President Donald Trump suspended negotiations with Canada about this tax on Friday. Following a telephone call between Mr. Carney and Trump on Sunday, Ottawa announced that he was deleting the tax.
The White House economic advisor Kevin Hassett said on Monday that the United States would immediately resume commercial negotiations with Canada. A spokesperson for the Prime Minister’s office confirms the resumption of commercial negotiations.
Hassett made these comments during an interview on Fox News, saying that Trump had asked Canada to delete this tax at the G7 summit in Alberta earlier this month. According to him, the suppression of the tax means that Canada and the United States can resume negotiations.
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.
Canada’s decision to abandon the tax came just when the first payment of the tax was about to have maturity. The first payment was retroactive at 2022 and could have cost US $ 2 billion collectively to American companies.
These payments were therefore suspended and the Minister of Finance, François-Philippe Champagne, soon provides for a legislative measure to repeal the law on digital services tax.
Congratulations and 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 to escape the customs of Mr. Trump, but that he had not shown anything on this subject so far.
In a message published on social media, Mr. Blanchet adds that the government of Mr. Carney “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 prices, nor 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. ”
— Don Davies
He adds that with Mr. Carney’s opening 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”.
However, the Canada Chamber of Commerce describes the decision to abandon the “sage” tax.
“This tax would have 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 and 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.
