all companies, foreign and Canadian, according to certain income thresholds.
The web giants took no time to step up and strongly denounce a tax that they consider arbitrary and contrary to free trade agreements. With Donald Trump in the White House, they will find a more than attentive ear to their recriminations, Jeff Bezos (Amazon) and especially Elon Musk (network X) having largely contributed to his victory.
We’re not out of the woods!
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