Ottawa / Washington: In an important reversal, Canada has announced the withdrawal of its controversy Digital services tax (DST) Just days later US President Donald Trump Suspended in progress trade negotiations To protest against the sample. The decision aims to facilitate diplomatic tensions and to open the way for negotiations reproduced before the July 21, 2025 chronology agreed to Summit of G7 leaders in Kananaskis earlier this month.
Prime minister Mark Carneyin an official Sunday declaration, confirmed that Canada and the United States had accepted restart commercial discussionswho had been suddenly cut by President Trump on Friday on what he called a “Direct and blatant attack on our country”.
“Today’s announcement will support a resumption of negotiations to the timeline of July 21, 2025,” said Carney, stressing the importance of maintaining a constructive dialogue with Canada’s largest trading partner.
Context: What was the DST?
The Canadian DST, initially adopted as a right in 2024, proposed a 3% tax on National digital income large multinational companies, in particular targeting Online markets, social media companies, digital advertising platforms and companies monetize user data. The sample applied to companies that win Dad 20 million (14.6 million dollars) in Canadian income every year and was set to be collected retroactively from 2022.
Although aimed at Closing tax loopholes which allowed the giants of technology such as Apple, Amazon, Meta and Alphabet / Google To minimize their Canadian tax obligations, the measure quickly wraised the White House.
Trump’s reaction and pressure tactics
Friday, in his social article of truth, Trump accused Canada of unjustly targeting American companies and announced a Complete suspension of commercial negotiations With Ottawa. He also warned that reprisals The prices would be announced in a week.
Trump’s decision marked a strong escalation in the protectionist position of his administration, similar to previous commercial spots with allies during his previous quarter. Observers noted the broader implications for American relations with G7 partnersespecially as France, the United Kingdom and Italy have also implemented similar digital taxes.
Interior reviews in Canada
The Canadian Government about the Face sparked criticism at home. Paris MarxAn eminent journalist of Canadian technology, said that the decision sent the message that “Canada can be pushed around.”
“Multinational technology companies do not pay their just tax share in Canada. This tax was designed to solve this problem, and the backup shows weakness, “said Marx.
“The United States has blocked a global solution under Biden and Trump, and countries like Canada had no choice but to act unilaterally.”
Response from the Ministry of Finance
In a press release, Canada Ministry of Finance confirmed that the The DST collection will be interrupted immediatelyand formally legislation Repeal the law on digital services tax will soon be deposited by The Minister of Finance François-Philippe Champagne.
The ministry reiterated that Canada “Preference remains a multilateral agreement“Through the Organization for Economic Cooperation and Development (OECD) Framework but recognized that progress on this front has been blocked.
Trade and economic context
Canada is the The second United States trading partnerwith bilateral trade reaching almost $ 762 billion in 2024. Despite being spared from Trump earlier Price pack April 2025Canada still faces 50% steel and aluminum rates.
Analysts now see Resumption of commercial talks in the United States-Canada as a critic for the July 21 Date of the agreementespecially with North American economic integration And Coordination of the supply chain At the top of the agenda before 2026 Summit of North American competitiveness.
