OTTAWA: Canada scrapped its digital services tax targeting United States technology firms late on Sunday (Jun 29), just hours before it was due to take effect, in a bid to advance stalled trade negotiations with the US.
Canadian Prime Minister Mark Carney and US President Donald Trump will resume trade negotiations in order to agree on a deal by Jul 21, Canada’s finance ministry said in a statement.
Trump abruptly called off trade talks on Friday over the tax targeting US technology firms, saying that it was a “blatant attack”.
He reiterated his comments on Sunday, pledging to set a new tariff rate on Canadian goods within the next week, which threatened to push US-Canada relations back into chaos after a period of relative calm.
The breakdown in trade talks comes after the two leaders met at the G7 in mid-June and Carney said they had agreed to wrap up a new economic agreement within 30 days.
Canada’s planned digital tax was 3 per cent of the digital services revenue a firm takes in from Canadian users above US$20 million in a calendar year and payments were to be retroactive to 2022.
It would have impacted US technology firms, including Amazon, Meta, Alphabet’s Google and Apple, among others.
