The United States relaunches trade negotiations with Canada

Prime Minister Mark Carney said on Monday that his decision to abandon the digital services tax in Canada is part of the wider trade negotiations with the United States. However, even though the White House says that Carney “yielded” to US President Donald Trump.

Mr. However, Carney’s government was back on Sunday. In addition, canceled the tax a few hours before the first payment date, three days after Trump suspended commercial negotiations with Canada on this subject.

“It is a global negotiation,” says Carney to journalists on the hill of the Parliament. Therefore, There is a difference in timing between implementing this tax and the deadline for negotiations. Nevertheless, So, in a global context, it’s good for Canadians. Similarly, »»

However, in Washington, the spokesperson for the White House, Karoline Leavitt, says that Mr. Nevertheless, Carney “ceded President Trump and the United united states relaunches trade negotiations States of America”.

According to Ms. In addition, Leavitt, Trump knows how to negotiate.

“Canada made an error by committing to implement this tax that would have harmed our technological companies here in the United States. For example, ” she adds.

“The president clearly made known his position to the Prime Minister. In addition, and the latter called the president last night to let him know that he was going to abandon this tax, which is a great victory for our technological companies and our American workers here with us. Similarly, »»

According to Mr. Therefore, Carney. Meanwhile, Canada and the United States resumed its negotiations on Monday morning and are still aimed at the deadline of July 21 set by the two leaders during their G7 summit in Alberta at the beginning of the month.

The suspension of trade negotiations with Canada by Mr. Moreover, Trump on Friday led united states relaunches trade negotiations to a weekend of intense discussions between Canadian ministers and their American counterparts. Furthermore,

Calls have been made between the Minister of Finance. For example, François-Philippe Champagne, the Minister responsible for Commerce Canada-United States, Dominic Leblanc, and their counterparts from the Trump administration. Meanwhile, The discussions resulted on Sunday evening when Mr. Carney called Trump to let him know that Canada was going to cancel the tax.

The tax would have applied a 3 % levy on the revenues of Canadian users of large technological companies. including Amazon, Google, Meta, Uber and Airbnb.

The first payment was retroactive at 2022 and could have cost US $ 2 billion collectively to American companies.

These payments were therefore suspended. the Minister of Finance, François-Philippe Champagne, soon provides for a legislative measure to repeal the law on digital services tax.

Mr. Carney stresses that this measure will bring some security to united states relaunches trade negotiations companies.

“This has no sense to collect taxes from taxpayers and then donate them to them,” he adds.

However, this last minute change caused some confusion among the companies that were paying the tax.

Tariq Nasir. partner at EY Canada and indirect tax specialist, stresses that some companies have given instructions to pay the tax, but that payments were not collected by the Canada Revenue Agency.

Companies that have made payments are now wondering how to recover this money. how to count payments in their quarterly states, which must be presented next month.

Congratulations. criticism

On Monday, business groups on both sides of the border congratulated the government of having taken measures to eliminate the tax, while criticism accused the government of capitulating before the United States.

The chief of the Bloc Québécois, Yves-François Blanchet, underlines that Mr. Carney campaigned during the elections on the need to find a way united states relaunches trade negotiations to escape Mr. Trump’s customs rights, but that he had not shown anything on this subject.

In a message published on social media, Mr. Blanchet adds that Mr. Carney’s government “has made heavy compromise in defense. borders and counter-tale, then here it is backing on a consensual measure of culture protection, and always with nothing to show, no gain neither any progress for Quebec and Canada, nor on the tariffs, or on trade. »»

“It’s very worrying,” he concludes.

The interim leader of the new Democratic Party. Don Davies, claims on social media that the decision to end the digital service tax is to “give in to Trump and his billionaire friends”.

“Canada is a sovereign country that has the right to adopt its own tax laws. The abandonment of a fair taxation of technology giants is an unacceptable appeasement, ”explains Davies.

He adds that with Mr. Carney’s opening united states relaunches trade negotiations to the anti-missile defense plan “Golden Dome” of Mr. Trump and his race to reach the new 5 % threshold of NATO defense expenses, “it seems more and more that Mr. Carney had the elbows raised during the pre-match skating session-to drop them once the match started”.

The leader of the Conservative Party, Pierre Poilievre, underlines that Mr. Carney’s decision intervened only a few days after the Minister of Finance, Mr. Champagne, announced that the tax would be applied as planned.

“Subsequently, at the very last minute, the Prime Minister decided to cancel this tax,” wrote Mr. Poilievre in an online message.

He adds that in exchange for the elimination of the tax, Mr. Carney “should insist that the United States immediately cancels customs duties on wood. We must obtain gains for our workers as part of these negotiations. »»

Necessary diplomacy

Entrepreneur Arlene Dickinson. who is a member of united states relaunches trade negotiations the government’s advisory council on relations between Canada and the United States, affirms in an online message that it included the need for diplomacy and that only persons involved in negotiations had an overview of the situation.

Ms. Dickinson declared herself “disappointed to see the TSN (tax on digital services) put on break barely a few hours. after having firmly supported it”.

“Reverse as quickly sends a message, whether we wanted it or not. And this message is important, ”she insists.

“It is important for Canadian companies that are in competition in a digital economy that is not always fair. It is important for taxpayers who support the burden when global actors do not. And he counts for those of us who believe that when Canada defends something, it is good. »»

However, the Canada Chamber of Commerce describes the decision to abandon the “sage” tax.

“This tax would have united states relaunches trade negotiations weighed on Canadian consumers. companies and investors in the form of higher costs and would have harmed our economy at a critical time,” said David Pierce, vice-president of government relations in the Chamber, in a statement.

He adds that the removal of the tax “brings us closer to a renewed. reliable commercial agreement” with the United States.

Rick Tachuk. president of the American Chamber of Commerce in Canada (Amcham Canada), said that the withdrawal of the tax was a welcome measure from the Canadian government.

“This is a constructive decision that allows the two countries to focus on strengthening their economic partnership. Companies on both sides of the border are counting on policies that promote certainty. collaboration and long-term growth, “he said in a press release.

Benjamin Bergen. president of the Canadian Innovators Council, who represents the Canadian Technological Sector, said in a press release that his organization supported the united states relaunches trade negotiations tax, but that the government’s decision to eliminate it is the right one.

According to him. the tax was a “tool necessary to ensure that the global giants of technology contribute to their fair share in Canada” and that it was “designed to put local businesses on an equal footing that operate in a rapidly evolving digital economy”.

“Official negotiations now being deadlocked. the cancellation of the TSN is a strategic measure which, as we hope, will help revive dialogue with the United States,” concludes Mr. Bergen.