#taxation

Canada is proceeding with its Digital Services Tax (DST), a 3% levy on revenue earned in Canada by large digital corporations, despite escalating threats of retaliatory tariffs from the United States. The U.S. government argues the tax unfairly targets American tech giants and is preparing potential countermeasures. The Canadian government defends the tax as a matter of fairness, ensuring that companies profiting from Canadian users contribute their fair share. This standoff places significant strain on Canada-U.S. trade relations and could have wide-ranging economic consequences for key Canadian export sectors if tariffs are imposed.

The Canadian federal government has announced a significant change to its tax policy, increasing the capital gains inclusion rate from one-half to two-thirds. This new rate will apply to annual gains exceeding $250,000 for individuals and to all capital gains for corporations and trusts, effective June 25, 2024. The government projects this will generate over $19 billion in revenue over five years, intended to fund housing and social programs. The move has drawn sharp criticism from business groups, doctors, and technology leaders, who warn it will stifle investment and innovation in Canada.