End of Digital Services Tax a win for consumers: advocacy group
The contentious tax prompted U.S. President Donald Trump to walk away from trade negotiations with Canada
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OTTAWA — Canada’s abrupt 180 on enacting its controversial Trudeau-era digital services tax is a win for consumers, one group claims.
In a statement issued late Sunday, the Consumer Choice Centre hailed Canada’s 11th-hour decision to scrap the Digital Services Tax (DST) as a win for consumers.
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“The tax was mostly going to be paid by large U.S. tech firms, who were undoubtedly going to increase prices on Canadian consumers to cover the tax burden,” said David Clement, the centre’s North American Affairs Manager.
“This is a fact echoed by the Parliamentary Budget officer who said that it is ‘expected that businesses in the targeted sectors will adjust their services and prices in response to the new law.’ Avoiding that scenario is a big win for Canadian consumers.”
After weeks of denials and days of silence, the Finance Department late Sunday night announced the contentious Trudeau-era policy — which requires non-Canadian digital services with annual incomes of more than $1.1 billion to pay a 3% tax on revenues from Canadian users exceeding $20 million.
Impacted companies include heavyweights like Amazon, Google, Facebook-parent company Meta, and Uber.
The decision to back away from the tax, according to the Finance Department statement, was made “in anticipation of a mutually beneficial comprehensive trade arrangement” with the U.S.
“Consistent with this action, Prime Minister Carney and President Trump have agreed that parties will resume negotiations with a view towards agreeing on a deal by July 21, 2025,” the statement read.
The tax, enacted a year ago via an order-in-council, was part of the Trudeau Liberal’s election platform since at least 2019.
Monday was supposed to be the first due date for that tax, with tech companies expected to pay it retroactively to 2022 — potentially resulting in a tax bill worth billions.
That deadline has also been rescinded, and legislation is coming to strike down the DST legislation.
The DST prompted U.S. President Donald Trump to walk away from trade talks with Canada
“Based on this egregious tax, we are hereby terminating all discussions on trade with Canada, effective immediately,” Trump posted to social media on Friday.
“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.”
Canada had little to say in response to Trump’s statement.
“The Canadian government will continue to engage in these complex negotiations with the United States in the best interests of Canadian workers and businesses,” read a one-sentence statement Friday from the PMO.
— With files from Jordan Ercit
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