Canada caves to Trump and rescinds its digital service tax on big tech

Canada has cancelled its proposed digital services tax on big tech companies, which was set to collect around $2 billion in payments. The tax, known as the Digital Services Tax, or DST, was introduced last year and applied a three percent tax on content from large tech firms. The Canadian government had planned to use some of the funds collected under the DST to support media companies hurt by the dominance of US tech firms like Google and Meta. However, the US government, under both the Biden and Trump administrations, opposed the levy, with Trump calling it a "direct and blatant attack" on the US. The Canadian government's decision to cancel the DST comes after Trump ended trade talks over the issue, but discussions have now resumed. The DST was also opposed by local businesses in Canada, who were concerned it would increase their costs, with Google saying it would increase ad rates by at least 2.5 percent to cover the cost of the tax. The cancellation of the DST is seen as a victory for Trump and a benefit to his tech company supporters. Canada's decision to cancel the tax may have been motivated by a desire to avoid further tariffs from the US, which have already cost Canada billions of dollars. The Canadian government had hoped to use the DST to level the playing field for local media companies, but ultimately decided to sacrifice the tax to support trade negotiations with the US. The cancellation of the DST will likely have significant implications for Canada's trade relationship with the US and the future of its media industry.