Liberals rescind digital services tax after Trump threat
The Liberal government announced that it will rescind its Digital Services Tax (DST) in a bid to restart trade negotiations with the United States.
The Liberal government announced that it will rescind its Digital Services Tax (DST) in a bid to restart trade negotiations with the United States, following a decision by U.S. President Donald Trump to freeze negotiations last week.
Finance Minister François-Philippe Champagne announced Saturday that the federal government would halt the June 30 collection of the DST and move forward with legislation to rescind the Digital Services Tax Act.
The move comes amid efforts by Prime Minister Mark Carney’s government to secure a new Canada–U.S. economic and security partnership, with Carney eyeing a July 21 deadline to finalize an agreement.
The decision marks a sharp reversal from the government’s position just days earlier.
On June 27, Champagne told reporters the tax remained “in force” and confirmed Canada would continue with its implementation, despite widespread opposition from the U.S. government and Canadian business groups.
Trump, who had previously warned Canada not to impose the tax, abruptly cut off negotiations after being informed that the Carney government intended to proceed.
In a post on Truth Social, he called the tax “a direct and blatant attack on our Country,” accusing Canada of “copying the European Union” and warning of retaliatory tariffs.
“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,” Trump wrote Friday.
“We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven-day period.”
The DST, introduced under the previous Liberal government in 2020 and passed into law in 2024 with NDP support, applied a 3 per cent tax on Canadian revenues of large digital firms earning at least $20 million annually.
It disproportionately affected U.S. tech giants, including Meta, Google, Uber, and Amazon.
The decision to withdraw the DST drew praise from Washington.
“Thank you, Canada, for removing your Digital Services Tax, which was intended to stifle American innovation and would have been a deal breaker for any trade deal with America,” wrote U.S. Secretary of Commerce Howard Lutnick on X.
Carney, who had previously supported the DST as part of an effort to tax digital services, framed the decision as a strategic pivot in service of a wider economic agenda.
“In our negotiations on a new economic and security relationship between Canada and the United States, Canada’s new government will always be guided by the overall contribution of any possible agreement to the best interests of Canadian workers and businesses,” Carney said in a statement Saturday.
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When are these Communist Marxist Carney Liberal Europeans going to admit their incompetence?
Carney the absolute best negotiator in the Liberal universe should resign and take up residence
back in England or Ireland.
Common sense rules.
He us getting more and more like the Monty Pythons 'Cowardly Sir Robin's. He must be getting friction burns on his bottom after tucking his tail between his legs that tightly.