Canada’s controversial digital services tax is officially off the table — for now.
On June 29, the federal government announced it would halt collection of the Digital Services Tax (DST) previously slated for June 30, paving the way for renewed negotiations with the United States on a broad economic and security partnership. Finance Minister François-Philippe Champagne confirmed the government will bring forward legislation to fully rescind the DST Act, ending a years-long standoff over taxing Big Tech revenues in Canada.
Prime Minister Mark Carney, speaking alongside Champagne, framed the move as critical to advancing trade talks with the U.S., saying Canada is committed to negotiating “as long as necessary, but no longer,” to secure the best deal for Canadian workers and businesses. Both governments now aim for a finalized agreement by July 21, 2025, building on commitments made at the G7 Leaders’ Summit in Kananaskis earlier this month.
GTA View: Jobs, Digital Economy, and Unfinished Business
The GTA, home to thousands of digital firms and media outlets, has watched the tax debate unfold since 2020, when the DST was introduced as a stopgap while global negotiations on taxing digital giants dragged on.
Critics say dropping the tax rewards Big Tech, while supporters argue protecting Canada’s broader trade relationship — particularly steel, aluminum, and auto exports — outweighs the modest DST revenue.
With Ottawa pushing to conclude a comprehensive agreement with the U.S. by July 21, industry groups in the GTA are calling for clarity on digital policy, data privacy rules, and future tech sector taxation once the deal is struck.
A Broader Security Pact in Sight
Beyond trade and tech, Carney’s government signaled the new deal will cover national security, joint responses to foreign interference, and critical infrastructure protections — key areas where Canadian and U.S. policy have clashed under previous administrations.
For Carney, the goal is not just to avert a trade fight, but to build a “durable economic and security partnership” that secures Canadian jobs and strengthens North American competitiveness.
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