Did Canada Just Blink? Mark Carney’s Government Drops Big Tech Tax After Trump Throws a Fit

Are we really letting Trump dictate domestic policy, now?

July 1, 2025 — Canada Day, but not exactly a day of Canadian strength on the global stage.

Let’s start with the obvious question:

Did Canada just blink?

Because from where most proud Canadians are sitting, it looks like we took a hard elbow to the face and skated away without a fight.

After years of planning, legislation, and tough talk, Prime Minister Mark Carney’s government just shelved Canada’s Digital Services Tax — a policy that was supposed to make Big Tech finally pay their fair share — because Donald Trump threatened to crush our economy with retaliatory tariffs.

Yes, that Donald Trump.

The same one who has already imposed 50% duties on steel and aluminum. The same one who blew up Iran’s bunkers on a hunch and called it diplomacy. The same one who thinks TikTok is Chinese mind control and has never read past the headline of a trade agreement in his life.

And now he’s dictating Canadian tax policy. On our birthday.

Let’s break down what just happened, why it’s a slap in the face to Canadian sovereignty, and whether this “strategic retreat” is actually just a clean loss, with Big Tech and Trump celebrating while Canada quietly folds.

What Was the Digital Services Tax, Anyway?

Canada’s Digital Services Tax — originally tabled during the Trudeau era — was a 3% levy aimed at multinational tech giants like Google, Amazon, Meta, Apple, and other digital juggernauts that rake in billions from Canadians without paying anything close to their fair share in taxes.

The idea was simple: If you profit off Canadians, you should contribute to the country you’re profiting from.

And it wasn’t even radical. France, the UK, Austria, Italy — they’ve all passed similar digital levies. Canada’s version, passed into law last year, was supposed to come into effect today, July 1, 2025, and even apply retroactively to revenues earned since 2022.

Finance Minister François-Philippe Champagne went on the record last month, doubling down on the tax, saying Canada wouldn’t back down even under pressure from the United States. Champagne emphasized that the DST was already a law, in force, and would go live on July 1.

However, all that chest-puffing came to an end with one Trump post and a multitude of economic threats.

Trump Threatens, Canada Folds

Here’s how fast things moved.

Late last week, Trump abruptly ended all trade negotiations with Canada over the DST. Then he went nuclear, threatening steep new tariffs on Canadian goods if we dared collect a single loonie from U.S. tech firms.

This wasn’t a policy disagreement. It was economic blackmail.

Trump’s administration warned that our digital tax was a "direct attack on the U.S." and vowed to retaliate — not just with tariffs, but by blowing up the entire negotiating table. And while Canada did prepare countermeasures on steel and aluminum, the writing was on the wall: Trump was going to unleash hell if we didn’t walk it back.

And we did.

Late Sunday night — mere hours before the tax was set to take effect — Champagne issued a statement saying Canada would introduce legislation to rescind the DST entirely. Not delay. Rescind.

Instead, Canada will now reopen talks with Trump’s team to try and work out a “broader economic and security agreement” by July 21.

This was supposed to be a moment of accountability for the world's richest companies.

Instead, it’s a warning shot for anyone who believed Canada was immune to Trump’s bullying.

The Optics: Champagne’s Elbows Were Not Up

What makes this worse is the whiplash from Champagne’s own rhetoric.

Just two weeks ago, the Finance Minister was promising Canadians that we wouldn’t fold. He said the tax was “already the law” and that we would be collecting retroactively, regardless of how angry the White House got.

He even tried to project strength by referencing allies like France and the UK, who’ve imposed similar taxes.

So, what happened?

Let’s be honest — we got outmaneuvered. Champagne talked a good game but failed to deliver. Carney’s government put all their weight behind a tax that was months — even years — in the making, only to yank it at the last second. It makes us look indecisive. Worse: it makes us look weak.

If this was a planned concession to grease the wheels of a bigger trade agreement, it would’ve been sold that way up front. Instead, we got the chicken dance.

It’s hard to celebrate Canada Day when it feels like a foreign president just rewrote our tax code from his golf cart.

Is This a Strategic Retreat — Or Just a Loss?

The Carney government is trying to spin this as part of a bigger play: get Trump off our backs now, and maybe — just maybe — win a bigger economic and security partnership later.

But that’s a dangerous bet.

Canada just gave up $7.2 billion in projected revenue over five years. That’s not pocket change — that’s money we were counting on to fund infrastructure, services, and an economy that tech companies themselves have distorted.

If there’s no major deal by July 21 — one that delivers real, bankable wins for Canadian workers, industries, and digital sovereignty — then this isn’t a strategic move.

It’s a surrender. Perhaps a strategic surrender and better decision lie ahead in the long term, but we appear weak this week for the first time in the last four months.

Sovereignty or Subservience? A Foreign President Is Calling Our Shots

Let’s call this what it is: a Canadian policy decision reversed under direct foreign duress.

Donald Trump is not Canada’s president. He’s the unfortunate fascist leader of a foreign country who walked back into the Oval Office on a protest vote and a promise to “make everyone pay.”

But he’s not supposed to be making us pay for trying to tax our own marketplace.

This isn’t just about tech. It’s about sovereignty.

It’s about whether Canada gets to make decisions in Ottawa — or if we have to run everything through Mar-a-Lago first.

We were promised by Carney himself that Canada would stand tall with our elbows up. We just ducked.

How Did Other Countries Handle It?

Here’s the kicker: Canada didn’t have to fold. Other countries faced the same pressure — and played their hands better.

• France implemented a DST and stood its ground until Macron negotiated a truce — without erasing the tax entirely.

• The UK made concessions but still kept a scaled-back DST in place while negotiating broader trade deals.

• Even South Korea was threatened by the Trump administration and still proceeded with antitrust investigations into Big Tech.

Canada didn’t scale back. We canceled it. Retroactive payments that were due July 1 are now erased. Tech giants get to laugh all the way to the bank — and they won’t even have to pay for the parking.

We’d Better Have One Hell of a Deal Coming

Look — maybe this is a smart trade.

Maybe Carney and Champagne are holding out for something bigger, like a comprehensive economic and security deal that finally protects Canadian industry, ends the steel tariff madness, and opens new tech cooperation opportunities.

But if this is just about avoiding Trump’s temper? If we gave up $7 billion and let Big Tech off the hook just to avoid a few angry tweets?

Then we just handed the keys to the kingdom to a foreign president. And that should alarm every Canadian, regardless of party, province, or platform.

Because sovereignty means nothing if it can be bought with a tariff threat.

So Happy Canada Day, I guess. Let’s hope our next birthday comes with a little more backbone, FFS.