Letters March 27, 2024

Aligning Canada’s OECD tax framework with the United States

Goldy Hyder – President and Chief Executive Officer, Business Council of Canada

North America Taxation

Letter to the The Honourable Chrystia Freeland, P.C., M.P. Deputy Prime Minister and Minister of Finance regarding the OECD Global Tax Framework.

Deputy Prime Minister,

I am writing on behalf of the Business Council of Canada (BCC) to again urge you and the government to hold off implementing the proposed Organization of Economic Co-Operation and Development (OECD) two pillar global tax framework until such time as the United States has done so.

The BCC has long taken the position that if Canada unilaterally imposes a digital services tax, it will undermine our economic relationship with our most important trading partner. Imposing the global minimum tax (GMT) before the U.S. would threaten our comparative tax competitiveness.

While we recognize that other jurisdictions have variously implemented elements of the OECD two pillar tax framework, the Canadian situation in relation to the U.S. is unique given the highly integrated nature of our economies as enshrined and enabled by the Canada-U.S.-Mexico Agreement.

We therefore strongly urge you and the government to align Canada’s implementation of the OECD tax framework with the United States. This would ensure that Canadian trade and investment are in no way penalized. It would also be in keeping with the spirit of the agreement that all countries act in tandem.

Yours very truly,