‘Build, baby, build' must include Canada's key digital infrastructure — not just roads, ports and pipelines
Prime Minister Mark Carney told us what to expect on election night, when he declared: 'We are going to build, baby build!'
Carney has the premiers on board, and recently his government introduced the 'One Canadian Economy Act' in the House of Commons. As part of that legislation, federal government is ready to pick national-building projects and use special legislative measures to make sure that things happen fast.
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Canada News.Net
an hour ago
- Canada News.Net
Canada's digital tax revoked following Trump's condemnation
WASHINGTON, D.C.: On Friday, President Donald Trump announced that he was halting trade discussions with Canada due to its decision to proceed with a tax on technology companies, which he described as "a direct and blatant attack on our country." In a post on his social media platform, Trump revealed that Canada had informed the U.S. of its commitment to the digital services tax. The tax will affect both Canadian and foreign businesses that interact with online users in Canada and will take effect on Monday. "In light of this egregious tax, we are terminating ALL trade discussions with Canada, effective immediately. We will inform Canada of the tariff they will incur to do business with the United States within the next seven days," Trump stated. Canadian Prime Minister Mark Carney responded, indicating that Canada would "continue to engage in these complex negotiations in the best interests of Canadians. It's all part of the negotiation process." In fact by Sunday night, Canada had rescinded the digital tax in favor of continuing negotiations. This announcement marks the latest twist in the trade conflict that Trump has initiated since beginning his second term in January. Relations with Canada have fluctuated, especially after Trump previously hinted at the possibility of Canada becoming a U.S. state. Carney met with Trump in May at the White House, maintaining a polite yet firm stance. Last week, Trump visited Canada for the G7 summit in Alberta, where Carney mentioned that both countries agreed on a 30-day deadline for trade negotiations. The digital services tax would have imposed a three percent levy on revenue from Canadian users for companies like Amazon, Google, Meta, Uber, and Airbnb, applying retroactively and creating a potential US$2 billion liability for U.S. businesses by the end of the month. Discussions between Canada and the U.S. have also included addressing a range of steep tariffs imposed by Trump on goods from Canada. The Republican president had previously indicated that the U.S. would soon send letters to various countries regarding new tariff rates his administration plans to implement. Trump has already enacted 50 percent tariffs on steel and aluminum, 25 percent tariffs on automobiles, and a 10 percent tax on imports from most countries. He may raise these rates on July 9, following a 90-day negotiation period he initiated. Additionally, Canada and Mexico face individual tariffs of up to 25 percent, which Trump implemented to combat fentanyl smuggling, although certain products remain protected under the 2020 U.S.-Mexico-Canada Agreement established during Trump's first term.
CTV News
an hour ago
- CTV News
Asian shares are mixed after U.S. stocks hit an all-time high
A currency trader watches monitors near a screen showing the Korea Composite Stock Price Index (KOSPI) at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Monday, June 30, 2025. (AP Photo/Ahn Young-joon) BANGKOK — Asian shares started the week with gains after U.S. stocks closed at an all-time high following their recovery from the shocks of the Trump administration's trade policies. Canada's decision to cancel a plan to tax U.S. technology firms that had led President Donald Trump to halt trade talks helped to steady the markets. U.S. stock futures advanced after Canadian Prime Minister Mark Carney said the talks had resumed. In Tokyo, the Nikkei 225 climbed 0.8% to 40,487.39. Hong Kong's Hang Seng lost 0.3% to 24,084.20, while the Shanghai Composite index advanced 0.6% to 3,444.43. China reported that its factory activity improved slightly in June after Beijing and Washington agreed in May to postpone imposing higher tariffs on each others' exports, though manufacturing remained in contraction. In South Korea, the Kospi gained 0.5% to 3,071.70. Australia's S&P/ASX 200 rose 0.3% to 8,542.30. Taiwan's Taiex lost 1.4% and the Sensex in India was down 0.6%. In Bangkok, the SET gained 0.4%. On Friday, the S&P 500 rose 0.5% to 6,173.07, above its previous record set in February. The key measure of Wall Street's health fell nearly 20% from Feb. 19 through April 8. The Nasdaq composite gained 0.5% to 20,273.46, its own all-time high. The Dow Jones Industrial Average rose 1% to 43,819.27. The gains on Friday were broad, with nearly every sector within the S&P 500 rising. Nike soared 15.2% for the biggest gain in the market, despite warning of a steep hit from tariffs. An update on inflation Friday showed prices ticked higher in May, though the rate mostly matched economists' projections. Inflation remains a big concern. Trump's on-again-off-again tariff policy has made it difficult for companies to make financial forecasts and strained household budgets. A long list of businesses from carmakers to retailers have warned that higher import taxes will likely hurt their revenues and profits. The U.S. has 10% baseline tariffs on all imported goods, along with higher rates for Chinese goods and other import taxes on steel and autos and the threat of more severe tariffs continues to hang over the economy. The current pause on a round of retaliatory tariffs against a long list of nations is set to expire on July 9. Failure to negotiate deals or further postpone the tariffs could once again rattle investors and consumers. In an interview with Fox News Channel's 'Sunday Morning Futures,' Trump said his administration will notify countries that the trade penalties will take effect unless there are deals with the United States. Letters will start going out 'pretty soon' before the approaching deadline, he said. The Federal Reserve is monitoring the tariff situation with a big focus on inflation. The rate of inflation has been stubbornly sitting just above the central bank's target of 2%. In a report Friday, its preferred gauge, the personal consumption expenditures index, rose to 2.3% in May. That's up from 2.2% the previous month. The Fed cut interest rates three times in late 2024 following a historic series of rate hikes to cool inflation. The PCE was as high as 7.2% in 2022 while the more commonly used consumer price index hit 9.1%. The Fed hasn't cut rates so far in 2025 over worries that tariffs could reignite inflation and hamper the economy. Economists still expect at least two rate cuts before the end of the year. Bond yields held relatively steady. The yield on the 10-year Treasury fell to 4.25% from 4.27% late Friday. The two-year Treasury yield, which more closely tracks expectations for what the Federal Reserve will do, stood at 3.73%. In other dealings early Monday, U.S. benchmark crude oil lost 31 cents to $65.21 per barrel. Brent crude, the international standard, gave up 20 cents to $66.60 per barrel. The U.S. dollar fell to 144.06 Japanese yen from 144.46 yen. The euro fell $1.1722 from $1.1725. Elaine Kurtenbach, The Associated Press
CTV News
2 hours ago
- CTV News
Canada cancelled its digital services tax. What was it and why did the U.S. hate it?
President Donald Trump, right, and Prime Minister Mark Carney participate in a session of the G7 Summit on Monday, June 16, 2025, in Kananaskis, Canada. (AP Photo/Mark Schiefelbein) OTTAWA — Tech giants such as Amazon and Google will not have to shell out close to $2 billion as expected today, as Canada moved to cancel the controversial digital services tax on Sunday, just one day before the first payment was due. The announcement from Finance Minister François-Philippe Champagne came late Sunday evening, following a phone call between Prime Minister Mark Carney and U.S. President Donald Trump. That call concluded a flurry of discussion between the two countries since Trump suddenly announced on Friday afternoon that he was ending all trade talks with Canada and threatened new tariffs. But the standoff had really been building for years. Here's a brief look at what the tax was about and why Trump made such a drastic move to try and kill it. What is the digital services tax? The tax was announced in 2020, but the legislation to enact it didn't pass until last year. While it has been in effect for a year, the first payment, retroactive to 2022, was to be submitted on June 30. The government intended it to overcome what Canada saw as a tax loophole, with big tech companies operating in Canada digitally, making money off Canadian users and data, but not paying tax on it in Canada. The tax was to apply to companies that operate online marketplaces, online advertising services and social media platforms, and those that earn revenue from some sales of user data. It meant companies such as Amazon, Google, Meta, Uber and Airbnb, would pay a three-per-cent levy on revenue from Canadian users. The tax was only to cover large companies, those that have worldwide annual revenues greater than 750 million euros per year and Canadian digital services revenue greater than $20 million per year. The parliamentary budget officer had estimated it would bring in $7.2 billion over five years. Because the first payment was retroactive to cover three years, the expectation was the companies collectively could be on the hook for an initial payment of around US$2 billion. Why did Canada impose it? Work has been underway for years at the Organization for Economic Co-operation and Development to set up a multilateral tax approach meant to replace digital service taxes imposed by individual countries. But after that work stalled, Canada went ahead with its own tax. Other countries, including France and the United Kingdom, also have digital taxes. The Liberals had long maintained Canada would go ahead on its own if the OECD deal fell through. In a 2024 release, the government said while 'Canada's priority and preference has always been a multilateral agreement,' many of Canada's allies have digital services taxes in place. 'Canada has been at a disadvantage relative to these countries which have continued collecting revenue under their pre-existing digital services taxes,' it said. Why do some oppose it? Critics of the tax took issue with Canada's refusal to wait for a global deal. They also opposed the retroactive application of the tax, which means companies will have to pay several years' worth of taxes at once. U.S. businesses and politicians argued the tax targets U.S. companies. The tax applied to all large tech companies no matter where they were based, but because so many of those companies are American, U.S. firms would have paid the bulk of the money. In a letter earlier this month, 21 members of Congress said U.S. companies will pay 90 per cent of the revenue Canada will collect from the tax, and that first payment will cost U.S. companies US$2 billion. That opposition isn't new. The Biden administration also pushed back against the tax, and the stance isn't isolated to Canada, with the U.S. also opposing digital service taxes imposed by other countries. Before the tax was rescinded on Sunday, the president of the American Chamber of Commerce in Canada said its 'members have been warning for years that this tax would become a flashpoint in the Canada-U.S. relationship. That moment has arrived.' The tax is 'retroactive, one-sided, and deeply damaging to cross-border trade,' Rick Tachuk said in an emailed statement, which encouraged Canada to cancel its tax. Michael Geist, Canada research chair in internet and e-commerce law at the University of Ottawa, wrote in a blog post Saturday the current conflict shouldn't come as a surprise. 'Canada pushed ahead despite efforts at an international agreement on the issue and later dismissed the increasing friction over the issue with the U.S., which has been signalling its opposition to the DST for many years,' he said. Geist said once Finance Minister François-Philippe Champagne confirmed on June 19 Canada would be going ahead with the tax, the government 'virtually guaranteed the U.S. would respond as it did.' Where does Trump come in? While opposition to the tax has been brewing south of the border for years, Trump escalated it abruptly Friday afternoon with an online post. He wrote he was 'terminating all discussions on trade with Canada' because of the tax and called it a 'direct and blatant attack on our country.' He also complained about Canada's dairy-sector protections that include high tariffs on imports of American milk and cheese. Canada and the U.S. have been in a trade war for months, triggered by Trump's imposition of tariffs. At the G7 summit in Alberta earlier this month, Carney and Trump agreed to work on reaching a deal by mid-July — work that Trump said was halted Friday. Friday afternoon, shortly after Trump's post went live, Carney told reporters he hadn't spoken to Trump that day but that 'we'll continue to conduct these complex negotiations in the best interests of Canadians.' So what happened on Sunday? A flurry of activity followed Trump's post on Friday, culminating Sunday night in the call between Trump and Carney. The decision opened the door for trade talks to restart, and Carney said in a statement, the overall results of those talks were paramount. '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,' he said. '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.' This report by The Canadian Press was first published June 30, 2025. Anja Karadeglija, The Canadian Press
