Google Drops DST Fee in Canada, Will Refund Advertisers
In a major move for Canadian advertisers and the online advertising industry, Google has stopped applying the digital services tax (DST) surcharge on ads served in Canada. The decision follows the federal government’s cancellation of the controversial tax, offering long-awaited financial relief to digital advertisers across the country.
Google Confirms Refunds After Federal Repeal
Google had introduced the 2.5% DST fee in October 2024, anticipating that it would be responsible for paying the newly legislated tax. But with the government reversing course, the tech giant announced on Friday that it has removed the surcharge as of July 1.
“We are no longer charging a DST Fee on ads served in Canada and will refund any previously collected fees once the legislation has been officially repealed,” said Google spokesperson Shay Purdy.
Though refunds will begin only after Parliament formally rescinds the Digital Services Tax Act, advertisers can expect to see the surcharge removed from their July invoices.
DST Repeal: A Result of Trade Pressure
The digital services tax, introduced in 2022 and set at 3%, was retroactive and projected to bring in nearly US$2 billion. Companies like Amazon, Meta, Airbnb, and Uber, along with Google parent Alphabet, were among those affected.
However, mounting international pressure—particularly from U.S. President Donald Trump—forced Canada’s hand. Threats of retaliatory tariffs and a breakdown in trade negotiations prompted Prime Minister Mark Carney to scrap the DST just one day before payments were due.
Industry Response: Applause and Caution
Industry experts welcomed Google’s swift action. Sonia Carreno, President of the Interactive Advertising Bureau of Canada, said the move reflects a responsible step toward restoring balance in the digital ad ecosystem.
“This tax caused significant administrative disruption across the online advertising sector,” she said. “It’s evident that impacted platforms are now beginning the complex task of reversing pass-through costs.”
However, she noted that formal legislation is still required to assure businesses that the DST won’t be reinstated in future cycles.
Amazon Yet to Follow Google’s Lead
While Google has dropped its DST fee, Amazon has taken a more cautious stance. The company stated that it will continue its billing practices until the Canadian government officially repeals the legislation.
“While the government announced it would rescind its digital services tax, it has yet to do so,” said Julia Lawless, spokesperson for Amazon. “Our billing and operations in Canada will continue as normal.”
Relief for Small Businesses
For small businesses, the surcharge lift could not come at a better time. With rising costs across taxes, rent, and insurance, every saved dollar matters. Jasmin Guénette, Vice-President of National Affairs at the Canadian Federation of Independent Business, emphasized that ad platforms play a crucial role in small business survival.
“It’s the right decision for large corporations to stop surcharging the DST—a tax that no longer exists,” he said. “We expect all major firms to follow suit immediately.”
What Comes Next?
While Google’s move marks a major shift in Canada’s digital advertising space, businesses will still need to wait until fall when Parliament resumes to see the DST officially repealed. Until then, advertisers should monitor invoices and platform communications for updates on refund timelines.
Stay tuned to Maple Wire for the latest on digital policy and business news.
