Bank of Canada Deputy Calls Out Big Tech

Outgoing Bank of Canada Senior Deputy Governor Carolyn Wilkins has taken a parting shot at technology companies.

Wilkins put global tech giants on notice during one of her final public appearances as a central bank official, saying they need to “contribute their fair share” to the countries where they operate. Wilkins also noted that there is increasing competition in the global technology space and growing antitrust sentiment among governments around the world, although she didn’t specify which technology companies she was referring to in her remarks.

“The reforms to international tax policies led by the Organization for Economic Co-operation and Development and G20 are needed so that globally active digital companies contribute their fair share,” Wilkins said.

The comments were made during a virtual speech at The University of Toronto’s Munk School of Global Affairs and Public Policy where she highlighted how much the pandemic has damaged Canada’s ability to generate sustainable activity, create jobs and make high debt loads more manageable.

Taxing tech giants has recently emerged as a key policy issue in Ottawa amid efforts to establish some sort of regulatory framework to ensure more controlled data collection and digital advertising. The framework was included in the Liberal government’s 2019 election platform, which singled out the domestic tax contributions of multi-national companies such as Netflix (NASDAQ:NFLX), Apple (NASDAQ:AAPL), Alphabet’s Google (NASDAQ:GOOGL) and Amazon.com (NASDAQ:AMZN).

The new tax plans have been welcomed by the Canadian media, especially newspaper publishers, who have bemoaned how companies such as Google and Facebook (NASDAQ:FB) have taken the lion’s share of digital advertising revenue in the country but fail to pay outlets for their copyrighted content.

Wilkins, whose last day at the Bank of Canada is on December 9, said policymakers should recognize that social and economic goals should work together, not conflict with one another. She offered several examples, including the technology space, where innovations can sometimes come at a steep cost to the livelihoods of the sector’s workers.

“The modern winner-takes-all effect is magnified because user data have become a new source of monopoly power … It may mean that a handful of firms now account for an outsized share of the jobs in a given industry or town, leaving many other workers with less bargaining power and stagnant wages,” she said.