Online shopping: the consequences are “catastrophic” if Ottawa bends to the giants of the web

Photo AFP
The prime minister of Canada Justin Trudeau

Maxime Huard and
Christopher Nardi

Thursday, 8 February 2018 21:02

UPDATE
Thursday, 8 February 2018 21:02

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OTTAWA – just before meeting the CEO of the web giants Amazon and eBay, Thursday, Justin Trudeau refused to commit to maintaining $ 20 in the threshold for exemption from taxes on international purchases online. If Canada bends over this issue, a number of stakeholders fear catastrophic consequences.

“If the Trudeau government goes ahead with this request of the american companies, there will be layoffs in the retail sector, while depriving the federal government of $ 1.5 billion of revenue per year,” sorry Jacques Nantel, professor emeritus of the department of marketing at HEC Montréal.

At this time, a Canadian who buys a property in a foreign country on the web and paying taxes if the purchase costs more than $ 20. For an American, this limit is set at 800 $.

In the context of the renegotiations of the free trade Agreement north american (NAFTA), the United States wish that Canada adjusts its threshold to be higher, to encourage canadian consumers to buy more south of the border.

The second day of his mission in the United States on Thursday, the prime minister of Canada was assured that it would defend the interests of Canadians and SMES, but no guarantees. “We will not negotiate on the public square”, a-t-il dropped at a press conference in San Francisco.

Dangerous for canadian commerce

“We’re going to close a lot of business if we set up the limit to $ 800, or even 200 $. It would be completely catastrophic,” says Léopold Turgeon, president and executive director of the Conseil québécois du commerce de détail (CQCD).

The opposition mps have urged Ottawa to not give in to the Americans and to the american giants of the web in this folder.

“I can see it in my constituency. In the centre of the city of Joliette, the businesses of the misery to survive. Canada should never bend, because it’s going to kill all our businesses,” argued the mp bloquiste Gabriel Ste-Marie.

For the New democratic Party, the Trudeau government was preparing to swallow a “poison pill” if it considers that to abolish the limit of $20.

“Already, our businesses are competing with giants who don’t pay the GST or income taxes in Canada, and now he would have to that there is a threshold to $ 800 to pay any customs? It is very dangerous”, warned the mp for Sherbrooke Pierre-Luc Dusseault.

Us pressure

Despite the concerns, it will be very difficult for the federal government, which stubbornly refuses to tax companies such as Netflix, not to access the us applications, observes the expert Jacques Nantel. “It is part of the mentality of the present government”, he commented.

The retailer eBay is one of the most ardent supporters of the increase in the minimum threshold in Canada. The company said by email that the limit of $ 20 exemption is “outdated” and that it is a burden to canadian taxpayers.

Before you meet with the chief executive officer of eBay Devin Wenig, the prime minister should also sit down with Jeff Bezos, boss of Amazon, to discuss the construction of the second headquarters of the firm. On 20 localities in north america, Toronto is the only canadian city still in contention to host the project is evaluated at $5 billion.

Cape town to Los Angeles

During the day, Justin Trudeau has also met with the leaders of AppDirect and Salesforce. The latter announced that it would invest $ 2 billion in Canada over the next five years, by building a data center.

The platform of online trade AppDirect has announced the creation of 300 jobs across Canada in the coming years, with a new sales office in Toronto and the expansion of its activities in Calgary and Montreal.

Justin Trudeau will head to Los Angeles Friday, the last stop of his four-day trip. He had met, on Wednesday in Chicago, mayor Rahm Emanuel and Illinois governor, Bruce Rauner.