Canada Cancels Digital Services Tax to Restart Trade Talks

The Canadian Department of Finance at the last minute announced the cancellation of a planned Digital Services Tax (DST) which had been scheduled to go into effect 30 June 2025.

This happened 48 hours after US President Donald Trump - who called the tax a "blatant attack" on US tech giants - suspended trade talks with Canada.

The DST would have applied retroactively to 1 January 2022 to revenues collected by US tech companies in excess of $20M from Canadian customers for:

• Online marketplace services
• Online advertising revenue
• Social media services
• Sales of user data

As of 30 June 2025, tax owed by US companies would have been around $2.7 billion.

US-Canada trade talks are now back on track for reaching an agreement on trade and tariffs by 21 July.

Canadian exports of steel and aluminum to the US are currently subject to a 50% tariff which is problematic for Canadian producers.