I will focus on the eCommerce part of this tax, because I find it does not make sense, despite what Peter Simons said last year at the Hop! salon of the CQCD.

First, you have to know about this statistic:

3 out of 4 dollars spent on the Internet by Quebecers is spent outside Quebec. It’s like this for two reasons:

The first reason: There’s no offer.

Try to get a spare part for your washer-dryer on the internet from a Quebec dealer, a replacement remote control for your television. Currently in Quebec and even in Canada, there are not enough traders who sell on the Internet. This is the first reason why we are forced to buy outside Québec on the Internet.

Second reason: It’s too expensive!

That’s what I’m going to focus on. Why is it too expensive? 2 reasons: GST-QST, you must pay 15% more than if you buy on an American site in addition of the shipping. As for the shipping, it costs 3-4 times more to ship a small parcel from Montreal to Quebec City than it is from Champlain, New York just across the border to Quebec City. Then, necessarily the Quebecers pays more if they buy local.

If there are more taxes that are charged to Amazon, one of the two following things will happen:

1. Amazon will continue to sell to Quebecers and Quebec consumers will pay more. If that’s what it is, what’s going to happen? Quebec retailers will continue to close because people are buying more and more on the Internet.
2. Amazon will not want to pay this tax and will prefer to withdraw from Canada. What’s going to happen? Quebec consumers will no longer have an offer because everything that isn’t offered on the on a Quebec website, the Quebec consumer will not be able to buy it overnight, of course . Will they actually go back to the traditional shops? I doubt it!

It’s fair to say, I think, it’s going to make the situation worse in Quebec.

An audacious proposal?

If, on the contrary, the taxes were removed on all Internet transactions in Quebec. This means that Peter Simons, who sells a dress to a Quebecer on the Internet, would no longer be charge GST / QST taxes. In his store, he continues to charge them, but on the internet no. What will it do?

First, there are more and more Quebec retailers that will sell on the internet because clearly, they will be more competitive level price. So they’re going to sell on the internet, necessarily.

And there are more Quebecers who will buy in local on the Internet!

There will be more offer, they will pay less or equal price with American sites so they will buy more on the local website.

Basically, at the same price, why buy on an American site when you can buy it here?

It’s just that right now, it’s impossible to do.

And then you will see my comparison:
I compare this to the Anti-Spam C28 Act that came out 3 years ago. That is completely ridiculous. The government is strictly looking at their treasury. The Anti-Spam Act currently prevents Quebec and Canadian merchants from using email marketing.

On the other hand, the foreign companies (yes there are partnerships with some countries) benefit from it. I receive daily SPAM from companies in India, China, Russia and elsewhere in the world. Currently, this legislation has placed our Quebec companies at a disadvantage.

The result: if there’s a Google Tax, I am convinced that it will disadvantage Quebec companies.

If there’s a Google Tax, it’s going to inflate the government’s short-term revenues because they’re going to get more revenue. But it will melt the sales of Quebec stores that provide employment.
So in the end, are we really going to earn money?
I don’t think so.

And will companies here benefit from that? I am convinced otherwise.

Do you seriously think that Amazon will want to pay a tax on their income?

The article says the government would rely on credit card transactions.
The reality is that if we spend $ 100 on Amazon, Amazon only keeps 10% and gives $ 90 to the merchant who is behind, who sold it via their platform.

Do you really trust Revenu Québec to be able to come into this process of convincing big American companies to pay more taxes here in Quebec?

What is your opinion? Leave it in the comments!

The post The Google Tax: good or bad idea? appeared first on Mr eCommerce.

The Government of Canada and Quebec, in addition to not supporting Quebec’s electronic commerce, seem to be encouraging US e-commerce.

You’ll see by the numbers 

First, there was Peter Simons last year who made a public outing at the Hop Salon! of the CQCD by saying that it was less profitable to do business in Quebec, but that doing business online was even less profitable because it was necessary to charge the GST-QST to consumers.

I have the impression that the small 15% of GST-QST does not change much, mainly because we see the GST-QST returned to the shopping cart, at the end, when the credit card is presented. I feel that the problem comes from elsewhere and you will see with the numbers that I will give you that it is still ridiculous.

So I asked my client who, by the way is a medium-sized merchant. It’s not someone who ships 3 parcels a day, it’s someone who ships a few hundred parcels a month. A merchant who lives well on the internet, and who does great online business.

I asked him: give me the shipping price for a pair of sunglasses. A pair of sunglasses is about the size of a smart phone once it’s packed. It’s still relatively small. He tells me that 80% of the parcels bought on the Internet come in the format and the weight of a pair of  sunglasses.

What is the weight? It was approximately 100-113g that we calculated to make our shipping submissions.

You’ll see, it just does not make sense …

I asked him: Do it as if you were sending a pair of  sunglasses to Sainte-Brigitte de Laval, this is the village where I was born on the northern edge of Quebec. The postal code is G0A 3K0. Because there is a 0 to the 2nd character it is considered rural but I can assure you that today it is not as rural as when I was born.

So I said, Ok, you’re in Montreal. Make it as if you wanted to send a pair of sunglasses to Sainte-Brigitte de Laval.

So from Montreal to Sainte-Brigitte de Laval, Canada Post charges $ 14.74 Canadian to ship a pair of sunglasses from Montreal to Sainte-Brigitte. It is about 25min north of Quebec City.

I asked him: Let’s say you took your car and crossed the US customs to ship your package, how much would it cost? So I made the $ US $ CAD conversion. It would cost $ 3.17 Canadian to ship the same pair of sunglasses from US Customs to Sainte-Brigitte from Laval to Quebec City.

It makes no sense.

3.17 $ from the USA and 14.74 $ from Montreal!

It’s 3-4 times more expensive to ship the same pair of sunglasses.

It’s already hard for Canadian merchants, how do you expect them to compete with a low rates like that. Then necessarily they have to raise their price by $ 11. Clearly because the shipping will cost $ 11 more.

$ 11 for a pair of glasses that can be worth 20, 100 is still a major difference.

Do you want to know the best?

With this $ 3- 4 shipping fee: what’s going on? It’s Canada Post who carries the package anyway!
It’s Canada Post that carries the parcel! That’s the biggest aberration!

The pair of smoked glasses that will cost $ 14 to ship from Montreal to Quebec … it is Canada Post who will pick it up from the merchant and will take it to the customer in Quebec.
The same pair of smoked glasses that will cost US $ 3 in Quebec City, USPS takes the pair of glasses at the merchant, Canada Post picks it up and transports it to the customer in Quebec City!

You see? It is the same route, it is Canada Post that will charge 3-4 times more to our Quebec merchants!

That’s the aberration in the end because it’s the same company, it’s the same mileage …

Another example: Canada-Europe

Let’s say that our Canadian merchants in Quebec wanted to ship the same pair of sunglasses to Europe. Exporting is good for the economy.

If they were shipping the same pair of glasses in Europe, it would cost $ 40.59 with Canada Post from Montreal, meanwhile if they take their car to go to US Customs to ship from the US, we are talking about 7,60$ Canadian.

So $ 7 from the US, $ 40 if it’s from Canada.

I mean, it’s impossible: how do you expect our eCommerce from to do business in Europe
It’s expensive! It’s a huge barrier …

We’re talking about $ 33 more shipping. $ 33 on an 100$ item. it’s 33% more expensive. Besides, there is the GST / QST in all of this and a tax system, but we are not supposed to charge taxes to customers outside Quebec outside of Canada.

Example: Ship to Japan

Let’s say you want to ship to the rest of the world. In Japan, the same pair of smoked glasses will cost CAD $ 8.43 shipped from the US, $ 43.63 shipped from Canada. I don’t know if you realize the difference, we’re talking about a $ 35 difference.

The result?

Well, in Quebec it makes it very difficult, if not impossible to sell online.

You can ship your merchandise to the United States and return it to your customers in Canada. You are going to be able to have similar rates that are roughly 66% cheaper.

But nonetheless, for a small merchant who launches his online shop … I do not understand how governments think they will survive, but with rates like that, it’s impossible!

Support Please?

Somewhere else the Government or Canada Post will decide to help our traders here.

You may know the statistics: $ 3/4 spent by Quebecers online is sent out of Quebec. $ 3 out of 4. That means there’s only one dollar left here.

But think about it: why would a Quebecer buy on the internet at a Quebec dealer when it’s going to cost $ 3 if he buys from a US merchant in difference of $ 14 if he buys at a Quebec dealer? It makes no sense!

The solution?

Do business with US consolidators or with Quebec companies that have offices in the US and can ship your merchandise from the US to Quebec consumers. This is the only solution, if not, we are just not in the “game” in Quebec. We can not be in the “game” with shipping rates like this!

The post Why is Quebec e-commerce at a disadvantage appeared first on Mr eCommerce.