Moving on to competition policy, we remain concerned by the ad hoc approach to changes to the Competition Act and we encourage the government to carefully review our submission and continue to consult with the business community, including the U.S. Chamber of Commerce, on changes to the act.

In particular, there are concerns around overwhelming the Competition Tribunal with frivolous claims, and there has been a lot of talk about structural presumptions in merger reviews pointing to misguided interpretations of U.S. merger guidelines as inspiration. These issues, among others, have the potential to make Canada’s competition regime less effective, rather than improving it.

That brings us to new corporate taxes and the digital services tax. The irony is that just as we’re contemplating ITCs and refinements to our competition regime to spur private sector investment, innovation and growth, a range of new and potential business taxes threaten to repel investment, create uncertainty and discourage new players from entering the Canadian marketplace.

Specifically, we call on the government to avoid imposing new taxes on the business sector, which Bill C-59 proposes to do with a digital services tax. A DST is particularly concerning, as it includes a retroactive tax to 2022 on online services that Canadians have come to rely on, even though over 120 countries, including our largest trading partner, the U.S., have agreed to delay imposing such taxes. The DST is the latest proposed tax that violates several critical tax principles of providing clarity, certainty and stability for businesses and help ensure Canada remains a competitive environment for investment.

First, we strongly object to the concept of tax retroactivity, which has been a concern in the latest proposals regarding both the DST and EIFEL. The effective date of proposed taxes should be during the following tax year or, at a minimum, upon proclamation. Retroactivity robs businesses of the certainty they need to make productive investments in innovation and growth, and it has a chilling effect on future investment across the economy.

Second, we oppose any measure that will increase costs for businesses and Canadians when both are facing challenging economic headwinds.

This new tax will affect far more than just large multinational corporations; if enacted, the DST will ripple across the Canadian economy, affecting many small and medium-sized businesses and hurting Canadians. In fact, this tax will disproportionately impact businesses with low profit margins, because unlike corporate income taxes, digital services taxes are levied on revenues rather than profits. As a result, there is a disproportionate tax burden being placed on companies with low profit margins, such as the online travel sector.

Third, and finally, we must sound the alarm that successive administrations in Washington have signalled that enacting a DST could provoke damaging trade retaliation, potentially against key sectors of the Canadian economy. We are hearing directly from business owners in many sectors beyond the digital services space who are concerned that their products may be impacted by retaliatory tariffs.

At a very minimum, we call for the punitive and retroactive application of the DST to be cancelled and for the introduction of a safe harbour for low-margin businesses similar to the OECD's amount “A” of pillar one, in which there is a safe harbour provision.

Bill C-59 and the forthcoming 2025 budget present an opportunity for decisive action. We urge Ottawa to adopt pro-growth policies that will invigorate Canada’s economy, instead of regressive taxes—

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