Google kills ad fee implemented in response to digital services tax

The Google logo is photographed at the Vivatech show in Paris, Thursday, June 15, 2023. The Canadian Press/AP, Michel Euler

OTTAWA — Google is eliminating a surcharge on ads it previously implemented in response to Ottawa’s now-defunct digital services tax.

A year ago, Google said it would put in place a 2.5 per cent surcharge for ads displayed in Canada in response to the tax, effective October 2024.

A Google spokesperson says the company has now stopped charging the fee, and will refund previously collected funds once the federal government officially repeals legislation that implemented the tax.

The digital services tax would have imposed a three per cent levy on tech giants that generate revenue from Canadian users.

But just before an initial retroactive payment was due June 30, Prime Minister Mark Carney’s government said it would eliminate the tax.

The move came after U.S. President Donald Trump put a halt on bilateral trade talks over the levy.

The tax would have applied to companies that operate online marketplaces, online advertising services and social media platforms, and those that earn revenue from some sales of user data.

The first retroactive payment would have left U.S. companies, such as Google, Amazon and Uber, on the hook for an estimated total bill of US$2 billion.

Anja Karadeglija, The Canadian Press