LILLEY: Carney puts Canadian jobs at risk over foolish tax idea
Canadian jobs are now on the line over a foolish move to bring in a Digital Services Tax that is angering all sides in the United States.
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Mark Carney has decided to put Canadian auto jobs, manufacturing jobs, and the whole steel and aluminum industry at risk over a yet-to-be implement tax. It’s a foolish move for the Liberals from both an economic point of view and from a negotiation standpoint.
On Friday, Donald Trump announced that trade talks with Canada, the ones to try and ease the tariffs, were off. The reason, Carney’s insistence on pushing ahead with a Digital Services Tax that comes into effect next week.
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It will require big tech companies like Apple, Uber, Amazon and others to pay 3% of their revenue from Canada — that’s revenue, not profit — to the Canadian government. It also comes with a retroactive payment of roughly $3 billion for the American tech companies to cover the period going back to 2022.
The bill imposing this legislation and the retroactive payments to 2022, only passed Parliament on June 20, 2024.
No wonder President Trump calls this legislation unfair. Trump, like Biden before him, has been asking us to drop this tax, which both sides in America believe violates CUSMA, and we have refused to budge so now, he’s walking away from talks.
“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. Thank you for your attention to this matter!” Trump posted to his Truth Social account.
Speaking with reporters in the White House during a signing ceremony on Friday, Trump was blunt at times when asked about Canada. At first, Trump batted away a question about trade with Canada noting that the ceremony was about a peace deal between Rwanda and the Democratic Republic of Congo.
Moments later, he made his views clear.
“Canada put a charge on some of our companies and Canada has been a very difficult country to deal with over the years,” Trump said.
“Economically we have such power over Canada. I’d rather not use it,” Trump said. “It’s not going to work out well for Canada. They were foolish to do it.”
Foolish is correct because this means tariffs stay in place, jobs are put at risk and Canada suffers.
It’s not just voices in Washington saying that, it’s coming from business groups and provincial premiers as well. Various industry groups have been warning the government that this was the wrong path to take and the Business Council of Canada had come out strongly against the tax.
“In an effort to get trade negotiations back on track, Canada should put forward an immediate proposal to eliminate the DST in exchange for an elimination of tariffs from the United States,” BCC president and CEO Goldy Hyder said after Trump’s announcement.
Last October, when it still looked like Kamala Harris and the Democrats would be the likely winner of America’s November election, Ontario Premier Doug Ford was calling for the DST to be scrapped. Speaking to the Empire Club in Toronto, Ford said the tax threatened Canadian jobs.
“I talk to Democrats, I talk to Republicans, and they are furious,” Ford said.
“We cannot put millions of Canadian jobs in our historic economic partnership with the U.S. at risk because of a stubborn refusal to listen to the concerns of our American friends,” Ford added. “The federal government needs to pause the implementation of the digital services tax.”
The Carney Liberals, much like the Trudeau Liberals refuse to listen to the Americans when they have issues with us on trade, but we expect them to listen to us. The Liberals seem to think this is a one-way conversation where we talk, they listen, and we get what we want.
I’ve been hearing for months that we haven’t caved on the DST because we are holding out to get something in return for dropping it. The tax comes into effect Monday, we have refused to drop it and we have gotten nothing in return.
This isn’t a Mark Carney elbows up moment; this is a complete and utter failure that anyone paying attention could have predicted.
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