Carney drops digital services tax, LNG Canada starts exports to Asia and auto CEOs ask for EV mandate changes: Business and investing stories for the week of July 6

Globe and Mail

7 hours ago

Getting caught up on a week that got away? Here's your weekly digest of The Globe's most essential business and investing stories, with insights and analysis from the pros, stock tips, portfolio strategies and more.
Prime Minister Mark Carney briskly walked back Canada's digital services tax (DST) on foreign tech giants after U.S. President Donald Trump ended trade talks. The White House said that Mr. Carney 'caved' during a Sunday phone call with Mr. Trump and negotiations would resume between the two countries. Speaking to reporters in Ottawa, Mr. Carney declined to explain what Canada received in return for scrapping the tax, but said Canada and the U.S. aim to have a deal by July 21.
The digital services tax would have imposed a 3-per-cent levy on Canadian revenue exceeding $20-million earned by major tech companies such as Amazon, Google parent Alphabet, Meta, Uber and Airbnb with at least $1.1-billion in global revenue. This would have included revenue from search engines, social-media platforms and online marketplaces. The tax was enacted by Canada last year with the first payments due to be collected June 30, mere hours before Mr. Carney scrapped it.
This week, Prime Minister Mark Carney met with auto sector chief executives from Ford Canada, Stellantis Canada and General Motors of Canada as the Canadian and U.S. governments try to reach a trade deal that might end auto tariffs, among other levies. The CEOs are urging Ottawa to repeal federal regulations that require one in five vehicles (20 per cent) sold starting in 2026 to be zero-emission models. This rises to 60 per cent by 2030 and 100 per cent by 2035.
As Steven Chase and Eric Atkins report, automakers warn that electric-vehicle sales in Canada are waning this year and it would be impossible to reach the zero-emission vehicle (ZEV) mandate targets, especially with federal EV incentives for car buyers on pause. The automakers also say they won't be able to meet next year's target, and that consumers – not government – should decide what is available on the car lots. Canada is grappling with Mr. Trump's 50-per-cent tariffs on steel and aluminum, and a 25-per-cent tariff on autos.
Canada's trade deficit with the world narrowed in May, falling to $5.9-billion from a record $7.6-billion in April, according to Statistics Canada data. Tariffs continued to weigh on exports to the United States, Nojoud Al Mallees reports, already slowing down the Canadian economy. Forecasters expect the economy shrank in the second quarter, and for the trade challenges to continue exerting upward pressure on the jobless rate.
Still, the only thing that shimmered in Statistics Canada's latest release of trade numbers was soaring exports of unwrought gold, silver and platinum. The rise in prices for the shiny metals has increasingly skewed Canada's trade numbers. In fact, the country's trade deficit widened to $10.3-billion after stripping out imports and exports of the gold category. Jason Kirby takes a closer look at the numbers in this week's Decoder series.
A ship carrying the first load of liquefied natural gas from Canada's first LNG export terminal left for Asia earlier this week. The GasLog Glasgow departed from Kitimat, B.C., on Monday, embarking on a journey across the Pacific Ocean nearly seven years after the export terminal's construction began.
As Brent Jang reports, this moment ushers a new era in energy exports at a time when Canada seeks to diversify markets away from the United States. Once the Kitimat terminal's first phase is in full swing, there will be about 170 vessels a year transporting LNG to Asian markets. LNG Canada, whose largest partner is Shell with a 40-per-cent stake, is mulling expanding operations that could double the plant's capacity to 28 million tonnes a year. In contrast, the first LNG export facility in the U.S. mainland began operating in 2016, and another seven U.S. sites have opened since then. Climate activists and environmental think tanks say the world needs to focus on renewable energy, not on fossil fuels such as LNG.
The Southeast is booming. The region has been growing faster than the rest of the U.S. for quite some time, and its outperformance has ramped up since 2019, according to the Federal Reserve Bank of Atlanta. This power shift is highly relevant for Canadians, because while states close to the border might suffer from a trade war with Canada, all the growth in the Southeast could help the United States offset any tariff trauma. The boom in the Southeast has become a secret weapon in Trump's trade war, and it allows the White House to push the limits.
Tim Kiladze took a road trip through the region that has quietly become America's economic engine. He drove 500 kilometres through the U.S. Southeast – from Charlotte, to Charleston, to Savannah – talking to small business owners, bankers, industrial chief executive officers and everyday people.
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