Happy Canada Day! The Canadian government has rescinded its Digital Services Tax, one day before it was to go into effect.
June 30, 2025 - "The Canadian government is rescinding its digital services tax to avoid stalling trade talks with the United States, two days after U.S. President Donald Trump announced he would end negotiations over the levy. Ottawa says that removing the tax will put Canada back on track to reach a trade deal with the United States by July 21.
"Trump said on June 27 that he is ending all trade negotiations with Canada over Canada’s digital services tax (DST), which would impact U.S.-based tech companies such as Amazon, Google, and Netflix.... The DST imposed a 3 percent tax on revenue that tech companies earn from digital services provided to Canadian users. It was scheduled to go into effect on June 30, and was retroactive to 2022, leaving U.S. tech companies with a $2 billion bill to pay by the end of June. The Canadian tax had been an irritant to both the Biden and Trump administrations....
"The Trump administration has already imposed 25 percent tariffs on Canadian products, though goods falling under the U.S.–Mexico–Canada Agreement have been exempted. Washington has also imposed blanket tariffs on all steel and aluminum imports.... Ottawa has been seeking new trade negotiations with the United States to minimize U.S. tariffs. In announcing the removal of the DST, Canadian Minister of Finance François-Philippe Champagne said the move would allow trade negotiations with the United States to go forward....
"Champagne had insisted up until recently that Ottawa wouldn’t be putting the tax on hold, after pressure from Canadian and U.S. business groups as well as U.S. politicians to remove the tax. Canada’s Liberal government had said that the tax is in line with similar measures from a number of other countries, and that corporations should pay their 'fair share' of taxes in Canada.
The Office of the Parliamentary Budget Officer estimated that the tax would bring in $7.2 billion over five years in revenue for Ottawa."
