Policy Forum: Digital Asset Mining and GST—Tax Policy Versus Public Policy
Bibliographic record
Abstract
On February 4, 2022, the Department of Finance released draft legislation that, if enacted, would deem digital asset mining activities undertaken in Canada not to be "commercial activities" for goods and services tax (GST)/harmonized sales tax (HST) purposes. In 1991, Canada introduced the GST to remove sales tax as a cost of doing business in Canada with a view to making Canada's domestically produced goods and services more competitive in international markets. Yet 30 years later, Finance is proposing legislation hidden in the "special cases" provisions of the GST legislation that will make the 5 percent to 15 percent GST/HST an input cost to Canadian digital asset miners selling their computing services to non-residents of Canada. Further, it appears that Finance is doing so with an ulterior public policy objective—to impose financial market regulation and "know-your-client" rules on mining operators. This article provides an overview of how proof-of-work cryptocurrency blockchains operate, the parties involved, how GST would normally apply to the sector and to Canadian participants in particular, and why the proposed February 4, 2022 amendments are problematic from a tax policy perspective.
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.012 | 0.026 |
| Meta-epidemiology (narrow) | 0.001 | 0.001 |
| Meta-epidemiology (broad) | 0.001 | 0.001 |
| Bibliometrics | 0.003 | 0.005 |
| Science and technology studies | 0.021 | 0.009 |
| Scholarly communication | 0.023 | 0.008 |
| Open science | 0.005 | 0.004 |
| Research integrity | 0.046 | 0.017 |
| Insufficient payload (model declined to judge) | 0.029 | 0.004 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".