The Potential Risks of Canada’s Gamble on the Digital Services Tax by Peter Menzies

Commentary

Canada seems to be struggling to comprehend and regulate the internet.

It’s apparent from the negative reactions to the Online News Act, the Online Streaming Act, and the Digital Services Tax.

This month marks the first anniversary of Meta’s decision to stop allowing the sharing of news links in Canada, in response to the Online News Act. Meta estimated the value of news traffic it directed to publishers at $230 million annually and chose to exit the news business rather than comply with the law.

Initially, there were concerns about accessing information during emergencies without news links, but the internet, including Facebook, was able to provide necessary information. Politicians didn’t raise the issue when Jasper was evacuated this summer.

The government still believes that Meta can be compelled to comply with the Online News Act. However, sharing frame grabs of news stories is not a violation, as it doesn’t provide access to news sites.

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Posting frame grabs of news stories does not violate the act. The Canadian Radio-television and Telecommunications Commission (CRTC) is to leave user-generated content related to news alone, as per the Online Streaming Act.

The Digital Services Tax (DST) is another instance of unforeseen consequences. Canada imposed a 3.0 percent DST despite the potential repercussions, aiming for an extra $1.4 billion in annual revenue. Google has responded by announcing a fee increase for advertisers starting in October to offset the tax.

There’s a risk of trade sanctions from the US in response to the DST, potentially harming other Canadian sectors. The government’s decision-making has led to negative outcomes in the past, and the odds are not in its favor.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.