Canada won't pause digital services tax despite pressure from U.S., finance minister says

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OTTAWA — 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 pause the tax ahead of trade discussions with the U.S.
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Finance Minister Francois-Philippe Champagne said Thursday the legislation was passed by Parliament and Canada is 'going ahead' with the tax.
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'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 tax 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 will pay 90 per cent of the revenue Canada will collect from the tax.
Canadian and U.S. business groups, organizations representing U.S. tech giants and American members of Congress have all signed letters in recent weeks calling for the tax to be eliminated or paused.
It's set to take effect just weeks before a deadline Canada and the U.S. have set for coming up with a new trade deal, following months of trade conflict between the two countries.
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Rick Tachuk, president of the American Chamber of Commerce in Canada, said the plan to go ahead with the tax 'undercuts those talks and risks derailing the agreement.'
'A retroactive tax like the DST, weeks before a new deal is supposed to be done, isn't a bargaining chip. It would likely be viewed as a provocation,' he said in an emailed statement.
The Canadian Chamber of Commerce and other organizations have warned retaliatory measures in a U.S. spending and tax 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 with the Americans' if it goes ahead with the tax and the retroactive payment requirement.
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Global News

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Winnipeg Free Press

2 hours ago

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Carney's approach to foreign policy features a major tilt toward Europe and might include more outreach in Asia and Africa ahead of summits he is set to attend this fall on both continents. While his government is heeding allies' calls for a steep increase in defence spending, it's also bucking an international trend by promising not to cut foreign aid. 'We are deeply committed to multilateralism over unilateralism, to global co-operation over increased protectionism,' Anand said. 'We must showcase Canada's values in terms of peace, safety of civilians, and respect for international law. But we're at a time where we also need to strategically advance our economic interests here at home, and to ensure that we have defence and security arrangements in place for the protection of our own country.' She said her ministerial background in defence, procurement, transport and the Treasury Board — which oversees all other departments' spending — gives her a unique perspective on how governments can actually follow through on their promises. At the recent G7 summit in Alberta, she had a front-row seat as Canada's closest peers drafted statements on topics ranging from artificial intelligence to transnational repression. The summit allowed her to meet face-to-face with both representatives of Ottawa's traditional allies and officials from emerging nations with increasing clout — including her Indian counterpart Subrahmanyam Jaishankar. The Carney government is moving to restore diplomatic relations with India — a controversial move, given the recent history between Ottawa and New Delhi. In 2023 and 2024, former prime minister Justin Trudeau and the RCMP said there was evidence linking agents of the Indian government to the murder of Canadian Sikh separatist activist Hardeep Singh Nijjar in Surrey, B.C., in June 2023. Last October, RCMP Commissioner Mike Duheme said the police force had evidence linking Indian government officials to other crimes in Canada, including extortion, coercion and homicide. The Canadian Security Intelligence Service identified India as one of the main drivers of foreign interference in a report it released this week. Anand said Ottawa is trying to restore parts of 'a long-standing relationship that has been put on hold for the last couple of years,' while respecting the law and institutions like the RCMP. 'The global strategic environment is very volatile and we need to carefully ensure that we are respecting the foundations of our democracy,' she said. Anand was born and raised in Nova Scotia by parents who immigrated from India. As a lawyer and professor in Toronto, she focused on the field of corporate governance — on how companies can reform the way they operate. Global Affairs Canada itself is under heavy pressure to change the way it works. The department launched a reform plan in February 2024 that included an admission that it can be 'slow to react or not focused enough' when major crises erupt, and that its staffing policies aren't keeping up with its growing responsibilities and tighter budgets. Things have only grown more complex since then, with Washington cutting back on foreign aid and moving closer to a revanchist Russia, while China pitches more trade with Canada and other countries. Canada has meanwhile promised to appoint new ambassadors across Africa and to open new embassies in Fiji and Benin, while somehow containing spending across government. Canada's critics have a history of claiming it's all talk when it comes to international relations. Trudeau was frequently criticized for raising human rights issues and inserting environmental policies in trade deals while failing to meet his government's defence spending targets or supply allies with liquefied natural gas. Foreign diplomats and departmental staff describe Anand as cautious, attentive and focused on results. While she's taking some time to get thoroughly briefed, she wants to deliver a lot — and soon. 'We have so much work to do and we cannot waste any time doing it,' she said. 'I am action-oriented myself and the prime minister knows this about me. And that's why we will make a good team on the foreign affairs front.' This report by The Canadian Press was first published June 20, 2025.