Canada axes tech tax in push for US trade deal
Canada axes tech tax in push for US trade deal
Mark Carney listens to Donald Trump at the G7 summit in Kananaskis, Alberta, in June. File photo: Reuters
Canadian Prime Minister Mark Carney said trade talks with the United States have resumed after Ottawa rescinded its plan to tax American technology firms.
The rescindment came after US President Donald Trump said on Friday that he was suspending trade talks with Canada over its plans to continue with its tax on technology firms, which he called 'a direct and blatant attack on our country'.
The Canadian government said 'in anticipation' of a trade deal 'Canada would rescind' the Digital Services Tax. The tax was set to go into effect on Monday.
Carney and Trump spoke on the phone on Sunday, and Carney's office said they agreed to resume negotiations.
'Today's announcement will support a resumption of negotiations towards the July 21, 2025, timeline set out at this month's G7 leaders' summit in Kananaskis,' Carney said in a statement on Sunday.
Carney visited Trump in May at the White House, where he was polite but firm. Trump travelled to Canada for the G7 summit in Alberta, where Carney said that Canada and the United States had set a 30-day deadline for trade talks.
Trump, in a post on his social media network on Friday, said Canada had informed the United States that it was sticking to its plan to impose the digital services tax, which applies to Canadian and foreign businesses that engage with online users in Canada.
The tax was due to hit companies such as Amazon, Google, Meta, Uber and Airbnb with a three-percent levy on revenue from Canadian users. It would have applied retroactively, leaving US companies with a US$2 billion bill due on Monday.
'Rescinding the digital services tax will allow the negotiations of a new economic and security relationship with the United States to make vital progress,' Canadian Finance Minister François-Philippe Champagne said in a statement.
Champagne also spoke with US Treasury Secretary Scott Bessent on Sunday. (AFP)
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