Canada rescinds digital services tax, U.S. trade talks to resume

Canada is rescinding its digital services tax (DST) and will resume trade negotiations with the United States.

The announcement came late Sunday night in a statement issued from the Department of Finance Canada.

The news followed a phone call between Prime Minister Mark Carney and U.S. President Donald Trump, and was just hours before the first tax payment was due for tech companies, digital advertisers and social media platforms.

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.

Trump announced on Friday on Truth Social he was ending all trade discussions with Canada because of the tax.

“Today’s announcement will support a resumption of negotiations toward the July 21, 2025, timeline set out at this month’s G7 Leaders’ Summit in Kananaskis,” Carney said in the statement.

He added that Canada’s negotiations with the U.S. “will always be guided by the overall contribution of any possible agreement to the best interests of Canadian workers and businesses.”

Finance Minister François-Philippe Champagne spoke Sunday with U.S. Treasury Secretary Scott Bessent.

“Rescinding the digital services tax will allow the negotiations of a new economic and security relationship with the United States to make vital progress and reinforce our work to create jobs and build prosperity for all Canadians,” Champagne said.

Canada’s federal government estimated the tax would have brought in $7.2 billion over five years.

With files from the Canadian Press

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