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Unfortunately, this decision by the Canadian government is a major step backwards in holding U.S. big-tech firms accountable. Let me explain why.

The Digital Services Tax itself was a 3 per cent tax on the revenues of digital services firms — including U.S. big tech firms, such as Alphabet, Amazon, and Meta — which collect, store and analyze the data of Canadians for the success of their business models, whether online advertising, eCommerce, social media, or otherwise.

The data included personal information, user engagement, and content contributions. So, when we’re forced to hand over our data to access a service, the Digital Services Tax was meant to come into play.

, I am interested in the value of digital data, especially our personal data. It’s incredibly difficult to reach consensus on how to measure data’s value or even agree on what we mean by the term “data.”

For example, we might be able to measure data’s value in terms of the future benefits it brings as a resource; unfortunately, this is difficult to do within the prevailing regulatory environment because firms don’t have to record the data they collect on their balance sheets. There is lack of transparency and accountability that is actually quite beneficial for both digital services firms and the countries in which they are headquartered.

Some clarity may be coming to these discussions, however. In March 2025, a range of international policymakers, including the UN, OECD, World Bank, IMF, and European Commission, revised national accounting standards, called the System of National Accounts, which define data as an asset in GDP calculations. These standards are going to take time to rollout around the world but will change the way we understand data, especially as an important national resource.

Thinking about data as an asset changes the complexion of the trade debate quite radically. Here’s why.

With colleagues, I’ve tried to calculate the value of our personal data to Alphabet/Google. We started by looking at how Google frames data in their annual reports and earnings calls. Although data is rarely mentioned, something else comes up a lot: “traffic acquisition costs,� or TAC.

To understand the value of data to Alphabet, we have to understand TAC. It represents the cost of attracting users to their 50-plus products and services that form the basis of their online advertising ecosystem. Once we’re in that ecosystem, Alphabet generates ad revenues from us.

These revenues are so significant that Alphabet is willing to pay billions of dollars to smartphone manufacturers to set Google Search as the default search engine, including an estimated $20 to 24 billion (all figures are in Canadian dollars) Alphabet pays Apple each year.

Using these TAC numbers, it’s then possible to calculate the value of our personal data to Alphabet at around $90 per Canadian per year in 2021; the total value of our data is around $100 once you factor in the 22 per cent TAC rate that Alphabet pays. Extrapolating to the Canadian population at large, this comes in at around $4.6 billion worth of our data flowing from Canada to Alphabet each year.

Now, if we conceptualize data as an asset, then it quickly becomes clear why the Digital Services Tax makes a lot of sense. Treating data as an asset means we need to add a multiplier to those annual numbers to reflect the value of the future returns that those data assets generate.

Conservatively, we could use an eightfold multiplier to get a better sense of the value flowing to Alphabet each year. This comes out as a whopping $37 billion worth of Canadian data assets going to one U.S. big -tech firm each year. And that’s just one firm.

If we added these numbers to the trade debate, it starts to look very different; we’re handing over billions in data assets each year to U.S. firms and receiving zero returns for it. That’s why we need a Digital Services Tax, or its equivalent.