Latest news with #FrançoisPhilippeChampagne
National Post
9 hours ago
- Business
- National Post
BREAKING: Trump 'terminating' trade talks with Canada over digital services tax
Article content OTTAWA — U.S. President Donald Trump announced Friday he is putting an end to trade discussions with Canada because of the digital services tax moving ahead next week. Article content Trump made the announcement on his social media network, Truth Social. Article content Article content '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,' he wrote. Article content Article content '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.' Article content Article content The first payment for Canada's digital tax is due Monday, according to the Finance department, and covers revenue retroactively to 2022. The tax is three per cent of the digital services revenue a firm makes from Canadian users above $20 million in a year. Earlier this month, Finance Minister François-Philippe Champagne said his government was moving ahead with the tax even though it remained an irritant with the United States. Article content 'That's the law in Canada. We had fairly long, extensive discussions at the G7 about the different regimes that you find in different parts of the world. That's not unique to Canada, by the way,' he said. Article content The prime minister's office did not immediately issue a comment about Trump's latest statement. Article content More details to follow… Article content — With files from Christopher Nardi and Bloomberg. Article content
CBC
2 days ago
- Business
- CBC
Trump's 'revenge tax' on other countries could hit U.S.
Social Sharing A controversial tax being proposed by President Donald Trump's administration that could cost Canadians and Canadian businesses billions is also likely to cost the U.S. government, according to an assessment by a non-partisan U.S. congressional office. It is also likely to cost American companies by prompting investors from countries hit with the tax to move investments out of the U.S, according to the assessment. Dubbed the "revenge tax," Section 899 of Trump's One Big Beautiful Bill Act calls for a new withholding tax to be imposed on investment income paid out by American companies to investors who live in countries the U.S. government considers to have unfair or discriminatory taxes. Canada's digital services tax, which hits companies like Amazon, Google, Meta, Uber and Airbnb with a tax on revenue from Canadian users, is among the taxes the U.S. considers discriminatory. Top Canadian officials acknowledge privately that they are concerned by the prospect of Trump's new withholding tax and are closely watching what is happening in Washington — as are Canadian investors, companies, investment advisors and tax lawyers. Digital services tax in crosshairs Federal Finance Minister François-Philippe Champagne says he's standing by the tax — which has its first big payment due June 30. "The DST is in force and it's going to be applied," he told reporters on Parliament Hill last week. Two different versions of Section 899 are currently before Congress, but both versions risk hitting Canadians and Canadian companies with a new withholding tax. The version adopted by the House of Representatives would take effect quickly and impose a five per cent withholding tax on things like dividends to Canadians from U.S. companies, adding another five per cent each year to a maximum of 20 per cent. An amendment to that section, currently before the Senate, would delay the tax until 2027 and would top it out at 15 per cent. The Senate has not yet voted on the bill, although it is being pressured by Trump to approve the legislation by July 4, the U.S. national holiday. A study of Section 899 by the U.S. Congress's non-partisan Joint Committee on Taxation (JCT), which performs a function similar to Canada's Office of the Parliamentary Budget Officer, predicts that the new tax would initially bring billions into the U.S. Treasury. However, it also predicts those revenues would then start to decline — and that by 2033 or 2034 it would actually lead to a drop in revenue. The version of Section 899 adopted by the House of Representatives is expected to rake in an estimated $116.3 billion US between 2025 and 2034 for the U.S. Treasury, with $12.5 billion US in 2026 rising to $28.7 billion US in 2027 and $31.8 billion US in 2028. However, the analysis projects that revenues would then start to decline. By 2033, the withholding tax is projected to cost the U.S. Treasury $4.8 billion US in lost revenue and, by 2034, $8.1 billion US. The amended version of Section 899 is projected to bring in only $52.2 billion US between 2025 and 2034. But by 2034 it too would cost the U.S. government $2.5 billion US in lost revenue. A source familiar with the JCT's work said its analysis assumes that the U.S. gross national product will remain fixed and foreign laws, like the DST, will not change. What it assumes will change, however, is the behaviour of individuals and companies to avoid the withholding tax. The JCT projects that the reduction in demand for direct and portfolio investment on the part of foreign investors will reduce the value of U.S. assets. In turn, that drop in value will lead to a loss in tax revenue for the U.S. Treasury. David Macdonald, senior economist with the Canadian Centre for Policy Alternatives, said the JCT's analysis makes a very big assumption — that countries like Canada won't hit back at the U.S. with their own retaliatory taxes. He said the ongoing trade war has shown that Canada is willing to hit back. Should Canada retaliate, Macdonald said the U.S. is more exposed than Canada on the tax front because a lot of American companies operate here. "They make a lot more profits in Canada than Canadian companies make in profits operating in the U.S.," Macdonald said. Macdonald agreed with the JCT's assessment that the withholding tax could prompt an exodus of investment in U.S. securities, predicting that many companies are probably already figuring out ways to hedge their investments. He said this is bad for business and risks damaging the economies of both countries. "Nobody wins a trade war and nobody wins a tax war," said Macdonald.
CTV News
3 days ago
- Business
- CTV News
Ottawa won't release its budget for Canada Day festivities in the capital
A construction crane is seen as a cloud of smoke hovers above the ground during a fireworks show on Canada Day in Ottawa on Monday, July 1, 2024. THE CANADIAN PRESS/Justin Tang OTTAWA — The federal government has set a budget for Canada Day programming in the National Capital Region this year but is refusing to say what it is. The budget for Canada Day celebrations in Ottawa and across the river in Gatineau, Que., typically ranges in the millions of dollars and pays for things like fireworks displays, performances and national broadcasts. A spokesperson for Heritage Canada said in a statement that while there is a budget for the events, the department won't provide the number until after the celebrations are over. 'To ensure the most accurate information is made public, the total cost will be available upon request after the final tallies have been completed this summer,' the spokesperson said. Neither Heritage Minister Steven Guilbeault nor Finance Minister François-Philippe Champagne responded to requests for comment about the budget for Canada Day this year. This is the first Canada Day since U.S. President Donald Trump threatened to annex the country and embroiled much of the world in a trade war. Angus Reid polling from early in the trade dispute in February showed a jump in national pride in the face of Trump's '51st State' talk. Some 44 per cent of respondents said at the time they were 'very proud' to be Canadian — up 10 points since just a few months earlier and reversing a long trend of declining national pride tracked by the pollster. A wave of 'buy Canadian' sentiment followed after the U.S. levied tariffs against Canada. A late May poll from Research Co. suggested three in five Canadians were still avoiding buying American goods when they could, though that was down four percentage points from a poll in March. Because the Angus Reid and Research Co. polls were conducted online, they can't be assigned a margin of error. In recent years, Heritage Canada has spent between $4.25 million and $5.5 million on July 1 festivities in the National Capital Region. Those figures fell below $3 million in 2020 and 2021 as the event went virtual during the COVID-19 pandemic. For the Canada 150 celebrations in 2017, the federal government spent more than $9 million over the course of three days that featured a royal visit from King Charles and Queen Camilla, who were the Prince of Wales and Duchess of Cornwall at the time. This report by The Canadian Press was first published June 25, 2025. Craig Lord, The Canadian Press
Yahoo
4 days ago
- Business
- Yahoo
Canada's digital services tax is 'needlessly inflammatory' during trade talks with U.S.
Canada's implementation of a digital sales tax on foreign technology companies at the end of June could exacerbate tensions during key trade negotiations with the United States, say business leaders on both sides of the border. 'At this current time with a trade war and an active negotiation coming out of the G7, it just seems needlessly inflammatory,' Matthew Holmes, executive vice-president and chief of public policy at the Canadian Chamber of Commerce, said. 'We're not arguing for the government to make concessions that won't help realize a resolution to the trade conflict, but it does seem like it could lead to a worse outcome.' The digital services tax, which became law last year, applies a three per cent levy on revenue earned from digital services that rely on engagement, data and content contributions from Canadian users. It also applies to certain sales or licencing of Canadian user data. Finance Minister François-Philippe Champagne last week confirmed the tax would be going ahead at the end of this month, despite it being a major U.S. trade irritant. 'This was voted on by Parliament, so we're going ahead with the DST,' he said on Thursday. On June 30, businesses will have to make their first payments retroactive to Jan. 1, 2022. Most of the revenue will be collected from U.S. tech giants. The DST was first challenged by the Joe Biden administration, with former U.S. trade representative Katherine Tai launching dispute settlement consultations under the Canada-United States-Mexico Agreement (CUSMA) last August. Since then, Donald Trump's administration has renewed its focus on what it views as unfair fines and levies on U.S. companies from foreign countries. In January, Trump also removed the U.S. from the Pillar One Reform by the Organization of Economic Co-Operation and Development that is trying to settle global taxing rights for cross-border digital services. Current U.S. trade representative Jamieson Greer also mentioned the DST in a list of trade irritants with Canada in a March 1 report on foreign trade barriers. Other countries, including France, Italy and the United Kingdom, have implemented their own digital sales taxes. The Canadian federal government and the Trump administration are currently in talks on a new economic and security deal, with a deadline of July 21. Most Canadian goods are exempted from tariffs imposed by Trump, but there remains a 25 per cent levy on cars and a 50 per cent tariff on steel and aluminum. Asked if the federal government is considering a pause on the DST in the context of trade discussions with the U.S., Champagne said 'all of that is something that we're considering as part of broader discussions.' On June 13, 21 Republican lawmakers from the U.S. House of Representatives sent a letter asking Trump to get the tax removed during trade negotiations with Canada or to retaliate if the tax is implemented. 'If Canada decides to move forward with this unprecedented, retroactive tax, it will set a terrible precedent that will have long-lasting impacts on global tax and trade practices,' the letter said. 'We are confident that any Digital Sales Tax Act collections will be met with a swift U.S. government response.' The letter said Canada's DST will cost U.S. tech companies $2 billion in retroactive taxes and $2.3 billion annually going forward. One of the signatories, Congressman Ron Estes, said the tax is discriminatory and a 'shakedown' of primarily U.S. tech companies. 'It is absurd to think that the United States would simply sit idly by while our allies retroactively target our innovators and treasury, and it is further proof that the United States must implement common sense measures like Section 899 in our recently passed House budget reconciliation bill,' Estes said in a statement. Section 899 seeks to tax foreign investment from countries Trump believes have unfair foreign taxes on American companies. The bill is currently making its way through the U.S. Senate. Graham Davies, chief executive of the Washington, D.C.-based Digital Media Association, which represents music streaming services, said the DST is coming at a time when tech companies are also being asked to pay another tax under Canada's recently passed Online Streaming Act. 'In terms of their concerns, it's the combination of having the digital services tax, which has already raised concerns in terms of the bilateral relationship between Canada and the U.S., added onto that the Online Streaming Act, which adds another five per cent in tax,' he said. Should Canada target Big Tech in trade war negotiations with the U.S.? Will Canada's Digital Services Tax survive Trump's tariffs assault? Holmes said most tech companies will end up downloading the costs of the DST onto Canadian companies that run businesses on their platforms and, ultimately, consumers. 'We have from the very beginning said this will be inflationary,' he said. 'As more businesses and as more of our lives include digital transactions, this will just add to the affordability crisis.' • Email: jgowling@ Sign in to access your portfolio
CBC
19-06-2025
- Business
- CBC
Canada won't delay digital services tax during U.S. trade negotiations, says finance minister
Canada won't put a hold on the digital services tax on big tech companies set to take effect on June 30, the finance minister said Thursday. Pressure has mounted on Ottawa to hold off while the government is in trade discussions with the U.S., which opposes the tax. Finance Minister François-Philippe Champagne said the legislation was passed by Parliament, and Canada is "going ahead" with the tax. "The [digital services tax] is in force and it's going to be applied," he told reporters before a cabinet meeting on Parliament Hill. The digital services tax will hit companies like Amazon, Google, Meta, Uber and Airbnb with a three per cent levy on revenue from Canadian users. It will apply retroactively, leaving U.S. companies with a $2-billion US bill due at the end of the month. A June 11 letter signed by 21 members of Congress said U.S. companies would pay 90 per cent of the revenue Canada collects from the tax. Canadian and U.S. business groups, organizations representing U.S. tech giants and American lawmakers have all signed letters in recent weeks calling for the tax to be eliminated or paused. It is set to take effect just weeks before a deadline Canada and the U.S. have set for coming up with a new trade deal. The Canadian Chamber of Commerce and other organizations have warned retaliatory measures in a U.S. budget bill could hit Canadians' pension funds and investments. Champagne said Canada isn't the only country that could be affected by those retaliatory measures. "These are discussions at the global level," he said in French. Champagne said there's a wider discussion going on among G7 nations about tax regimes. David Pierce, the Canadian Chamber of Commerce's vice-president of government relations, said in an earlier interview his organization fears Canada could "aggravate an already very tricky trade discussion" if it goes ahead with the tax and the retroactive payment requirement. The Liberals first promised the tax in the 2019 election, but it was delayed for years due to global efforts to establish a broader, multinational digital taxation plan.
