Canada Removes Digital Services Tax on Big Tech After Trump Threatened to End Trade Talks

Canada is no longer levying the Digital Services Tax (DST) which it imposed against Big Tech companies starting last year, with the country set to collect the first payments. This was removed after Donald Trump threatened the country by ending the trade talks between both nations because of the DST, calling it an attack on the US.

Canada Removes Digital Services Tax vs. Big Tech

The Canadian government announced that its Department of Finance is now rescinding the Digital Services Tax imposed against the Big Tech companies. This means that the first supposed payments to be collected from Big Tech companies were no longer collected on its June 30 deadline.

According to the country's statement, this Digital Services Tax was previously enacted to address the taxation gap as the country replaced its national digital services taxes.

Canada's Minister of Finance and National Revenue, François-Philippe Champagne, will soon "bring forward the legislation" that will officially rescind the Digital Services Tax Act.

Should the DST continue, it would have taxed the Big Tech companies a collective sum of $2 billion, according to Engadget.

Trump Threatened to End Trade Talks Due to DST

President Trump previously threatened to end the trade talks with Canada as the DST's first collection of payments would take effect on June 30, voicing out his frustration in this "blatant attack on our Country" and to American Big Tech via a Truth Social post.

Shortly after rescinding the DST, President Trump and Canada's Prime Minister Mark Carney have agreed to resume their comprehensive trade agreements between both nations.

Canada and US Relationship Under Trump

The DST was proposed in 2020 and only took effect last year, effectively affecting many American companies like Apple, Google, Meta, Microsoft, and more, with US lawmakers rallying against the law.

Tensions between both countries also took a turn for the worse because of President Trump's tariffs of all imported goods coming to the US, including everything coming from the Canadian border.

Because of this, Canada and the different companies based there began divesting Starlink earlier this year as retaliation against President Trump's tariffs.