This article originally appeared in The Hub.
By Peter Menzies, July 4, 2025
Prime Minister Mark Carney’s born-again Liberals may have thought they’d erased Justin Trudeau from their history, but, in what is likely a preview of more to come, his ghost still haunts and humiliates them.
The chains the Liberals forged during Trudeau’s life at the nation’s helm were rattled on Friday when U.S. President Donald Trump called a halt to trade negotiations, saying he had “just been informed” about his northern neighbour imposing an “egregious” digital services tax (DST).
The legislation enabling its 3 percent charge on Big Tech companies’ Canadian revenues was, in fact, passed, foolishly, more than a year ago—although, as it turned out, there was no need for quibbling.
Carney dutifully caved to Trump when the going got rough, and the DST and the $2 billion that was supposed to go with it (deposits were due Monday) were gone before the sun set on the weekend. At the time of writing, it was unclear exactly what lever in the machinery of government had been pulled in order to put the brakes on, but legislation rescinding the bill is promised. Elbows down, in other words.
First, a little context. Canada had been working for several years with other OECD countries on a joint approach to taxing web giants (Google, Amazon, Meta, and the like) that are earning more than $20 million in Canada. The process has been ponderous, but when concluded, is expected to apply as of 2022. For reasons known only to Trudeau and his inner circle, Canada lost patience last year and went rogue with its own, equally retroactive, tax.
Business leaders, including both the American and Canadian chambers of commerce, begged Trudeau not to do it. The administration of President Joe Biden made it clear it disapproved, and the then-U.S. ambassador to Canada, David Cohen, said his country was “open to using all available tools that could result in meaningful progress toward addressing unilateral, discriminatory” taxes such as the DST.
Just as the money came due, Trump was called into action by Big Tech, and now the tax is dead. Trudeau’s imposition of it was just plain stupid, and the hope is that Carney had probably known for some time that the foppery would have to be offered up as a burnt offering in negotiations, which are now back on course. It is humiliating for the prime minister and the country to have to kowtow to Trump in this fashion, but there’s plenty more to come on that front.
It’s fair to assume Canada will now, red-faced, return to the OECD process while trying to pretend nothing ever happened. Hopefully, the 2.5 percent digital fee Google applied last October in response to the tax will disappear just as quickly.
But the DST was only one of Trudeau’s high-risk digital policies. The fates of a couple of others—the Online News Act and the Online Streaming Act—still await Trump’s wrath.
The former, based on the news industry’s fantasy that Meta owed them money for allowing them to post their content for free on Facebook and Instagram, led to their links being banned on that platform in 2023 at a cost to publishers of an estimated $220 million a year. Google got exempted from the act by paying what amounts to a ransom of $100 million a year into a journalism fund and terminating its commercial deals. Rather than creating new revenue for Canadian news organizations, Trudeau’s bumbling bill cost them loads of loot.
In response, the industry and Trudeau’s government conspired to make up those losses at the taxpayers’ expense through subsidies. Those, in turn, have diminished many people’s already wobbly trust in news providers, which means that yes, the whole thing is—as was predicted by a few of us—a mess.
News industry lobbyists will argue that it isn’t, but they still have to confront the reality that “web giants” are working just as hard in Washington to have Canada surrender the Online News Act as they were on the DST.
The same goes for the Online Streaming Act, which contentiously defined audio and video streamers such as Spotify and Netflix as broadcasters and, for two years now, has preoccupied the Canadian Radio-television and Telecommunications Commission (CRTC) to the exclusion of all else as it tries to implement it. Those efforts to shift the burden of Canadian cultural content and newsroom funding to offshore companies have—as was also foreseen by a select few—proven contentious, with streamers taking the CRTC to federal court and lobbying madly.
Both of these acts, as was the case with the now-defunct DST, are exquisitely poor pieces of legislation that attempt to achieve what could be considered worthy goals in entirely wrong ways. There was/is a process already underway to ensure Google, Amazon, etc, contribute to the treasury. Meta would argue it was already creating considerable value for publishers, and there’s probably a way for the government to push it to provide more.
The Online Streaming Act’s disappearance would definitely be bad news for Canadian content apparatchiks, but there are better ways to ensure Canadian programming is produced and is available/promoted on streaming platforms than the battle unfolding at the CRTC, which could last for a decade. Prior to the passage of the legislation, there was plenty of evidence of risk to the funds, but, overall, life had never been better for the funded and others in the TV and film production industry.
So grab some popcorn, sit back, and get ready for the show. The DST was just the opening act. Carney’s attempts to exorcise Trudeau’s digital ghost while trying to retain some shreds of dignity will be something to watch. Bring holy water.
Peter Menzies is a commentator and consultant on media, a Macdonald-Laurier Institute Senior Fellow, a past publisher of the Calgary Herald, and a former vice chair of the CRTC
