Finance minister says Canada can negotiate better tariff terms with U.S. than other countries

National Post

13 hours ago

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Champagne announced Sunday that Canada has scrapped its 3% digital services tax on technology companies — just hours before the first payments were due. The move came after Trump terminated trade discussions with Canada based on what he called an 'egregious' tax, which would have earned the Canadian government more than C$7 billion ($5.2 billion) over five years, according to an earlier estimate from the country's Parliamentary budget officer.
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'The digital services tax was always part of a number of things that were to be discussed,' Champagne said. He also rejected the idea that it could be reintroduced at a later date.
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'We canceled it,' he said. 'The OECD and other countries will probably continue their discussions around that. But for us, we took a strategic decision because we want to get to a comprehensive agreement with the United States on security and on the economic front.'
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Champagne insisted that Canada's dairy and poultry supply management system isn't up for negotiation, despite the fact that Trump has said he doesn't like it. 'This is off the table,' he said.
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That system, which controls the production of food commodities including milk, eggs and chicken, includes steep tariffs — but they're only imposed when imports exceed a certain level. Almost all current US dairy exports to Canada enter the country duty-free.
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The US negotiated higher quotas for shipping agricultural products to Canada during Trump's first term in office.
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Budget Shortfall
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Carney's Liberal government has made a policy shift since the April election, promising to accelerate increases in defense spending — but at a cost to Canada's financial position.
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The C.D. Howe Institute, a Canadian think tank, estimates that Canada's budget deficit may reach about C$92 billion this fiscal year, more than double the government's December projection.
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Champagne declined to comment on the possible size of the deficit, or how the government would increase revenues or reduce expenses to reduce the shortfall.
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'Canadians understand we're in a unique position both domestically and internationally with the discussions around tariff, the discussion we had around defense and our sovereignty, and at the same time unlocking our full economic potential,' he said. 'It's kind of a generational opportunity.'
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