Google announced that it will pass on the cost of the digital services tax imposed by the liberal government to advertisers.

The company stated that it will decide to impose an additional fee of 2.5% on ads displayed in Canada, starting in October.

A Google spokesperson said in a statement: “Digital services taxes are increasing; the additional fees aim to cover part of the costs associated with compliance with the tax imposed by the government.”

The 3% tax, which was approved in Parliament in June, will be applied to giant foreign technology companies generating revenue from Canadian users.

A trade group representing Canadian advertisers warned that other companies may follow Google's approach.

The digital services tax has faced opposition from trade associations and business groups in the United States, where many giant technology companies are based.

The Computer and Communications Industry Association, which represents major technology firms including Amazon, Apple, and Uber, previously urged the Biden administration to take formal action under the United States-Mexico-Canada Agreement.

The Information Technology Industry Council, which includes members like Google, Meta, Apple, and Amazon, called on the Biden administration to “immediately address the Canadian measure targeting American companies and attempting to protect the digital economy.”