Canada has abandoned its planned 3% digital services tax set to hit tech giants like Meta, Google, and Amazon just hours before its scheduled implementation on June 30. The move comes as a diplomatic olive branch to revive stalled trade negotiations with the United States, following U.S. President Donald Trump’s reaction, who branded the tax “a direct and blatant attack on our country.”
Finance Minister François‑Philippe Champagne stated that scrapping the levy “will allow the negotiations of a new economic and security relationship with the U.S. to make vital progress.” Prime Minister Mark Carney confirmed the decision supports resuming talks ahead of the July 21 G7 deadline. Trump had abruptly terminated trade discussions via Truth Social, citing the tax as the catalyst, but both leaders have now agreed to restart negotiations.
The DST, introduced in June 2024 and retroactive to 2022, was projected to raise approximately C$7.2 billion over five years. Critics ranging from business groups to international partners warned it risked harming Canada’s economic relationship with its largest trading partner. With the tax now repealed, both nations aim to negotiate a comprehensive deal that reinforces economic stability and prosperity on both sides.
