‘Data is the new oil’: Feds plan to tax tech giants on Canadian user data, ad buys

TORONTO —
The federal government plans to tax tech and internet giants on their data collection and ad buys in a bid to establish some sort of regulatory framework, according to Canadian Heritage Minister Steven Guilbeault, a move privacy experts say will see the feds profit off of privacy abuses.

Guilbeault says the Liberals are building on their 2019 re-election promise to tax multinational tech giants on their revenue generated in Canada by imposing two other taxes: one on the use of data, and the other on ad buys.

“They say data is the new oil,” Guilbeault said during an interview with CTV’s Evan Solomon Thursday.

“I’m a jogger, so I’ll go and look for a pair of jogging shoes on the website of a company, and then I come on my Facebook page and all of a sudden there’s a whole bunch of publicities about jogging shoes.

Why is that? Well, because Facebook sold information to companies, without my permission… they’re making a profit out of it, out of our personal information. We think that there needs to be some fiscal framework put around that, because right now there’s none.”

A major aspect of the Liberals’ costed 2019 platform, released last September, was billed as “making multinational tech giants pay their fair share,” including a three-per-cent tax on the income of businesses in the digital economy sector. It targets advertising and digital companies like Netflix, Apple, Google or Amazon, with worldwide revenues of at least $1 billion and Canadian revenues of more than $40 million.

The Liberals also promised to impose new privacy measures on these companies, including measures like a new set of online rights for people to be able to erase their data from platforms.

But privacy experts Michael Geist says this proposed data and ad buy tax runs directly counter to what the government promised in the platform in regards to privacy protections for Canadians.

“There are real issues with respect to privacy and the collection of our personal information. I don’t think the solution is to give the government the cut of the revenue that comes out of that,” Geist, research chair in internet and e-commerce law at the University of Ottawa, told CTVNews.ca by phone.

“I don’t think the government should be profiting out of privacy abuse, I think it should be working to crack down on it.”

Geist says that while there is a great deal of support to say that large technology companies should pay their fair share of tax on revenues that they earn in Canada, he says taxing companies on privacy abuses is a “misguided approach.”

The notion that the government wants to profit from misuse of privacy instead of trying to stop it, I think actually runs directly counter to what the government did promise in the platform,” he said.

“I don’t think this is rocket science at this point, we’ve been debating issues around stronger privacy protections and safeguards for many years. And in fact several Canadian provinces have moved ahead with proposed privacy reforms either in consultation, or in the case of Quebec, proposed legislation [a bill].

The federal government is now following instead of leading in terms of privacy.”

– With files from CTV News’ Rachel Gilmore 

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Nicole Bogart