Canada is scrapping its Digital Services Tax (DST) after U.S. President Donald Trump abruptly halted trade negotiations, blaming the tax on big tech as the reason.
The move comes just before a June 30 deadline, when U.S. tech giants like Google, Meta, and Amazon were set to start paying retroactive taxes on Canadian revenue. The tax was originally announced in 2020 to make sure large tech companies weren’t avoiding taxes on profits made from Canadian users.
Ottawa enacted its quietly last July when Joe Biden was still President.
Canada had hoped to follow Europe’s lead with its DST, using it as a temporary measure until a global agreement on taxing digital services could be reached. That international deal is still not in place—and now, neither is Canada’s tax.
On Friday, Trump stopped all trade discussions with Canada, blaming the DST for the breakdown. In response, the Canadian government quickly reversed course on Sunday evening.
“Canada’s new government is focused on building the strongest economy in the G7 and standing up for Canadian workers and businesses,” said Finance Minister François-Philippe Champagne. “Rescinding the digital services tax will allow the negotiations of a new economic and security relationship with the United States to make vital progress and reinforce our work to create jobs and build prosperity for all Canadians.”
Champagne announced the DST repeal on X, but his post is getting “ratioed”, with critics slamming the government for caving to the U.S. after all its tough “elbows up” talk.
“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. Today’s announcement will support a resumption of negotiations toward the July 21, 2025, timeline set out at this month’s G7 Leaders’ Summit in Kananaskis,” said Prime Minister Mark Carney.
Critics, such as University of Ottawa Law Professor, Michael Geist, reacted to the news by saying, “Canadian government ignored repeated warnings of DST risks only to cave at the last minute. Walking away from estimated $7.2 billion in tax revenue with only restarting negotiations that were on until government overplayed its hand to show for it. Brutal.”
“What a series of ridiculous blunders over several years to get to this point,” said Geist.
Ottawa previously said it was expected to get an additional $5.9 billion in revenue over five years, starting in 2024-25, by taxing tech giants, according to its Budget 2024 that detailed the tax. The $7.2 billion number comes from the
The government now plans to officially repeal the Digital Services Tax Act through new legislation. Negotiations with the U.S. are expected to resume immediately, with hopes of striking a broader deal on trade and security within weeks.
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So according to the critics, introducing DST was a mistake and repealing it is also a blunder?
Not the same critics, obviously.
No, I see some people criticizing the bill at the time and now calling the repeal a capitulation.
Eternal contrarians aren’t people, they are trolls.
I still see them as people, who choose to act like trolls.
Should never have happened. The blunder was thinking discussions at the G7 about a new trade deal meant Trump had forgotten about the DST. He’d made it clear earlier that he would retaliate for the DST.
DST was a mistake. Being forced to kill it at the last minute is just humiliation.
This is just embarrassing. Its one thing to laugh at Trump and his nickname of TACO (Trump Always Chickens Out) but now we have C(Carney)ACO too?
Seriously, don't bring up the "TACO" thing – staking out an extreme position at the outset has been a part of his negotiation strategy since forever: he even wrote about it in his book in 1980's.
Calling it a weakness it just plain ignorant (and more than a little stupid).
Ouch, Timrules is the supreme leader in Tim's world and all bow to him.
Trump calls countries out, devastates the stock market and they bends over with very few victories to date….great strategy.
Trump is a necessary evil we are forced to presently deal with, please don't expect us to fall to his level of idiocy.
The only thing you are ruling Tim, is world being naive.
TRUMP ALWAYS CHICKENS OUT to date.
That comment was for your benefit, not mine …
Carney Ultimately Caves, Kneeling.
I got to give Carney one thing, he realizes he has only a knife in a gun fight.
This DST was from the former corrupt PM we had and it was an idiotic move to try to push it through.
A smart thing would have been to bury this tax before it got started, the next best thing to do is to repeal it as soon as humanly possible.
Ultimately? Carney enjoys the smell of Trump's farts. And so does virtually every political leader in the world. Bully's almost always get what they want. That's life.
This may not be caving in on Canada’s part but giving up something worthless to give Trump bragging rights for the win and move along the negotiations.
I agree, that makes perfect sense though it makes you wonder why "poke the bear" in the first place.
I am not advocating for the bill. It should not have happened, at least not in that form of a blatant money grab. I am pointing out the lack of principles of wanting to have it both ways, calling it a mistake when introduced, all along insisting that should be withdrawn and now when it has been repealed, it is also a mistake. I don’t really care on which side of the issue one falls. One can be against the bill or for the bill, I don’t care, but just have some principles.
The bill being a mistake, it’s still a good thing that Carney had something basically worthless to sacrifice in negotiations and appease the Orange One without loosing anything.
Mostly agree. Except that what this does is make it look like Carney will fold easily under pressure. That’s not a great position to start negotiating from.
I don’t think Trump sees Carney as someone who folds easily. He knows that he is more experienced in the business world of high stakes negotiations and definitely a tougher nut than Trudeau. Besides, Trump starts every negotiation with conviction that he is the superior negotiator no mater who’s sitting across.
Mostly agree. Except that what this does is make it look like Carney will fold easily under pressure. That’s not a great position to start negotiating from.
They are criticizing Carney’s pathetic and hollow “Elbows up!” jingoism, not repealing the tax per se. Not to mention the gullibility of his supporters.
It’s the lack of principles that I have issue with, not with criticizing Carney or his supporters that you consider gullible.
You are missing the point: critics are against it, either way. Repealing it is a good thing; the way it happened is a bad thing.
"The end justifies the means" is Maoist drivel, not something associated with Carney's detractors.
Exactly what I am saying, some like to have it both ways. I don’t quite get from where “the end justifies the means” is coming in the context. Some who are against Carney no-matter-what actually are associated with that motto and apparently actively employ it. Before Mao, there was Machiavelli who introduced that notion way back in 16th century, so I wouldn’t call it Maoist drivel.
People are against the tax – that's the principle.
Carney's defence of it, and subsequent capitulation was pathetic.
Both of those can be true at the same time. The fact that he finally cancelled the tax [the End], doesn't necessarily mean the way he did it [the Means] beyond reproach [the Means is still subject to criticism].
Also, (not that it matters) the phrase predates Machiavelli (by a lot), but he was a philosopher, not a tyrant who actually used it overtly to justify killing millions.
Nothing coming from someone you dislike cannot be anything but wrong, right? Sometimes the strong negative bias prevents you from seeing things differently. It is quite possible that repealing the DST wasn’t a capitulation but a smart negotiating move to sacrifice something practically of no value and restart the negotiations. Also, defending it beforehand makes sense because increases the perceived value of what you then going to give up in negotiations.
“The end doesn’t justify the means” is usually mentioned in the context where the unethical “means” subvert the desirable “end”. In your explanation, the means (however problematic in your view) are not anywhere near that criteria. They are not so bad or immoral that cannot justify the end. Nor they have to justify it.
Please shed some light on how that phrase predates Machiavelli. Any source on for how long and who was the originator? Machiavelli, although not himself a dictator was a ideologist for any autocratic ruler who would skirt any scruple and be plain evil if it was deemed politically necessary – so it’s close…
"It is quite possible that repealing the DST wasn’t a capitulation but a smart negotiating move" – that is an absolutely Herculean attempt to defend the the indefensible! I hope he's paying you a lot, lol!
"“The end doesn’t justify the means” is usually mentioned in the context where the unethical “means” subvert the desirable “end”. " That is flat-out wrong: the point of the phrase is that any means (regardless of how unethical) are justified by a desirable end: the means doen't "subvert" the ends, it is justified by it, FFS! Looks like you misfired on your Google search.
"Exitus acta probat" ("The outcome justifies the deeds") – Ovid Heroides (c.10 BCE)
You're killin' me … read more, write less.
With your type, accusations are often a projection. Nobody is paying me nor would I consider selling my integrity to anyone and unlike most on the Right, I am not beholden to any cheap political option. I detest having to stifle my own conscience because I feel I need to simp to one political side or submit to a compulsive hate toward the leader of the other.
As for the Herculean effort you mentioned, I’m not alone in that opinion. Other people, like foreign affairs expert from arguably non-partisan (and definitely not left leaning) research institute see it that way.
Read again what you wrote about means subverting/justifying the ends. You literally say: “the point of the phrase is that any means (regardless of how unethical) are justified by a desirable end.“ The point is just the opposite: the means are NOT justified by the end. When is pointed out that the means are not justified by the end, that implies that when such an end is achieved by questionable means, the end is diminished, invalidated, subverted. FFS.
BTW, regarding my “misfiring” on Google search, I haven’t touched it before you mentioned Heroides and only then to find out more about it. Me asking you to shed some light on the origins of the phrase was an honest question. I wanted to learn more. I don’t feel shame in asking about something I am not familiar with but I see shame in pretending to know more than I do.
Also, I don’t really understand the need to demean and insult others and act with condescension because I don’t suffer from that affliction. Nonetheless, I am curious about what psychological need it fulfills in a person.
I just hope Carney really thought it through beforehand. Time will tell if this was right move for Canada 😕
Carney succumbed to blackmail. How is that ever a good thing?
Proving once again that Trump's tactics WORK. Nobody dares to stand-up to the bully.
Let me state the obvious for the emotionally driven citizens of Kanukistan: YOU dodged another tax.
Do you have any illusion that the companies that were targeted would have just swallowed the tax and not pass it to the defenseless consumer???
Uber, Netflix, Amazon….all charities… right?
Swear at Trumpet all you want, it's us that benefit this time.