Translections for a trade agreement between Canada and the United States resumed on Monday morning after being suspended by Donald Trump on Friday. It is the Canadian government’s decision to cancel its tax on digital services on Sunday, which convinced Washington to return to the negotiating table, but some fear that Canada has left a big section of its digital sovereignty.
“It’s a great way to highlight Canada’s Day,” quips Alain Saulnier. The author of the book Stand up to web giants was stunned by the Canadian government’s decision to cancel the digital services tax when The press joined her on Monday morning.
“It’s really major, because in this era, digital sovereignty is the most important sovereignty,” says the one who had just written a text for The press In which he begged Mark Carney not to give in to the threats of Donald Trump. Ottawa’s decision forced him to rewrite it.
The opposite of digital sovereignty
Canceling the digital services tax in response to Donald Trump’s threats is contrary to the assertion of digital sovereignty by Canada, deplores Gabriel Ste-Marie, deputy of Joliette-Manawan and spokesman for the Bloc Quebec in industry.
Mark Carney “had an opportunity to stand in front of the chief intimidator. He didn’t take it. He decided to fold. This is a big victory for Donald Trump, ”said the elected blockist elected official.
The American president had announced on his Truth Social network on Friday that he suspended commercial negotiations with Canada due to the digital services tax which he described as “scandalous”. However, the tax was ratified by a law of the Canadian Parliament in June 2024. The companies to which it applied, essentially American multinationals, had to pay on June 30, 2025 the first payment of this 3 % tax on their digital income made in Canada during the 2022 to 2024.
Prime Minister Mark Carney said he spoke with Donald Trump on Sunday. After a discussion qualified as “very productive” by Mr. Carney, his Minister of Industry, François-Philippe Champagne, announced the cancellation of the tax in order to “support [l]negotiations […] In anticipation of the conclusion of a general, mutually advantageous trade agreement with the United States ”.
In a press briefing on Monday in the afternoon, the spokesperson for the White House, Karoline Leavitt, welcomed the decision: “Prime Minister Carney and Canada capitulated [caved] Before President Trump and the United States. »»
Mark Carney had to defend his decision in the afternoon, in a press scrum, in Ottawa: “In a global context, it is good for Canadians and good for workers,” he said, while suggesting that the digital services tax would have been dismissed later during the negotiations.
On June 19, Minister Champagne had however defended the digital services tax by promising that she would indeed be in force on June 30. “It was a mistake to promise to set up this tax,” said Mr.me Leavitt lunddi.
Domino effect?
This has ahead of the future, according to Alain Saulnier, who fears a “domino effect” on several other laws adopted in recent years by Ottawa and Quebec. He thinks in particular of C-11, which imposes on certain digital giants such as Netflix, YouTube (Alphabet) or Spotify to contribute financially to Canadian culture.
“What is the next request?” Asks the retired professor of the University of Montreal. “The cultural exception? Will it go to the reel too? “Gabriel Ste-Marie says that” the block will fight beak and nails so as not to let it go “, while stressing that the abolition of the digital services tax is a sign that” Canada abandons its economic and fiscal policy “.
Photo Sean Kilpatrick, Canadian Press Archives
Gabriel Ste-Marie, deputy of Joliette-Manawan and spokesperson for Quebec in the area of industry
The deputy gives the example of the Linda Asselin clothing store, next to her office: “She pays for land taxes, taxes on profits, she contributes to everything. Then she competes with web giants who will send a cheaper package, but who do not pay taxes. You have to reduce equity in the tax system, he pleads. But the government, by folding in the face of the threats of Donald Trump, missed a great opportunity. »»
The professor of tax law at McGill Allison Christians university abounds in this direction: “Canada has never been so far from its autonomy in tax matters,” she said, recalling that the Carney government has already let the carbon tax go and reduces capital gain tax.
And show policy
However, she adds that the cancellation of the digital services tax, “is politics” on the part of the liberal government, in the sense of the game of the Real policynot a declaration of public policy (policyin English): “If, to negotiate with an attacker, you have to make a showthen okay. Let’s make one show. »
She also adds that “nothing will prevent the legislator from offering a tax on digital services” in the coming years. “Canadians will always ask for tax equity,” she said. It is only a question of finding the way of doing it and adapting to the international context.
Play your cards too early?
Gabriel Ste-Marie stresses that the United Kingdom has managed to tie a trade agreement with the United States while maintaining its digital services tax. “Did we really need, from the first threat, to let it go right away?” Asked the deputy.
In other words, has Canada negotiated badly by immediately canceling the digital services tax? Should he rather announce the suspension or the postponement?
The former Prime Minister of Quebec Jean Charest admits that he is unaware. But the one who is a member of the Canadian-American Relations Council considers that Mark Carney has taken a “strategic decision” in circumstances that must not be forgotten: “The objective of Prime Minister Carney is to hire Trump and his government in a global negotiation. Not only on prices. We want to talk about security, defense, border, immigration, fentanyl, Golden Dome. We put everything in there. And we say, given our geography, that we would be well advised, the two countries, to conclude an agreement that would be global and which would allow us to appease the markets and work together. »»
Ottawa and Washington both indicated that they are giving themselves until July 21 to conclude this global agreement, as they agreed to do so on the most recent G7 summit in Kananaskis, Alberta.
With the Canadian press
