Starting October 1, 2024, Google will introduce a new surcharge for ads served in Canada. The “Canada DST Fee” is being implemented in response to Canada’s digital services tax (DST) legislation. This new fee will affect advertisers that use Google Ads and YouTube placements on a reservation basis.
Key Details Of The Canada DST Fee
1. What Is The Canada DST Fee?
- The Canada DST Fee is a surcharge of 2.5% that will be added to your invoices or statements for ads served in Canada. This fee is designed to offset the costs associated with complying with Canada’s digital services tax legislation.
2. How Will It Appear On Your Invoice?
- The surcharge will be displayed as a separate line item under “Canada” on your invoice or statement. It will also be visible in the “Transactions” section of your Google Ads account. This transparency ensures that you can clearly see the additional costs associated with serving ads in Canada.
3. Impact On Ad Budgets & Payments
- For Advertisers Using Automatic Or Monthly Invoicing:
- The 2.5% surcharge will be added on top of your existing budget. For example, if your budget is $100 and you accrue a $2.50 Canada DST Fee, your total bill will be $102.50, excluding any additional taxes such as sales tax, VAT, GST, or QST.
- For Advertisers Using Manual Payments:
- The surcharge will be applied after your payment has been fully spent. This could leave you with an open balance that will be automatically deducted from your next prepayment. For instance, if you have a $100 payment and accrue a $2.50 DST Fee, your available balance for ads would be $97.50.
4. YouTube Placements On Reservation Basis
- Similar to Google Ads, YouTube placements purchased on a reservation basis will also incur the 2.5% Canada DST Fee. This surcharge will be added to your media plan’s budget and appear as a separate line item on your invoice. For example, a $100 media plan budget with a $2.50 DST Fee will result in a total bill of $102.50, excluding any applicable taxes.
5. Taxes & The Canada DST Fee
- It’s important to note that the Canada DST Fee is subject to any applicable taxes, such as sales tax, VAT, GST, or QST. These taxes will be applied in addition to the DST Fee, meaning that the overall cost of advertising in Canada will be slightly higher than before.
What This Means For Advertisers
Advertisers targeting Canadian audiences should be aware of these upcoming changes and adjust their budgets accordingly. The introduction of the Canada DST Fee may require you to re-evaluate your advertising strategies, particularly if you have a tight budget or are running campaigns on a large scale.
It’s crucial to plan for this additional cost to ensure your campaigns continue to run smoothly without interruption. If your budget is not adjusted to account for the surcharge, you may find yourself with an unexpected shortfall or open balance.
For those paying manually, keeping a close eye on your account balance will be essential to avoid any disruptions in your ad delivery. Additionally, it may be wise to consider increasing your prepayments to accommodate the DST Fee.
Final Thoughts
The new Canada DST Fee is a significant change for advertisers serving ads in Canada. While the surcharge is relatively small at 2.5%, it’s an added cost that all advertisers need to factor into their budgeting and planning processes. Stay informed about these changes and make the necessary adjustments to your advertising strategy to ensure continued success in the Canadian market.
For more detailed information on these surcharges and how they might affect your ad campaigns, visit Google’s official support page or consult with your Google Ads account manager.
Jacob Kettner is the owner and CEO of First Rank Inc., a digital marketing agency based in Winnipeg, Manitoba. He currently sits on Manitoba Chamber of Commerce Small Business Advisor Council which assists people grow their small businesses in Manitoba.
