After Trump ‘terminates' trade talks, Canada scraps proposed levy: What was the Digital Services Tax, how it would hit US firms
Trump had called the tax 'a direct and blatant attack on our Country'. It was supposed to come into effect on Monday, June 30. After Canada's walk-back, its finance minister, François-Philippe Champagne, spoke to the US trade representative Jamieson Greer on Sunday, signalling that the trade deal talks might be back on track.
What is Canada's Digital Services Tax, and why was it such a sticking issue with the US? What will its revocation mean for Prime Minister Mark Carney's government? We explain.
The tax aimed to collect a levy of 3% of the revenue a digital services firm made from Canadian users, above $20 million in a calendar year. In one of its more controversial clauses, payments were to be retroactive, beginning 2022. While the law had been passed earlier, payments were due from today.
Among those impacted would have been major Amercian technology firms, such as Google, Meta, Apple, Amazon, etc.
'The DST was announced in 2020 to address the fact that many large technology companies operating in Canada may not otherwise pay tax on revenues generated from Canadians… While Canada was working with international partners, including the United States, on a multilateral agreement that would replace national digital services taxes, the DST was enacted to address the aforementioned taxation gap,' Canada's finance ministry said on June 29.
If the law had been implemented, American companies would have had to pay roughly $2.7 billion to the Canadian government, a report in The New York Times said. Trump was vehemently opposed to the law.
On Friday, he posted on Truth Social, 'We have just been informed that Canada, a very difficult Country to TRADE with… has just announced that they are putting a Digital Services Tax on our American Technology Companies, which is a direct and blatant attack on our Country… Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately. We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period.'
Getting a trade deal with the US is important for Canada, which, going by US Census Bureau data, exported $412.7 billion worth of goods to the US last year.
At present, Trump has slapped 50% tariffs on steel and aluminum imports from Canada and 25% on auto imports, apart from the 10% base tariff he has put on most countries. Along with this, Canada and Mexico face tariffs of 25% apparently to curb fentanyl smuggling to the US.
Canada, thus, agreed to scrap the tax to take trade talks forward.
'In our negotiations on a new economic and security relationship between Canada and the United States, Canada's new government will always be guided by the overall contribution of any possible agreement to the best interests of Canadian workers and businesses. Today's announcement will support a resumption of negotiations toward the July 21, 2025, timeline set out at this month's G7 Leaders' Summit in Kananaskis,' PM Carney said on Sunday.
Given that Carney had come to power mainly on a platform of standing up to Trump, this fold-up could have been embarrasing for him. However, the tax wasn't too popular within Canada either, as it could have raised the cost of digital services like hailing rides and streaming movies.
Robin Guy, a leader of the Canadian Chamber of Commerce, had said in July last year, 'The imposition of a retroactive discriminatory digital services tax by the federal government will not only make life more expensive for Canadian families, businesses and workers, but it will significantly harm our relationship with the United States. The government should reverse its unilateral decision that is out of step with our allies, and instead, work with our trading partners on an international solution that would better serve Canadians.'
In fact, recently, many had believed that the tax's best purpose could be to use it as a bargaining chip in talks with the US.
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Time of India
13 minutes ago
- Time of India
An Israeli startup says its new technology will save the planet, scientists have doubts
Academy Empower your mind, elevate your skills The startup Gigablue announced with fanfare this year that it reached a historic milestone: selling 200,000 carbon credits to fund what it describes as a groundbreaking technology in the fight against climate three years ago by a group of entrepreneurs in Israel, the company says it has designed particles that when released in the ocean will trcarbon at the bottom of the sea. By "harnessing the power of nature," Gigablue says, its work will do nothing less than save the outside scientists frustrated by the lack of information released by the company say serious questions remain about whether Gigablue's technology works as the company describes. Their questions showcase tensions in an industry built on little regulation and big promises - and a tantalizing chance to Pallas, an event organizer based in Italy, struck a deal with Gigablue last year. He said he trusts the company does what it has promised him - ensuring the transportation, meals, and electricity of a recent 1,000-person event will be offset by particles in the service is like "an extra trash can" where Pallas can discard his unwanted emissions, he said."Same way I use my trash can - I don't follow where the truck that comes and picks up my trash brings it to," he said. "I'll take their word for it."'Hundreds of thousands of carbon credits' Gigablue has a grand vision for the future of carbon removal. It was originally named "Gigaton" after the one billion metric tons of carbon dioxide most scientists say will be necessary to remove from the atmosphere each year to slow global company began trials in the South Pacific Ocean last year, and says it will work with country authorities to create a "sequestration field" - a dedicated part of the ocean where "pulses" of particles will be released on a seasonal says its solution is affordable, too - priced to attract investors."Every time we go to the ocean, we generate hundreds of thousands of carbon credits, and this is what we're going to do continuously over the upcoming years and towards the future, in greater and greater quantities," co-founder Ori Shaashua credits, which have grown in popularity over the last decade, are tokens that symbolize the removal of one metric ton of carbon dioxide from the atmosphere. On paper, companies that buy credits achieve a smaller carbon footprint without needing to reduce their own emissions - for instance, by paying another vendor to plant trees or capture carbon dioxide from the a few countries have required local industries to purchase carbon credits. Most companies that buy them, including Microsoft and Google, do so credits have helped fund a band of startups like Gigablue that are eager to tackle the climate crisis, but they are also unevenly regulated, scientifically complex, and have in some cases been linked to 200,000 credits are pledged to SkiesFifty, a newly formed company investing in greener practices for the aviation industry. It's the largest sale to date for a climate startup operating in the ocean, according to the tracking site making up more than half of all ocean-based carbon credits sold last it could beckon a rapid acceleration of the company's work. Gigablue hopes to reach a goal this year of capturing 10 metric tons of carbon dioxide for each ton of particles it deploys, Shaashua said. At that rate, Gigablue would disperse at least 20,000 tons of particles in the wouldn't reveal what it earned in the sale, and SkiesFifty's team declined to be interviewed for this story. Most credits are sold for a few hundred dollars each - but a chart on Gigablue's website suggests its prices are lower than almost any other form of carbon capture on the market.A mission to save the world The startup is the brainchild of four entrepreneurs hailing from the tech industry. According to their LinkedIn profiles, Gigablue's CEO previously worked for an online grocery startup, while its COO was vice president of SeeTree, a company that raised $60 million to provide farmers with information on their who often serves as the face of Gigablue, said he specializes in using artificial intelligence to pursue positive outcomes in the world. He co-founded a data mining company that tracked exposure risks during the COVID-19 pandemic, and led an auto startup that brokered data on car mileage and traffic patterns."Three years ago, I decided to take the same formula, so to say, to climate," Shaashua his guidance, he said, Gigablue created an AI-driven "digital twin" of the ocean based on dozens of metrics to determine where to release the technology officer Sapir Markus-Alford earned a bachelor's degree in earth and environmental sciences from Israel's Ben-Gurion University in 2021, shortly before founding said she began her studies and eventual path to Gigablue after seeing bleached coral reefs and other impacts of warming waters on a series of diving trips around the world."I understood that the best thing we could do for the ocean is to be able to remove CO2," Markus-Alford said.A spokesperson for Gigablue did not answer whether the other co-founders have graduate degrees in oceanography or environmental science, but said the company's broader team holds a total of 46 Ph.D.s with expertise in biology, chemistry, oceanography, and environmental science. Markus-Alford said that figure includes outside experts and academics and "everyone that supports us."The company's staffing has expanded from Israel to hubs in New York and New Zealand , Shaashua social media posts advertising open jobs, Gigablue employees encouraged applicants to "Join Our Mission to Save the World!"Trapping carbon at the bottom of the ocean The particles Gigablue has patented are meant to capture carbon in the ocean by floating for a number of days and growing tiny algae , before sinking rapidly to the ocean floor."We are an elevator for carbon," Shaashua said. "We are exporting the carbon from the top to the bottom."Algae - sometimes referred to as phytoplankton - has long been attractive to climate scientists because it absorbs carbon dioxide from the surrounding water as it grows. If the algae sinks to the deep sea or ocean floor, Gigablue expects the carbon to be trapped there for hundreds to thousands of ultimate goal is to lower carbon dioxide levels so drastically that the ocean rebalances with the atmosphere by soaking up more CO2 from the air. It's a feat that would help slow climate change, but one that is still under active study by climate founders have said the company's work is inspired by nature and "very, very environmentally safe." The company's particles and sinking methods simply recreate what nature has been doing "since forever," Shaashua ran its first trial sinking particles in the Mediterranean in March last on two voyages to the South Pacific, the company released 60 cubic meters - about two shipping containers - of particles off the coast of New kept a mystery While Gigablue has made several commercial deals, it has not yet revealed what its particles are made of. Partly this is because the company says it will build different particles tailored to different seasons and areas of the ocean."It's proprietary," Markus-Alford provide a window into the possible ingredients. According to information on the permit, Gigablue's first New Zealand trial last year involved releasing particles of pure vermiculite, a porous clay often used in potting the second New Zealand trial, the company released particles made of vermiculite, ground rock, a plant-based wax, as well as manganese and iron.A patent published last year hints the particles could also be made of scores of other materials, including cotton, rice husks or jute, as well as synthetic ingredients like polyester fibers or lint. The particles contain a range of possible binding agents, and up to 18 different chemicals and metals, from iron to nickel to specifying future designs, Markus-Alford said Gigablue's particles meet certain requirements: "All the materials we use are materials that are natural, nontoxic, nonhazardous, and can be found in the ocean," she said. She wouldn't comment on the possible use of cotton or rice, but said the particles won't include any kind of asked about vermiculite, which is typically mined on land and heated to expand, Markus-Alford said rivers and erosion transport most materials including vermiculite to the ocean. "Almost everything, basically, that exists on land can be found in the ocean," she company said it had commissioned an environmental institute to verify that the particles are safe for thousands of organisms, including mussels and oysters. Any materials in future particles, Gigablue said, will be approved by local has said the particles are so benign that they have zero impact on the ocean."We are not changing the water chemistry or the water biology," Shaashua Buesseler , a senior scientist with the Woods Hole Oceanographic Institution who has spent decades studying the biological carbon cycle of the ocean, says that while he's intrigued by Gigablue's proposal, the idea that the particles don't alter the ocean is "almost inconceivable.""There has to be a relationship between what they're putting in the ocean and the carbon dioxide that's dissolved in seawater for this to, quote, work," Buesseler co-leads a nonprofit group of scientists hoping to tap the power of algae in the ocean to capture carbon. The group organizes regular forums on the subject, and Gigablue presented in April."I left with more questions than answers," Buesseler raise questions Several scientists not affiliated with Gigablue interviewed by The Associated Press said they were interested in how a company with so little public information about its technology could secure a deal for 200,000 carbon success of the company's method, they said, will depend on how much algae grows on the particles, and the amount that sinks to the deep ocean. So far, Gigablue has not released any studies demonstrating those Kiorboe, a professor of ocean ecology at the Technical University of Denmark, and Philip Boyd, an oceanographer at the University of Tasmania who studies the role of algae in the Earth's carbon cycle, said they were doubtful algae would get enough sunlight to grow inside the more likely the particles would attract hungry bacteria, Kiorboe said."Typical phytoplankton do not grow on surfaces, and they do not colonize particles," Kiorboe said. "To most phytoplankton ecologists, this would just be, I think, absurd."The rates at which Gigablue says its particles sink - up to a hundred meters (yards) per hour - might shear off algae from the particles in the quick descent, Boyd likely that some particles would also be eaten by fish - limiting the carbon capture, and raising the question of how the particles could impact marine is eager to see field results showing algae growth, and wants to see proof that Gigablue's particles cause the ocean to absorb more CO2 from the air."These are incredibly challenging issues that I don't think, certainly for the biological part, I don't think anyone on the planet has got solutions for them," he Kerry, a senior marine and climate scientist for the conservation group OceanCare and senior research fellow at Australia's James Cook University, has closely followed Gigablue's work."What we've got is a situation of a company, a startup, upfront selling large quantities of credits for a technology that is unproven," he a statement, Gigablue said that bacteria does consume the particles but the effect is minimal, and its measurements will account for any loss of algae or particles as they company noted that a major science institute in New Zealand has given Gigablue its stamp of approval. Gigablue hired the National Institute of Water and Atmospheric Research, a government-owned company, to review several drafts of its a recent letter posted to Gigablue's website, the institute's chief ocean scientist said his staff had confidence the company's work is "scientifically sound" and the proposed measurements for carbon sequestration were Gigablue's methods are deemed successful, for now, will be determined not by regulators - but by another private company.A new market is one of several companies known as registries that serve the carbon credit the lack of regulation and the potential for climate startups to overstate their impact, registries aim to verify how much carbon was really Finnish has verified more than a million carbon credits since its founding seven years ago. But most of those credits originated in land-based climate projects. Only recently has it aimed to set standards for the part, that's because marine carbon credits are some of the newest to be traded. Dozens of ocean startups have entered the industry, with credit sales catapulting from 2,000 in 2021 to more than 340,000, including Gigablue's deal, last the ocean remains a hostile and expensive place in which to operate a business or monitor research. Some ocean startups have sold credits only to fold before they could complete their work. Running Tide, a Maine-based startup aimed at removing carbon from the atmosphere by sinking wood chips and seaweed, abruptly shuttered last year despite the backing of $50 million from investors, leaving sales of about 7,000 carbon credits June, published a draft methodology that will be used to verify Gigablue's work, which it designed in consultation with Gigablue. Once finalized, Gigablue will pay the registry for each metric ton of carbon dioxide that it claims to Tikkanen, head of standards at said that although this methodology was designed with Gigablue, her team expects other startups to adopt the same approach."We hope that there will be many who can do it and that it stimulates the market," she road ahead It remains to be seen whether New Zealand officials will grant permission for the expanded "sequestration field" that Gigablue has proposed creating, or if the company will look to other Zealand's environmental authority has so far treated Gigablue's work as research - a designation that requires no formal review process or consultations with the public. The agency said in a statement that it could not comment on how it would handle a future commercial application from like many climate startups, Gigablue was involved in selling carbon credits during its research expeditions - not only inking a major deal, but smaller agreements, the Italian businessman, said he ordered 22 carbon credits from Gigablue last year to offset the emissions associated with his event in November. He said Gigablue gave them to him for free - but says he will pay for more in the sought out carbon credits because he sees the signs of climate change all around him, he says, and expects more requirements in Italy for businesses to decarbonize in coming years. He chose Gigablue because they are one of the largest suppliers: "They've got quantity," he authorities view Gigablue's growing commercial activity could matter in the context of an international treaty that has banned certain climate operations in the than a decade ago, dozens of countries including New Zealand agreed they should not allow any commercial climate endeavor that involves releasing iron in the ocean, a technique known as "iron fertilization." Only research, they said, with no prospect of economic gain should be is considered a key ingredient for spurring algae growth and was embedded in the particles that Gigablue dispersed in October in the Pacific Ocean. Several scientific papers have raised concerns that spurring iron-fueled algae blooms on a large scale would deplete important nutrients in the ocean and harm startup denies any link to iron dumping on the basis that its particles don't release iron directly into the water and don't create an uncontrolled algae bloom."We are not fertilizing the ocean," Markus-Alford said."In fact, we looked at iron fertilization as an inspiration of something to avoid," Shaashua the draft methodology that will use to verify Gigablue's work notes many of the same concerns that have been raised about iron fertilization, including disruptions to the marine food scientists who spoke with AP see a clear link between Gigablue's work and the controversial practice. "If they're using iron to stimulate phytoplankton growth," said Kerry, the OceanCare scientist, "then it is iron fertilization."For now, scientific concerns don't seem to have troubled Gigablue's buyers. The company has already planned its next research expedition in New Zealand and hopes to release more particles this fall."They mean well, and so do I," said Pallas, of his support for Gigablue. "Sooner or later, I'll catch a plane, go to New Zealand, and grab a boat to see what they've done."
Time of India
17 minutes ago
- Time of India
Google makes new proposal to stave off EU antitrust fine
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Time of India
18 minutes ago
- Time of India
Elon Musk's father Errol Musk to Donald Trump: ‘Listen to Elon…he's not a fool'
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