Economy

Canada still plans digital services tax; Google disappointed

Published

3 years ago

December 14, 2021

Canada is still prepared to impose a tax on corporations providing digital services if need be, the finance ministry said on Tuesday in an announcement set to irritate the United States.

Canada unveiled the proposed measure in the April budget, saying it would stay in place until major nations come up with a coordinated approach on taxing digital giants such as Alphabet Inc’s Google and Facebook Inc.

The Organisation for Economic Cooperation and Development (OECD) has since agreed a common approach to ensure such firms pay their share of taxes, but a treaty to enforce this has yet to be implemented.

In a fiscal update, the finance ministry said the new tax would be imposed Jan. 1, 2024 if the international treaty had not come into force. In that event, the tax would be payable on revenues earned as of Jan. 1, 2022.

“It is the government’s sincere hope that the timely implementation of the new international system will make this unnecessary,” the update said.

Google expressed its disappointment. A move by Canada to impose a tax “would undermine the multilateral consensus and raise prices for Canadians. We hope it will reconsider,” said spokesman Jose Castaneda.

Washington strongly opposes the idea. U.S. Trade Representative Katherine Tai urged her Canadian counterpart in July to drop the proposal.

“In a period of increasing trade tensions, this is another poke in the eye towards the United States,” said Mark Agnew of the Canadian Chamber of Commerce said by email.

Canada last week threatened to impose tariffs on a range of American goods unless U.S. legislators vote down a plan to offer tax credits on American-made electric vehicles.

(Additional reporting by Dave Paresh in San Francisco; Editing by Cynthia Osterman)

Economy

PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

Published

2 days ago

October 17, 2024

Anne Joseph

OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.

However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.

The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.

Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.

The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.

The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.

This report by The Canadian Press was first published Oct. 17, 2024.

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Economy

Statistics Canada says levels of food insecurity rose in 2022

Published

3 days ago

October 16, 2024

Anne Joseph

OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.

In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.

The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.

Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.

In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.

It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.

This report by The Canadian Press was first published Oct 16, 2024.

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Economy

Statistics Canada says manufacturing sales fell 1.3% to $69.4B in August

Published

3 days ago

October 16, 2024

Anne Joseph

OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.

The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.

The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.

Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.

Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.

Overall manufacturing sales in constant dollars fell 0.8 per cent in August.

This report by The Canadian Press was first published Oct. 16, 2024.

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