EDITORIAL: Elbows down on the Digital Services Tax

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The only thing worse than Prime Minister Mark Carney rescinding the Digital Services Tax, two days after President Donald Trump threatened to shut down trade and security negotiations with the U.S. because of it, would have been not rescinding it.

Carney’s about-face made Canada look weak and we obtained nothing in return other than a resumption of the talks.

That sent a message to Trump that his brinkmanship tactics work. A tactic he could use again when it comes to the bigger issue of Canada’s supply management system for dairy, poultry and eggs, which the U.S. president has targeted for years.

That said, implementing the DST would have been worse, permanently derailing the chance of a negotiated settlement with the White House on trade and security.

This is over a tax on U.S. tech giants passed a year ago by the Justin Trudeau Liberals — unpopular with U.S. and Canadian business organizations — which would have cost Canadian taxpayers an estimated $7.2 billion over five years, as the tech giants passed along their increased costs to us.

Carney made the best of a bad situation inherited from the Trudeau government, even if it did mean another example of how, despite his “elbows up” election rhetoric, his negotiation tactics with Trump have been mostly “elbows down.”

To be fair, that’s not surprising, given that the U.S. economy is 10 times larger than our own.

It underscores the reality that if and when a deal between Canada and the U.S. is signed — before or after the self-imposed July 21 deadline agreed to by both countries — some of its provisions will be damaging to our economy.

That makes it even more important that our federal and provincial governments focus on issues they can control.

This includes the elimination of inter-provincial trade barriers, which involves a lot more than rescinding federal barriers to cross-Canada trade, which Parliament has now approved, given that many restrictions by the provinces remain in place.

It means green-lighting new oil and natural gas pipelines to get our vast oil and natural gas resources to tidewater, mining for valuable minerals in Canada’s Ring of Fire to reduce our dependence on China for them, along with other “nation-building” projects.