Canada rescinds Digital Services Tax to resume trade negotiations with U.S.

OTTAWA — Finance Minister François-Philippe Champagne said on Sunday that Canada is rescinding the digital services tax and will resume trade negotiations with the United States.

Canada is engaged in complex negotiations on a new economic and security partnership with the U.S.

Rescinding the DST will allow the negotiations to make vital progress and reinforce our work to create jobs and build prosperity for all Canadians.

🔗https://t.co/hsiDxk7JVD

— François-Philippe Champagne (FPC) 🇨🇦 (@FP_Champagne) June 30, 2025

Champagne said in a post on X that rescinding the tax will allow the “complex negotiations on a new economic and security partnership with the U.S.” to make vital progress, adding that it would “reinforce our work to create jobs and build prosperity for all Canadians.”

The announcement was made following a phone call between Prime Minister Mark Carney and U.S. President Donald Trump.

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On Friday, U.S. President Donald Trump said he was “terminating all discussions on trade with Canada” and threatening new tariffs over Ottawa’s plans to push ahead with the tax on June 30.

Trump said at the time that Washington would notify Canada about new tariff rates required “to do business with the United States” within the next week.

Trump made the comments in a post on his social media account, calling the tax a “direct and blatant attack on our country.”

Prime Minister Mark Carney has been negotiating in private with Trump and announced earlier this month they are pursuing a deal to end the stop-and-go tariff war. Canada is still aiming for a deal by July 21 — the deadline set by Carney and Trump at the G7 summit.

The tax would have seen big U.S. companies shell out revenue to the Canadian government.

The tax was to be retroactive for three years — leaving U.S. companies with a $2 billion U.S. bill due at the end of the month.

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