Business
Trudeau gov’t appears to back down on ‘digital services tax’ plans
From LifeSiteNews
‘feds need to stop dreaming up new taxes and new ways to make life more expensive.’
A plan by Prime Minister Justin Trudeau’s federal government to tax the advertising revenues of non-Canadian tech giants and other companies – which could spark a major trade war and make accessing the internet more expensive – seems to be off the table, at least for now.
According to Canadian law professor Dr. Michael Geist, the Trudeau government seems to have “quietly backed down from its plans to implement a new Digital Services Tax (DST) as of January 2024.”
In its 2019 election party platform, the Trudeau Liberals had promised to impose a three percent so-called DST, which could have brought in an estimated $7.2 billion, but at the expense of tech giants that all provide services to Canadians.
In October, the head of the Canadian Taxpayers Federation (CTF) Franco Terrazzano said the “feds need to stop dreaming up new taxes and new ways to make life more expensive.”
“Prime Minister Justin Trudeau should be doing everything he can to make life more affordable, but this Digital Services Tax will mean higher prices for ordinary Canadians,” he noted.
The CTF noted that when France introduced a similar tax against tech giants such as Google, Facebook, Amazon, and other large online sites, it caused everything to get more expensive in the country.
“An economic impact assessment of the French digital services tax shows that about 55% of the total tax burden will be passed on to consumers, 40% to online vendors and only 5% borne by the digital companies targeted by the new tax,” noted the CTF.
Geist said that after months of the Trudeau government insisting a DST would be incoming next year, the government has removed that “implementation deadline” in their recent Fall Economic Statement.
When news first broke of the tax in late 2019, many U.S. Senators and Representatives signed letters asking the Canadian government to delay implementing a DST, which they warned would have created disastrous consequences.
As it stands now, a 1984 Convention Between Canada and the U.S. regarding taxes on income lets American web companies only pay tax in their home state. Indeed, a federal report even confirmed that such a tax would breach the 1984 treaty and does not work with current Canadian income tax laws.
Canadian Finance Minister Chrystia Freeland had been insisting up until recently a DST would be coming. In the summer 2023, she said, “Two years ago, we agreed to pause the implementation of our own Digital Services Tax (DST), in order to give time and space for negotiations on Pillar One. But we were clear that Canada would need to move forward with our own DST as of January 1, 2024, if the treaty to implement Pillar One has not come into force.”
Even earlier this month Freeland seemed “cautiously optimistic” a deal could be reached between Canada and the U.S. for a DST.
Geist noted that it now “appears that the optimism came from a decision to simply remove the January 1, 2024 start date,” to implement the tax and move it down the road to a later date.
As noted in the Trudeau Liberals Fall Economic Statement, “In order to protect Canada’s national economic interest, the government intends to move ahead with its longstanding plan for legislation to enact a Digital Services Tax in Canada and ensure that businesses pay their fair share of taxes and that Canada is not at a disadvantage relative to other countries.”
“Forthcoming legislation would allow the government to determine the entry-into-force date of the new Digital Services Tax, as Canada continues conversations with its international partners.”
Geist noted that the delay in implementing a DST means that it “buys time for a potential international agreement on implementing a global approach to the issue and should relieve some of the external pressure.”
Putting in place DST now would create ‘significant risks’
As it stands now, the Trudeau Liberals have already pushed forth bills that will regulate the internet. This includes the federal government’s censorship Bill C-11, the Online Streaming Act, which has been blasted by many as allowing the government more control of free speech through potential new draconian web regulations.
Another Trudeau internet censorship law, Bill C-18, the Online News Act, became law in June 2023 despite warnings that it will end free speech in Canada. This new law forces social media companies to pay Canadian legacy media for news content shared on their platforms.
Geist observed that while implanting a DST on tech giants might be more “preferable to the cross-industry subsidy model found in Bills C-11 and C-18,” pushing forth with a DST now would bring disastrous consequences and could spark a trade war.
“Moving ahead now would have created significant risks, including the prospect of billions in retaliatory tariffs. Led by Bill C-18 and the digital services tax, the government talked tough for months about regulating big tech,” wrote Geist.
“But with the (Fall Economic Statement) FES providing a massive bailout to compensate for the harm caused by the Online News Act and the decision to hold off on implementing the DST, it would appear that the tough talk has been replaced by much-needed realism on what amounted to deeply flawed policies and a weak political hand.”
Geist has continually warned that the Trudeau government’s meddling with big tech by trying to regulate the internet will not stop at “Web Giants,” but will lead to the government going after “news sites” and other “online” video sites as well.
From Resource Works
By Geoff Russ
For major projects, what is old is new again
Prime Minister Mark Carney’s second wave of “nation-building projects” sounds transformative: six new energy and mining proposals, plus a northern corridor, added to the first tranche unveiled in September, and included in the freshly passed federal budget for the fiscal year.
Together, Ottawa says, they amount to more than $116 billion in investment and are central to “realizing Canada’s full potential as an energy superpower.” That is the pitch in the federal news release.
Look closely, though, and a different picture emerges. For major projects, what is old is new again. Almost every file now being “fast-tracked” was already on the books, sometimes for a decade or more.
The new referrals to the Major Projects Office (MPO) are all familiar: the Nisga’a-led Ksi Lisims LNG terminal on B.C.’s north coast; BC Hydro’s North Coast Transmission Line; Canada Nickel’s Crawford project near Timmins; Nouveau Monde Graphite’s Matawinie mine north of Montréal; Northcliff’s Sisson tungsten project in New Brunswick; and the Inuit-owned Iqaluit Nukkiksautiit hydro project in Nunavut. The “Northwest Critical Conservation Corridor” in B.C. and the Yukon is added as a long-range concept.
Long timelines and longstanding obstacles
None of these is a fresh idea. As the Globe and Mail notes in a project-by-project rundown, Ksi Lisims has been in development for years and already faces two Federal Court challenges from nearby First Nations and opposition from Wet’suwet’en hereditary leaders who fought Coastal GasLink. The North Coast Transmission Line was identified in 2023, with B.C. legislation to fast-track it and term-sheet co-ownership deals with First Nations already in place. The Sisson mine has been stalled at the pre-construction stage for more than a decade, despite earlier approvals and new public money to update its feasibility study.
Iqaluit hydro is hardly a novelty either. As Globe reporting shows, dam concepts near the city have been studied since the mid-2000s, with the current Inuit-owned proposal building on that earlier work and backed by federal engineering funds. The Crawford nickel project was acquired in 2019 and has spent years lining up investors and a complex financing stack, documented in both CBC and Financial Post coverage. Matawinie received its Quebec authorization in 2021, has an impact-benefit agreement with the local Atikamekw Nation and now enjoys federal price-floor guarantees on graphite.
The first tranche, announced in September, follows the same pattern. LNG Canada Phase 2 in Kitimat, new nuclear at Darlington, Contrecoeur container capacity at the Port of Montréal, McIlvenna Bay in Saskatchewan and the Red Chris expansion in B.C. were all in various stages of planning long before Carney entered office. The MPO is not inventing a new project pipeline; it is trying to accelerate the one Ottawa already had.
Acceleration is the point — and industry welcomes it
Acceleration is, to be fair, the point. The Calgary-based MPO, led by former Trans Mountain head Dawn Farrell, is designed to run permits in parallel, not one after another, and to coordinate financing through bodies like the Canada Infrastructure Bank and Canada Growth Fund. Farrell told CBC that work which might have taken “five or six more years” could be cut to roughly two. In a country where large projects regularly die of regulatory exhaustion, that is significant.
Industry likes the signal. Canada Nickel CEO Mark Selby says MPO referral “puts us in the fast lane,” even without the more controversial “national interest” label in Bill C-5 that would allow cabinet to set aside parts of the Fisheries Act, Species at Risk Act or Impact Assessment Act. Inuit proponents of the Iqaluit project welcome Carney’s description of their hydro plan as a breakthrough for Arctic sovereignty, replacing millions of litres of diesel.
But a superpower strategy this is not
Still, if this is what becoming an “energy superpower” looks like, it is a modest start.
Notably absent from Carney’s list is any new oil pipeline. Alberta Premier Danielle Smith has spent months pushing a concept for a bitumen pipeline from the oil sands to the northern B.C. coast, doing provincial groundwork in the hope a private proponent will one day take it over. A BBC report sets out the feud with B.C. Premier David Eby, who dismisses the idea as “fictional” and “political” and insists no company wants it, accusing Smith of jeopardizing B.C.’s LNG ambitions. Smith has called that stance “un-Canadian.”
Western frustration is growing. In the National Post, Whitecap Resources chief executive Grant Fagerheim warns of “fury from Alberta and Saskatchewan” if a pipeline to tidewater is never prioritized and argues producers are tired of a U.S.-dominated system where Canadian barrels sell at a discount while others capture the margins. He favours an energy corridor carrying oil, gas, power and rail, not just more rhetoric about nation-building.
Northern ambitions lag behind rhetoric
Another gap is the North. The Indigenous-led Arctic Gateway partnership, Manitoba and Ottawa are already spending heavily on the Hudson Bay Railway and planning new storage and loading systems to expand the Port of Churchill for grain, potash, critical minerals and Arctic resupply. Carney talks up a “huge host of opportunities” in northern Manitoba, but Churchill sits only on the MPO’s lower-profile “transformative strategies” list, with a full plan now pushed out to 2026.
Meanwhile, the one project that has fundamentally shifted Canada’s oil export position is the long-delayed Trans Mountain expansion. As Resource Works points out, TMX now sends diluted bitumen from Burnaby to Asia, shrinking the old “captive discount” and giving Canada genuine leverage in global markets. But TMX predates Carney’s government by more than a decade and only exists because Ottawa nationalized a struggling private pipeline to get it built.
Evolution, not revolution
Carney’s major-projects push is real, and for the companies involved, the prospect of faster permits and clearer federal backing is very good news. Yet for a government that talks about mobilizing a trillion dollars and remaking Canada as an energy superpower, the current list is evolutionary rather than revolutionary. For now, Ottawa is mostly trying to build what was already on the drawing board. The tougher choices on pipelines, ports and interprovincial trade still lie in front of it.
Headline photo credit to THE CANADIAN PRESS/Adrian Wyld
From the Fraser Institute
By Jason Childs
From 2015 to 2024, the government sector in Canada—including federal, provincial and municipal—added 950,000 jobs, which accounted for roughly 30 per cent of total employment growth in the country, finds a new study published today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
“In Canada, employment in the government sector has skyrocketed over the last 10 years,” said Jason Childs, a professor of economics at the University of Regina, senior fellow at the Fraser Institute and author of Examining the Growth of Public-Sector Employment Since 2015.
Over the same 10-year period (2015-2024), government-sector employment grew at an annual average rate of 2.7 per cent compared to only 1.7 per cent for the private sector. The study also examines employment growth by province. Government employment (federal, provincial, municipal) grew at a higher annual rate than the private sector in every province except Manitoba over the 10-year period.
The largest gaps between government-sector employment growth compared to the private sector were in Newfoundland and Labrador, New Brunswick, Quebec and British Columbia. The smallest gaps were in Alberta and Prince Edward Island.
“The larger government’s share of employment, the greater the ultimate burden on taxpayers to support government workers—government does not pay for itself,” Childs said.
A related study (Measuring the Cost to Canadians from the Growth in Public Administration, also authored by Childs) finds that, from 2015 to 2024, across all levels of government in Canada, the number of public administrators (many of who
work in government ministries, agencies and other offices that do not directly provide services to the public) grew by more than 328,000—or 3.5 per cent annually (on average).
“If governments want to reduce costs, they should look closely at the size of their public administration,” Childs said.
Examining the Growth of Public Sector Employment Since 2015
Jason Childs
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