David George-Cosh

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Outgoing Bank of Canada senior deputy governor Carolyn Wilkins put global tech giants on notice during one of her final public appearances as a central banker on Thursday, stating they need to "contribute their fair share" to the countries in which they operate.

Wilkins highlighted increasing competition in the technology space as well as advancing antitrust policy, notably for global tech giants, although she didn't specify which companies.

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

Wilkins made the comments 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 good jobs and to 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 multinational companies like Netflix Inc., Apple Inc., Alphabet Inc.'s Google, and Amazon.com Inc.

The new tax plans have been welcomed by the Canadian media, especially newspaper publishers, who have bemoaned how companies like Google and Facebook Inc. 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 Dec. 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.

"Innovations in recent decades in advanced economies have also contributed to the rise of superstar firms with considerable market power," Wilkins said in a published copy of her remarks.

"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."