Our government just scrapped the Digital Services Tax, and let me tell you why this decision should concern every Canadian who cares about fairness in our economy.
This wasn’t part of some grand trade deal. This was pure politics. Donald Trump demanded we drop the tax before he’d even sit down to negotiate, and our government folded. Now we’re left holding the bag while some of the world’s richest companies walk away scot free.
What the tax actually was
We’re talking about a modest levy on digital giants like Amazon, Meta, Google, and Apple, companies that collectively raked in over $1 trillion last year. These aren’t struggling startups. They’re making billions right here in Canada, but because they operate online and keep their profits offshore, they dodge most of our taxes.
Meanwhile, your local hardware store, the bookshop downtown, the family restaurant on Main Street all pay their full share. How is that fair?
The damage is already done
Walk through our downtowns and you’ll see what I’m talking about. Empty storefronts where hardware stores used to be. “For Lease” signs on buildings that once housed independent bookshops. The little repair shops where you could talk to someone who actually knew how to fix things, most of them are gone.
These weren’t just businesses. They were the places that hired local kids for summer jobs, sponsored community hockey teams, and donated prizes for school fundraisers. The owners knew their customers by name and let community groups use their back rooms for meetings. When they disappear, we don’t just lose convenient shopping, we lose the fabric that holds our communities together.
The news industry tells an even starker story. Google and Meta have vacuumed up nearly all the advertising revenue that used to keep local newspapers and radio stations afloat. Hundreds have closed their doors. That means fewer reporters covering city council meetings, fewer investigations into local issues, and more communities left in the dark about what their governments are actually doing.
And when things go wrong online, when seniors get scammed, when kids face cyberbullying, when small businesses deal with fraud, good luck getting help. You’ll get a chatbot, not a human being. These companies have made billions off Canadian users, but they’ve outsourced customer service to algorithms.
The next wave is already here
Artificial intelligence is coming for jobs we thought were safe: teachers, graphic designers, writers, healthcare workers. The AI tools replacing these professionals? They’re built by the same tech giants we just gave a tax break to, often using content created by the very people whose jobs are now at risk.
This isn’t about being anti technology or anti innovation. It’s about basic fairness. If you’re making billions in Canada, you should contribute to Canada. If your business model is disrupting entire industries, you should help communities adapt. If you’re profiting from Canadian data and Canadian users, you should be accountable to Canadian standards.
We gave up our leverage first
Let’s not forget that Canada didn’t dream up this digital tax in isolation. We’ve been working with our international partners through the OECD for years to develop a coordinated approach to taxing digital giants. These companies operate globally, and they’ve gotten very good at playing countries against each other to avoid taxes everywhere. The OECD framework was designed to close those loopholes with a unified approach that would be much harder to dodge.
The Digital Services Tax wasn’t perfect, but it was a start and part of a broader international effort. Walking away from it with nothing in return sends a clear message: if you’re big enough and foreign enough, you can write your own rules in Canada.
If a broader agreement genuinely lands, that would be welcome news. A comprehensive deal that addresses these issues fairly would be better than our patchwork approach. But we need to be realistic about what we’ve given up and what we’re counting on. We’ve removed our main piece of leverage before seeing what’s actually on the table.
We should be standing up for working people, protecting the businesses that actually contribute to our communities, and making sure the digital future works for everyone, not just Silicon Valley shareholders. This moment requires us to keep our eyes on what matters: ensuring that those who profit from our economy contribute their fair share, and that the benefits of technological change don’t come at the expense of the communities we serve.
Source
Canada rescinds Digital Services Tax to advance broader trade negotiations with the United States — Department of Finance Canada, June 2025.
