Latest news with #TradewithCanada
Hamilton Spectator
19 hours ago
- Business
- Hamilton Spectator
Mark Carney receives praise, blowback after he ‘caved' to Donald Trump's demand to scrap tech tax
OTTAWA–Prime Minister Mark Carney is facing praise and blowback for his decision to ditch the government's digital services tax, a move that on Monday revived trade talks between Canada and the U.S., but opened the Liberals up to accusations of bowing to U.S. President Donald Trump. 'It's very simple. Prime Minister Carney and Canada caved to President Trump and the United States of America,' White House Press Secretary Karoline Leavitt said Monday afternoon. 'It was a mistake for Canada to vow to implement that tax,' Leavitt said, adding that Carney spoke to Trump Sunday about dropping the measure, which would have required a number of American tech giants to submit their first payments on Monday. Prime Minister Mark Carney says Canada and the U.S. have restarted negotiations aiming again to reach a deal by July 21. He says Canada cancelled the digital services tax because it was part of the negotiation and wouldn't make sense to collect the tax and then have to refund them later. (June 30, 2025 / The Canadian Press) Carney, speaking briefly to reporters later that afternoon, confirmed negotiations between both countries had resumed but did not respond to a question about the accuracy of the White House's framing that he 'caved' during the call. The prime minister said he made the concession as 'part of a bigger negotiation,' pointing to the agreement he hopes to reach with the Trump administration to resolve the broader trade dispute by July 21. 'It doesn't make sense to collect tax from people and then…remit them back, so it provides some certainty. And as I just said, negotiations have restarted. We're going to focus on getting the best deal for Canadians. We're making progress,' Carney said. Two days earlier, talks between both countries were put on ice after Trump said he was 'terminating ALL discussions on Trade with Canada' due to the 'egregious' tax. By Sunday night, Canadian officials announced that the measure, a policy the Liberals had championed for years under former prime minister Justin Trudeau, would be scrapped. A government press release said Finance Minister Francois-Philippe Champagne had cancelled the planned June 30 collection of the tax, and that he would introduce legislation to formally rescind the measure. The digital services tax was enacted in 2024, though it was retroactive to 2022 and set to come into effect this year. It would have imposed a three–per-cent tax on certain domestic and foreign tech giants earning more than $20 million in revenue from digital services, like social media and online advertising services, that require the engagement, data and content contributions of Canadians to operate. Companies that also sold or licensed Canadian user data were also captured by the policy. The Parliamentary Budget Officer estimated in 2023 that the tax would boost Ottawa's revenues by $7.2 billion over five years. But the tax has long served as a trade irritant between Canada and the U.S., prompting fears that it would spark, or be used as a wedge, in a future trade war. Major Canadian business organizations also strongly opposed the measure, warning that the tax would ultimately be passed on to Canadian consumers, businesses, and investors through higher costs. 'Now, with it off the table, we think it's going to lower taxes for Canadians. It's going to make some of their services more cost-effective, but it also sends a signal that we're a good place to do business,' David Pierce, the vice-president of government relations for the Canadian Chamber of Commerce, told the Star. Carney's move also won support from the Council of Canadian Innovators (CCI), an association that previously backed the measure as 'a necessary tool to ensure global technology giants contribute their fair share in Canada.' CCI president Benjamin Bergen said in a statement that dropping the tax was a 'strategic move' he hoped would 'renew dialogue' with the U.S. The Computer & Communications Industry Association, an international trade organization, also lauded Canada for walking back a tax the group has long said unfairly targets U.S. exporters. 'We urge other governments that have proposed or enacted DSTs, including the U.K., France, Germany, Italy and Pakistan, to follow suit and commit to fair, reciprocal international tax principles,' wrote CCIA president Matt Schruers. While the Liberals had been pushing for a multilateral tax approach through the Organization for Economic Co-operation and Development, work on that front eventually stalled, prompting Canada to chart its own path forward in the interim. Taylor Owen, director of McGill's centre for media, technology and democracy, said that the U.K. was able to keep its own digital services tax, despite Trump's opposition to the policy, while also signing a trade deal with the U.S. 'It probably shows more than anything that we need new digital governance coalitions that don't include the U.S., but are designed to collectively act in order to pressure the U.S.,' Owen told the Star. On Monday, Conservative Leader Pierre Poilievre called out the Liberals for abandoning their previous support for the measure at the '11th hour,' while interim NDP leader Don Davies said 'abandoning fair taxation of tax giants is unacceptable appeasement.' 'We really are back to square one with the operations of these companies. You know, tens of billions of dollars of revenue, effectively untaxed in Canada,' Keldon Bester, executive director of the Canadian Anti-Monopoly Project told the Star. 'So I think from a negotiating perspective, as well as a tech policy perspective, it's quite disappointing,' Bester said, adding that other legislation regulating American tech giants, like Canada's online streaming and online news laws, could get tangled up in the trade war next. Allison Christians, the Stikeman chair in tax law at McGill University, said U.S. companies hold immense control over information and media in Canada. 'At some point, you just lose control over a society that you want because your economic prospects depend on a volatile, unreliable trade partner that just changes the deal whenever they want,' Christians said. 'So whatever we do, Trump might come up with something next week that he also doesn't like. And then what? What are we giving up next?'
The Market Online
2 days ago
- Business
- The Market Online
@ the Bell: Canada drops tech tax to revive U.S. trade talks
Canada's main stock index clocked a new record high on Monday, lifted by renewed trade discussions between Washington and Ottawa that lifted investor sentiment. Late Sunday, Canada withdrew its planned digital services tax—set to target major US tech companies—just hours before it was scheduled to take effect. The move was aimed at reviving stalled trade talks with the United States. According to the federal finance ministry, Prime Minister Mark Carney and US President Donald Trump are expected to resume negotiations, with a goal of reaching a deal by July 21. Trump had abruptly halted the talks on Friday, calling the tax a 'blatant attack' on American firms. US markets also rallied, as optimism around trade talks added to a strong month for Wall Street, pushing stocks toward new record highs. Monday's gains followed Canada's decision to cancel the digital services tax, which had prompted Trump to announce on Friday that the US was 'terminating ALL discussions on Trade with Canada.' The tax, which was set to take effect Monday, would have impacted companies like Alphabet's Google (NASDAQ:GOOGL), Meta (NASDAQ:META), and Amazon (NASDAQ:AMZN). The Canadian dollar traded for 73.32 cents US compared to 72.86 cents US on Friday. US crude futures traded $0.51 lower at US$65.01 a barrel, and the Brent contract lost $0.14 to US$67.63 a barrel. The price of gold was up US$18.74 to US$3,293.72. In world markets, the Nikkei was up 336.60 points to ¥40,487.39, the Hang Seng was down 211.87 points to HK$24,072.28, the FTSE was down 37.95 points to ₤8,760.96, and the DAX was down 123.61 points to €23,909.61. The material provided in this article is for information only and should not be treated as investment advice. For full disclaimer information, please click here. Stockhouse does not provide investment advice or recommendations. All investment decisions should be made based on your own research and consultation with a registered investment professional. The issuer is solely responsible for the accuracy of the information contained herein.
NBC News
3 days ago
- Business
- NBC News
Canada rescinds Digital Services Tax after Trump cuts off U.S. trade talks
Canada has walked back on its digital services tax 'in anticipation' of a mutually beneficial comprehensive trade arrangement with the United States, Ottawa announced Sunday night, just one day before the first tax payments were due. The move comes after U.S. President Donald Trump announced over the weekend that he will be 'terminating ALL discussions on Trade with Canada ' in response to Ottawa's decision to impose a digital services tax on American tech firms. '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,' Canadian Prime Minister Mark Carney said in the statement. The first payments from Canada's digital services tax, which was enacted last year and applies retroactively to 2022, were initially set to be collected Monday. The tax would have applied to both domestic and foreign tech companies, including U.S. giants such as Amazon, Google and Meta with a 3% levy. This decision from Ottawa was an about-turn from Canadian officials earlier this month, who said they would not pause the digital services tax, despite strong opposition from the U.S. Canada's Minister of Finance and National Revenue Francois-Philippe Champagne added, 'Rescinding the digital services tax will allow the negotiations of a new economic and security relationship with the United States to make vital progress and reinforce our work to create jobs and build prosperity for all Canadians.' However, the statement from Canada's finance ministry also said that Carney 'has been clear that Canada will take as long as necessary, but no longer, to achieve that deal.' The digital services tax was first introduced in 2020 to address a taxation gap where many large tech companies were earning significant revenues from Canadians, but were not taxed. Ottawa also said that the tax was enacted while it worked with international partners — including the U.S.— on a multilateral agreement that would replace national digital services taxes. Shortly after Trump said that the U.S. was 'terminating ALL discussions on Trade with Canada,' Treasury Secretary Scott Bessent told CNBC's Morgan Brennan that U.S. Trade Representative Jamieson Greer would be investigating the tax to 'determine the amount of harm to the U.S. companies and the U.S. economy in general.' 'Canada has this digital services tax. And several other countries do too. We disagree, and we think that they discriminate against U.S. companies,' Bessent said on CNBC's 'Closing Bell: Overtime.' 'Several countries within the European Union have digital service taxes. None of them have done those retroactively,' Bessent added.
CNBC
3 days ago
- Business
- CNBC
Canada rescinds Digital Services Tax after Trump cuts off U.S. trade talks
Canada has walked back on its digital services tax "in anticipation" of a mutually beneficial comprehensive trade arrangement with the United States, Ottawa announced Sunday night. The move comes after U.S. President Donald Trump announced over the weekend that he will be "terminating ALL discussions on Trade with Canada" in response to Ottawa's decision to impose a digital services tax on American tech firms. The statement from Canada said that Prime Minister Mark Carney and Trump have agreed that they "will resume negotiations with a view towards agreeing on a deal by July 21, 2025."
