TORONTO Facebook and Instagram say they will charge goods and services tax on online advertisements purchased through their Canadian operations.
The U.S.-based social media networks say the taxes will be applied by mid-2019 as part of their recent move towards supporting local selling structures in countries it operates in.
The decision to charge the taxes could be create a windfall for the federal government, which has long faced pressure to force foreign online services to charge GST to consumers.
Prime Minister Justin Trudeau has been adamant the federal government won’t increase taxes on online services, but Canada and other G7 countries have set a 2020 deadline to develop an international tax plan to address companies that are based in one country but have the potential to pay taxes in another.
In April the federal government’s international trade committee called on Trudeau to make online services pay the taxes so small and medium-sized businesses don’t lose customers to larger firms based abroad.