Less than 48 hours before the country was set to come together and celebrate its sovereignty in the face of ongoing annexation threats from the White House, the federal government dropped a bombshell.
CLICK HERE TO LISTEN TO 1130 NEWSRADIO VANCOUVER LIVE!Ottawa announced on Sunday evening it was rescinding the digital services tax (DST) — a levy used as an excuse by U.S. President Donald Trump last Friday to halt trade talks with Canada. He described it as “egregious,” adding “economically we have such power over Canada.” Trump also called it a “blatant attack,” before eventually regressing to his usual threats of raising tariffs and making Canada the 51st state.
The move, however, is not sitting well with many Canadians from coast to coast. Some people taking their anger out on the federal government’s page on X (formerly Twitter) and many posing the same question: “What do I do with my elbows now????!!!!”
That’s a reference to the wave of patriotism this country has seen since Trump took office, again, and started going after Canada’s economy and independence. The sentiment around elbows was echoed by others on social media.
The tax, which would have gone into effect on June 30, would have meant big tech giants like Google, Meta, Apple and Amazon would face a three per cent charge on Canada revenue above $20 million. There were estimates the tax would have cost these companies, which have close ties to Trump, more than $2 billion a year.
Stewart Prest, a political science professor at the University of British Columbia, says he is not sure Carney’s move was the right one when the other party is as unpredictable as the Trump administration.
Prest notes that Trump tore up the North American Free Trade Agreement (NAFTA) to replace it with the Agreement between the United States of America, the United Mexican States, and Canada (USMCA) – but now he says that this agreement is not good either.
“There are no guarantees that making concessions to get to a new ‘comprehensive agreement’, that that agreement will not be simply put aside as soon as it’s convenient for the Trump administration in a few years, a few months, few weeks time,” says Prest.
Prest adds Trump brought back his comments about Canada becoming the 51st American state when this disagreement when public.
“That does seem to be the pattern, and I don’t even know if it is used as a threat to try to intimidate Canada, so much as a way to humiliate Canada’s leadership,” Prest explains.
“The DST was announced in 2020 to address the fact that many large technology companies operating in Canada may not otherwise pay tax on revenues generated from Canadians,” said federal Finance and Revenue Minister François-Philippe Champagne, in a statement.
“Canada’s preference has always been a multilateral agreement related to digital services taxation. While Canada was working with international partners, including the United States, on a multilateral agreement that would replace national digital services taxes, the DST was enacted to address the aforementioned taxation gap.”
With the tax out of the way, for now, the goal is to resume talks and for both countries to reach new terms by July 21, a timeline Prime Minister Mark Carney said was revealed at the G7 Summit in Kananaskis, Alta., earlier this month.
That date is also three weeks after Carney had promised to tear down interprovincial trade barriers, which was supposed to happen on July 1. The federal Liberals recently passed legislation to usher those changes into law, but don’t expect things to flow freely across the country come Canada Day.