We just threw $7 billion onto Trump’s poker table—the expected five-year haul from the DST —simply to keep playing a rigged game with no clear end. What was gained here?

The money these companies earn from online ad revenues—and by selling our personal data (including our search habits)—is virtually untaxed. This is because, like many multinational companies, Google, Meta, Amazon, Airbnb and other online platforms can register their global profits in low-tax jurisdictions.

While U.S. officials in the Democratic and Republican parties accuse the DST of discriminating against U.S. firms—“to stifle American innovation,” according to Commerce Secretary Lutnick today—the tax would have applied to firms of any nationality, and only on revenues above $20 million.

Trade watchers have always suspected Canada was holding on to the DST mainly for negotiating purposes. It was something generally positive for Canada that could nonetheless plausibly be negotiated away for some meaningful purpose, perhaps in the planned six-year review of the Canada-U.S.-Mexico Agreement (CUSMA) that replaced NAFTA under the first Trump presidency. Prime Minister Carney admitted this was the plan in a press scrum today (June 30).

The Canadian government, in playing that card early, has depleted Canada’s digital sovereignty and federal revenues, for no apparent reason other than to keep Trump sweet. In doing so, we will undermine efforts in Europe and elsewhere to develop national digital services taxes in the absence of a viable international alternative.

Worse than that, the Canadian government has legitimated Trump’s pointless and highly destructive trade warfare at a possible turning point.