Chrystia Freeland on Questions on the Order Paper

Mr. Speaker, Canada’s priority and preference have always been to take a multilateral approach to the tax challenges of digitalization. Canada continues to strongly support the two-pillar multilateral plan agreed to in 2021 and has been actively working with international partners to bring it into effect. In October 2021, the federal government agreed to pause the implementation of Canada’s digital services tax, which had been announced in 2020, until the end of 2023, in order to give time for negotiations on pillar one to conclude. Meanwhile, at least seven other countries, including Austria, France, India, Italy, Spain, Turkey and the United Kingdom, have continued to apply their own digital services taxes. Canada reaffirms its desire to see pillar one implemented and will continue to work with our international partners to bring the new multilateral system into effect as soon as a critical mass of countries is willing. Until that time, and in order to protect Canada’s national economic interest, the government intends to move ahead with its long-standing plan for legislation to enact a digital services tax in Canada and ensure that businesses pay their fair share of taxes and that Canada is not at a disadvantage relative to other countries. Current legislation in the House, Bill C 59, would allow the government to determine the entry into force date of the new digital services tax.