PM urged to back off digital tax before White House hemispheric trade summit Friday | CityNews Calgary

Business leaders are seizing on Prime Minister Justin Trudeau’s journey to Washington on Friday to induce him to delay a controversial tax aimed toward international tech corporations that cater to Canadian audiences.

The digital companies tax, which takes impact in January, is deeply unpopular with Canada’s most essential ally and buying and selling accomplice, says Goldy Hyder, president and CEO of the Business Council of Canada.

And these tensions are mounting at a time of rising worldwide instability, when the nation’s relationship with like-minded allies such because the U.S. must be a prime precedence, Hyder writes in a brand new letter to the prime minister.

Instead, Canada ought to conform to U.S. calls for that the tax be held in abeyance till a world taxation framework being developed inside the Organization for Economic Co-operation and Development may be launched.

“Canada’s economic interests will be severely harmed if Canada continues to defy the overwhelming OECD consensus,” Hyder writes within the letter, a replica of which was offered to The Canadian Press.

“Amid growing economic uncertainty around the globe, Canada cannot afford a costly trade war with our most important trading partner.”

On Tuesday, U.S. Ambassador to Canada David Cohen warned {that a} severe commerce dispute may very well be brewing if the 2 international locations can’t come to an understanding earlier than the tax kicks in early subsequent 12 months.

“That will be an area of contention unless it is resolved,” Cohen advised viewers members after a luncheon speech on the Canadian Club in Ottawa. “There’s a place where we’re either going to have to have agreement, or we’re going to have a big fight.”

U.S. lawmakers, together with dozens on the influential House Ways and Means committee, have already warned of “significant consequences” for Canada below current commerce agreements if the plan is allowed to go forward.

Many on Capitol Hill see a unilateral tax as discriminatory in opposition to the U.S., the place the overwhelming majority of focused digital companies corporations are based mostly, in addition to a possible violation of the U.S.-Mexico-Canada Agreement.

Finance Minister Chrystia Freeland mentioned Tuesday she’s “cautiously optimistic” {that a} answer may be discovered earlier than the tip of the 12 months.

In his letter, Hyder additionally famous that Cohen likened Canada’s place to that of “outlier countries” like Russia and Belarus. “This is inexplicable at a time when Canada is trying to strengthen ties with continental partners in the Americas and allies around the world.”

That’s exactly what Trudeau is doing Friday in D.C., the place he’ll attend a White House summit that brings collectively the leaders of nations participating within the Americas Partnership for Economic Prosperity.

That’s what President Joe Biden’s administration calls its hemispheric commerce framework, an effort to move off migratory challenges by fostering financial progress and commerce within the Americas.

The Prime Minister’s Office mentioned Thursday that leaders may even focus on attracting what it calls “responsible and sustainable investments” to strengthen provide chains.

The partnership, often known as APEP, contains 12 international locations, together with Mexico, Chile, Barbados, Colombia, Costa Rica, Ecuador, Panama, Peru, Uruguay and the Dominican Republic.

It’s not clear whether or not Biden and Trudeau could have the chance to satisfy one-on-one on the margins of the half-day summit. Biden had separate bilateral conferences on Thursday with the leaders of the Dominican Republic and Chile.

“There is no better time to work together toward achieving a prosperous, strong and resilient future for our hemisphere,” Trudeau mentioned in an announcement.

“I look forward to working with APEP leaders … to advance important issues such as sustainable economic growth, climate adaptation and mitigation, and expand trade and investment ties in the region.”

This report by The Canadian Press was first printed Nov. 2, 2023.

James McCarten, The Canadian Press