A senior Google official said the company will collect taxes on its Canadian sales – if legally required.
Colin McKay, Google Canada’s Head of Public Policy and Government Relations, made the comments Thursday during an appearance before the Commons’ access to information, privacy and ethics committee.
“If the government takes the steps to make [sales tax] applicable to a company in our situation and other online businesses, then we will take the steps like we do in every other country, to collect it from our users who purchase things from us,” he said. “That’s up to the government to make that decision.”
A recent report by the Commons international trade committee called on the federal government to force multinational digital companies to collect and remit sales taxes. Currently, companies such as Netflix and Google do not charge sales tax in Canada because the services are based from outside of Canada.
The Canada Revenue Agency’s position is that foreign-based internet vendors with no physical presence in Canada are generally not required to collect sales tax.
Mr. McKay began his presentation to MPs Thursday by talking about the company’s presence in Canada.
“For a company that is just 20 years old, Google has some deep Canadian roots,” he said. He noted that the company has over 1,000 employees in Canada with more than 600 programmers and artificial-intelligence researchers in Montreal, Waterloo and Toronto.
NDP MP Charlie Angus took issue with those comments.
“You talk about deep Canadian roots. You certainly have deep Canadian roots. In my region, you compete against all our local newspapers for online advertising,” said the Timmins-James Bay, Ontario MP. “Would you consider deepening your roots by paying the HST so we have a level playing field?”
Mr. McKay responded that the company would collect sales tax if legally required.
Finance Minister Bill Morneau has said Canada is working with other OECD countries on a coordinated approach to the taxation of digital services. The Quebec government announced this year that it will act on its own by requiring foreign-based digital companies like Google and Netflix to start collecting sales taxes as of Jan. 1, 2019.
A Google spokesperson said Google LLC anticipates complying with the Quebec law and is taking steps to register with the provincial government for the purposes of collecting and remitting the Quebec Sales Tax.