The Canadian government announced, on Sunday, June 29, cancel a tax targeting the tech giants in the hope of reaching a trade agreement with the United States, two days after the discussion decided by Donald Trump.
Canadian Minister of Finance, François-Philippe Champagne, announced on Sunday in a statement that Canada would cancel this tax on digital services (TSN). The document specifies that the resumption of negotiations must lead to a commercial agreement with the United States by July 21.
Donald Trump announced on Friday ending commercial negotiations with his Canadian neighbor, judging that the Ottawa tax targeting digital giants was a “Direct and obvious blow” worn in the United States. The American president had justified the cessation of discussions with Canada through the entry into force of this tax on June 30.
The TSN was to target tech giants that generate annual global turnover greater than $ 1.1 billion Canadian, and which earn annual revenues in Canada over 20 million Canadian dollars. The tax was to consist of a puncture of 3 % on income from online advertising, sales platforms, social networks or the sale of personal data. In particular, she targeted American digital giants such as Google, Apple, Meta (Facebook), Amazon or Microsoft. They are accused of taking advantage of the intangible nature of their activity to escape tax.
A “scandalous” tax for Donald Trump
“Withdraw the digital services tax will advance discussions and support our efforts to create jobs and build prosperity”estimated on X François-Philippe Champagne.
Donald Trump and the White House did not react immediately.
The TSN had been adopted last year temporarily, pending the culmination of international negotiations on the taxation of multinationals.
Friday, Donald Trump qualified the TSN as “Scandalous” On its Truth Social application and writes that the United States would communicate in Canada, within seven days, the level of customs duties which would be imposed on it. Canadian Prime Minister Mark Carney had promised to return from “Continue to carry out these complex negotiations, in the best interests of Canadians”.
Since Donald Trump’s return to power in January, the US administration announced-then suspended, awaiting negotiations-several taxes on Canadian imports to the United States, while Canada has retaliated by imposing customs duties.
The American president has targeted in particular the Canadian automotive, steel and aluminum sectors, while the United States and Canada are, with Mexico, a member of a free trade agreement (ACEUM or USMCA in English).
Relations between Ottawa and Washington have deteriorated since the start of Donald Trump’s second term, who has on several occasions that Canada becomes 51ᵉ US state.
