this post was submitted on 30 Jun 2025
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Canada dropped the Digital Services Tax because of dairy supply management (sh.itjust.works)
submitted 14 hours ago by sbv@sh.itjust.works to c/canada@lemmy.ca
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Here's my theory: Carney dropped the DST because of supply management on dairy. My evidence is sparse, but:

Last month, the U.S. and Britain announced a trade deal related to a range of products. But Britain’s 2-per-cent DST was not affected.

(From the Globe)

That shows other countries have a DST but that hasn't been a sticking point in trade negotiations.

Meanwhile, Quebec really likes supply management:

83 per cent of Quebecers want governments to do everything in their power to protect the country’s supply management system.

During the next election, Carney will probably need Quebec's support to stay in power. By giving up the DST, Carney may be able to keep supply management for dairy, and avoid alienating Quebec voters.

I guess we'll see during the final negotiations. Do our dairy farmers get to keep their protections?

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[–] wise_pancake@lemmy.ca 17 points 13 hours ago* (last edited 13 hours ago) (4 children)

Not happy with this at all

For all the US's rhetoric about trade deficits being bad, we need to say we don't want a trade deficit on digital services and we're using tariffs the same way they are.

We aren't unique in having a tax like this, and the US has no place saying it's unfair when it's not even only foreign companies paying. We're literally don't the opposite of a tarif today.

Plus the US government is subsidizing their tech companies especially in the AI space.

[–] sbv@sh.itjust.works 2 points 12 hours ago (3 children)

Fair enough. There's a push and pull in negotiations that we (generally) don't see. I'm trying to read the tea leaves to figure out why Carney would ditch the DST, and this is a possible reason. I can't know if it's the reason. But it's interesting to think about.

We aren’t unique in having a tax like this,

I think we're unique in that we made our tax retroactive.

and the US has no place saying it’s unfair when it’s not even only foreign companies paying.

Generally, I agree that the US has no place dictating our tax policy, but they are within their rights to control their trade with us. 90% of the companies paying are US tech companies (I think that's in the Globe explainer), so I can see why poking us to see what they can get. I don't like it, but that's (sadly) irrelevant.

[–] wise_pancake@lemmy.ca 1 points 12 hours ago (1 children)

Yeah there's definitely a big picture

I just can't take anything the current US admin says as serious, so when they say they'll walk away I would want to call that bluff.

[–] SpaceCowboy@lemmy.ca 1 points 8 hours ago (1 children)

I think at this point we're just buying time to diversify trade. It's incredibly stupid to to think factories can be built in two weeks or even that businesses can source products from suppliers in other countries in that time frame. This is seemingly what Trump thinks, but yeah, it's stupid.

So I'm hoping they're doing everything needed to end dependence on the US in the background while mitigating the impact of Trump's nonsense in the short term. But as @sbv@sh.itjust.works says, we can't really know we're just reading tea leaves.

[–] sbv@sh.itjust.works 1 points 8 hours ago

You're right. There's no "done" here. There's a tonne of work to be done to diversify our economy and trading partners - it'll be an ongoing burden because we don't have any other adjacent markets.

Anyhow. My perspective isn't as gloomy as other commenters. There were international rules around digital services taxes being negotiated before Trump came along. AFAIU they stalled, but this crap seems like a good reason to get them started again.

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