Canada rescinds tax on US tech firms in hopes of Trump trade deal
The digital services tax, enacted last year, would have seen US service providers such as Alphabet and Amazon on the hook for a multi-billion-dollar payment in Canada by Monday, analysts have said.
Washington has previously requested dispute settlement talks over the tax -- but on Friday Trump, who has weaponized US financial power in the form of tariffs, said he was ending trade talks with Ottawa in retaliation for the levy. He also warned that Canada would learn its new tariff rate within the week.
But on Sunday, Ottawa binned the tax, which had been forecast to bring in Can$5.9 billion (US$4.2 billion) over five years.
Finance Minister Francois-Philippe Champagne "announced today that Canada would rescind the Digital Services Tax (DST) in anticipation of a mutually beneficial comprehensive trade arrangement with the United States," a government statement said.
It added that Trump and Canadian Prime Minister Mark Carney "have agreed that parties will resume negotiations with a view towards agreeing on a deal by July 21, 2025." There was no immediate comment from the White House or Trump.
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