A Predictable Retreat- Canada Reversed Course on the Digital Services Tax

Warnings were clear from experts, industry, and trade partners—yet Ottawa moved forward. Now, with negotiations at risk and tariffs mounting, the government is walking back its digital tax policy.

It’s official—Canada just folded. The Trudeau-Carney DST, the retroactive digital tax on U.S. tech giants that triggered a full-blown trade crisis, is dead. Gone. Rescinded. And not because of some multilateral agreement or smart diplomacy. No. It’s gone because Donald Trump walked away, shut the door on trade negotiations, and dared Canada to blink. And blink they did.

The news dropped like a stone out of Ottawa: Canada’s Liberal government—now led by Mark Carney, the global finance technocrat turned Prime Minister—announced it will halt collection of the Digital Services Tax and bring forward legislation to formally repeal it. All to “support negotiations” with the U.S., now aiming for a July 21 deal. Carney was sold to Canadians as some sort of economic savior—a sober, seasoned banker who’d deliver Harper-style fiscal resurgence. People thought they were getting 2008-era competence. What they got instead was a recycled globalist who walked straight into an avoidable trade blunder with the DST that nearly torched Canada’s largest economic relationship.

Turns out the suit doesn’t make the man—and the buzzwords don’t build the economy. But let’s be honest—this was inevitable.

Carney’s tax was a political vanity project from the beginning. A 3% levy on revenue, not profit. Retroactive to 2022. Aimed squarely at American companies. And everyone saw where it would lead: retaliation, tariffs, trade breakdown. Trump made it clear. The business community warned him. Expert testimony in Parliament predicted it word for word. But Carney, like Trudeau before him, pushed ahead with ideological arrogance and zero economic sense.

Now they’re backpedaling—hard.

Here’s what François-Philippe Champagne—Canada’s Finance and National Revenue Minister—had the nerve to say while announcing the death of the Digital Services Tax:

“Canada’s new government is focused on building the strongest economy in the G7 and standing up for Canadian workers and businesses. 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.”

Really? That’s the line now? After pushing through a retroactive digital tax designed to punish American firms, sparking a trade war, and watching Trump walk away from the table?

Let’s be honest—this tax wasn’t about “standing up” for Canadians. It was a copy-paste EU policy, inspired by the bureaucrats in Brussels who’ve spent years trying to kneecap American tech because they can’t compete. And what did Ottawa do? They followed Europe right off a cliff—without the economic leverage or tech sector to back it up.

And now? With Trump threatening to torch trade negotiations? Where’s the EU? Nowhere. Silent. Not a word. No coordinated defense. No solidarity. Because they’re not the ones getting hit with 25% tariffs on auto parts and steel—Canada is. That’s what you get when you hitch your policy wagon to a continent with no skin in your game.

Here’s the truth the Liberals don’t want to admit: they’re mad that Canada doesn’t have a homegrown Amazon, Twitter, Uber, or Netflix—but they wouldn't know what to do with one if they did. Why? Because the second it got big, they’d tax it to oblivion.

Instead of fostering innovation, streamlining regulations, and letting competition thrive, they attack success with punitive taxes and endless red tape. Canada is anti-competitive by design—a country where the market is controlled by monopolies, protected incumbents, and a government that punishes growth instead of enabling it.

That’s why we don’t have global tech champions. It’s not a lack of talent—it’s a lack of freedom. The feds don’t want innovators. They want tax targets.

Don’t believe me? Look at the Shaw–Rogers merger. The federal government signed off on one of the largest telecom consolidations in Canadian history—shrinking the number of national wireless providers and handing even more market power to an already dominant player. How is allowing less competition better for consumers? It’s not.

And the results? Exactly what you'd expect. The Competition Bureau has flagged concerns that Rogers is failing to offer pricing comparable to the affordable bundled plans that Shaw Mobile customers once had, especially in Western Canada, where affordability was already a concern.

The data backs it up. In June 2025, Rogers rolled out a revamped set of mobile plans—with higher prices across the board:

• Essentials Plan: Up from $50 to $65 for 100GB (with 58GB bonus, now totaling 158GB)

• Popular Plan: Up from $60 to $75 for 175GB

• Ultimate Plan: Up from $75 to $95 for 250GB

These aren’t improvements—they’re price hikes. And they’re the direct consequence of a government that thinks consolidation is good policy and competition is a threat.

But let’s not kid ourselves—this retreat on the DST was necessary. Even the meth head on Vancouver’s Downtown Eastside, eyes fixed on the pavement in full-blown fentanyl withdrawal, could’ve seen this one coming. You don’t slap a retroactive tax on the biggest, most powerful companies in the world—companies headquartered in your largest trading partner—and expect it to go unnoticed. You certainly don’t expect it to go unpunished.

But here we are.

I’ve seen incompetence before. I’ve seen arrogance. But this? This was willful ignorance wrapped in ideology and sold as economic policy. Everyone said this tax would have repercussions. Business leaders. Trade experts. Even Canada’s own financial institutions. It was all on the record. And yet Carney and the Liberals plowed ahead like nothing could go wrong.

Well, it did. Canada got hit. Trump walked. And now the same people who dragged the country into this mess are congratulating themselves for cleaning it up.

And here we are. Wreckage everywhere.

This wasn’t just predictable. It was inevitable.