Federal government rescinds digital services tax to advance trade talks with U.S.
The Canadian government says it's decided to rescind a digital services tax that led U.S. President Donald Trump to break off negotiations aimed at ending a damaging trade war between the United States and Canada.
In a late Sunday announcement, Prime Minister Mark Carney's government said talks with the Trump administration would resume now that Canada has repealed the levy that applied to U.S. tech giants such as Amazon, Google parent Alphabet, Meta, Uber and Airbnb.
Mr. Trump on Friday had announced the United States was 'terminating all discussions on trade with Canada' in response to the digital sales tax. First payments under the levy were due June 30 and the initial bill faced by big U.S. companies was expected to exceed US$2-billion.
'Prime Minister Carney and President Trump have agreed that parties will resume negotiations with a view towards agreeing on a deal by July 21, 2025,' the Canadian government said in a statement Sunday.
The digital sales tax would have imposed a 3-per-cent levy on Canadian revenue from digital services exceeding $20-million that is earned by companies with at least $1.1-billion in global revenue. This includes revenue from search engines, social-media platforms and online marketplaces.
With files from Canadian Press
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