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7:30 a.m.
Biden appears unbothered by Canada’s 3% tax on U.S. tech giants, Trudeau says
Canada’s tax on Netflix Inc. and other foreign digital services companies may be a major irritant for the United States tech sector, but Prime Minister Justin Trudeau says it doesn’t seem to be much concern to President Joe Biden.
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In a year-end interview with The Canadian Press, Trudeau said “not once” did Biden indicate that the digital services tax, which is set to go into effect on Jan. 1, was a significant worry for the White House.
The prime minister said he was poised to defend the policy, which is widely opposed on Capitol Hill. David Cohen, the U.S. ambassador to Canada, warned in October about the risk of a “big fight” over the three per cent levy.
“I understand that Americans may not be very happy that we are going to do it, but we have promised to do it,” Trudeau said. He said he was prepared with “all sorts of responses” had Biden raised the upcoming tax.
The measure is aimed at ensuring foreign tech giants that are generating revenue from Canadian users are required to pay taxes on that revenue in Canada. The bulk of those companies are based in the U.S.
“I think that, in all the conversations we had with the Americans, not once did President Biden raise that as a priority, a concern, directly with me.”
Emilie Bergeron, The Canadian Press
Read the full story here.
Stock markets before the opening bell
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Treasury yields and the United States dollar fell, while U.S. stock futures posted small moves before a crucial inflation report.
Equity traders were reluctant to make big bets ahead of this week’s heavy load of economic data and interest-rate decisions, with contracts on the S&P 500 and Nasdaq 100 keeping to narrow ranges.
Tuesday’s consumer price index will give Wall Street a sense of whether the disinflation trend is continuing, a day before the last scheduled United States Federal Reserve decision of 2023. The U.S. central bank is widely expected to hold rates, with most market focus on whether it will try to temper policy easing expectations after investors’ aggressive dovish repricing.
The S&P/TSX composite index closed down 13.18 points at 20,318.36 on Monday.
Bloomberg
What to watch today
We’ll get an updated look at inflation in the United States with the release of the consumer price index for November at 8:30 a.m. ET.
Expect earnings reports from Transcontinental Inc., Reitmans Canada Ltd. and DavidsTea Inc.
The Economic Club of Canada hosts an armchair discussion on the topic of “Examining Canada’s Current Economic Landscape.” Frances Donald, global chief economist at Manulife Investment Management; John Manley, former federal finance minister; and Stephen Poloz, former Bank of Canada governor, will participate.
Need a refresher on yesterday’s top headlines? Get caught up here.
Additional reporting by The Canadian Press, Associated Press and Bloomberg
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