EXCLUSIVE: With digital tax scrapped, U.S. ambassador says he's 'confident we will have an agreement'

National Post

7 hours ago

OTTAWA — With Canada's digital services tax now scrapped, a free trade deal between Canada and the Unites States is just a question of time, United States Ambassador Pete Hoekstra told National Post today.
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In an exclusive interview, Hoekstra said he's not sure if trade talks between the two North American neighbours can be resolved by July 21, a target agreed to by the two sides when they met in mid-June in Kananaskis, Alta. But the ambassador said he's very confident that a deal will get done.
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'We will get to an agreement. The only question is how long will it take,' he said during an interview. 'I'm confident we will have an agreement.'
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Hoekstra emphasized that free trade between Canada and the U.S. is good for both countries, but that policies such as Canada's now-defunct digital services tax are irritants that get in the way.
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He said the tax, however, was not the only trade irritant irking the U.S. Others include provincial policies that have pulled American alcohol off store shelves and other anti-competitive measures that make it difficult for U.S. companies to compete in this market. U.S. President Donald Trump has also made it clear that he doesn't like Canada's supply management policies towards the dairy and poultry industries because they make it difficult for American producers to compete in the Canadian market.
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'There's lots of issues that need to be covered. Some of them are going to be tougher than others,' Hoekstra said. 'The important thing is that this really sets the table.'
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Prime Minister Mark Carney told reporters on Monday that he had always expected the digital services tax to be a casualty of the trade negotiations with the U.S., so it was pointless for the government to collect that tax revenue.
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'It's something that we expected, in the broader sense, that would be part of a final deal,' said Carney, without explaining why the decision to scrap the tax was made only hours before it came into effect at midnight on Sunday.
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'It doesn't make sense to collect tax from people and then remit them back, so it provides some certainty. And as I just said, negotiations have restarted. We're going to focus on getting the best deal for Canadians. We're making progress,' said Carney.
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Canada's digital services tax was considered a big deal to the U.S., Hoekstra said, because it unfairly targeted American big tech companies. The tax was raised consistently by the U.S. in every recent conversation about trade, he added.
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But Carney called Trump Sunday to say that he would be cancelling the tax, just two days after Trump insisted that the U.S. would walk away from trade talks with Canada and impose retaliatory tariffs if the tax wasn't killed. The first digital services tax payments were due Monday, although they were to be retroactive to 2022.