Ottawa is insisting it did not cave to American pressure when it scrapped a $3.7 billion levy on digital giants. Blacklock's Reporter says Intergovernmental Affairs Minister Dominic LeBlanc told MPs the decision to suspend the Digital Services Tax Act was not a giveaway to Washington but a move in Canada’s best interest.LeBlanc testified at the Commons trade committee that discussions with U.S. officials have been ongoing for months. “There are different scenarios that various American officials advance and we talk about different scenarios,” he said. Suspending the tax was “part of a conversation.”Conservative MP Adam Chambers pressed LeBlanc on what he called repeated concessions to the White House, citing the dropped digital sales tax, the quiet removal of tariffs during the election, and the withdrawal of softwood lumber complaints. .“Can you point to one concession Americans have given us?” he asked.“I think it is part of an active negotiating conversation,” replied LeBlanc. Chambers fired back: “I don’t think anyone has ever considered them anything other than concessions.”Cabinet had previously promoted the tax, first floated in 2021 by then-finance minister Chrystia Freeland, as “good for Canada’s bottom line.” A 2023 Budget Office report estimated Ottawa would collect $3.7 billion in its first two years. .The Act planned a 3% charge on large multinationals with first payments due June 30. At 10:38 pm the night before, cabinet announced it would never collect the tax.Prime Minister Mark Carney defended the reversal. “It doesn’t make sense to collect tax from people and then remit them back,” he told reporters. “So it provides some certainty.” Asked if Canada got anything in exchange, Carney said it was part of “a bigger negotiation.”.The White House had attacked the policy as unfair, warning of retaliatory tariffs.“Only America should be allowed to tax American firms,” said a statement last February.The Congressional Research Service likewise cautioned Canada that such a measure would raise consumer costs and damage trade.
