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Trudeau gov’t appears to back down on ‘digital services tax’ plans

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From LifeSiteNews

By Anthony Murdoch

‘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.  

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. 

Break The Needle

Canada-US border mayors react to new border security initiative

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By Alexandra Keeler

US President Donald Trump has linked his threat to impose 25-per-cent tariffs on Canadian goods to Canada’s failure to address drug trafficking and illegal migration at the Canada-US border.

Ontario has responded with a border security initiative, Operation Deterrence, which is drawing tepid support from Ontario mayors of border communities.

“Absence of leadership from Ottawa has created this [scenario] where the provinces are all going in to be Captain, or Miss Captain, Canada,” said Mike Bradley, the mayor of Sarnia, Ont., a city of 75,000 that sits on the Ontario-Michigan border.

“[But] anything that helps on the policing side to deal with the black plague of fentanyl is welcome,” Bradley said.

Operation Deterrence

On Dec. 6, Ontario redeployed 200 Ontario Provincial Police officers to unpoliced border areas near the 14 official Ontario-US border crossings, which are staffed by the Canada Border Services Agency.

Officers are using aircraft, drones, boats, off-road vehicles and foot patrols to “deter, detect and disrupt” the illegal trafficking of drugs, guns and people, a Jan. 7 provincial press release says.

Premier Ford’s office and Ontario Solicitor General Michael Kerzner declined to provide further details about the operation in response to requests for comment.

But a spokesperson for the Ontario RCMP said there is little evidence that fentanyl trafficking is a significant issue at the Canada-US border.

“There is limited to no evidence or data from law enforcement agencies in the U.S. or Canada to support the claim that Canadian-produced fentanyl is an increasing threat to the U.S.,” the spokesperson told Canadian Affairs in an emailed statement.

The spokesperson highlighted that fentanyl trafficking frequently occurs by mail, rather than at physical border crossings.

“Reports state fentanyl produced in Canada is being exported in micro shipments, most often through the mail. Micro traffickers are most often found on the dark web,” the spokesperson said.

As Canadian Affairs reported last week, seizures of fentanyl at the Canada-US border remain relatively low. But Canadian authorities have seized significant volumes of precursor chemicals used in the production of fentanyl, and key sources say Canada is a major player in the global fentanyl trade.

Data also show illegal migration is a concern along the Canada-US border.

The U.S. Customs and Border Protection reported nearly 200,000 cases of individuals in Canada trying to illegally enter the US in the 2024 fiscal year.

Canada Border Services Agency data indicate just under 5,000 individuals were detained trying to enter Canada from the US in 2023-24.

Borderlands

Jim Diodati, the mayor of Niagara Falls, says he is supportive of Ontario launching Operation Deterrence in response to Trump’s tariff threats.

“I’m glad at least we’re reacting,” he said. “The concerns, of course, are that things are slipping through the cracks … both for drugs, guns and human smuggling as well.”

But Diodati stressed that border concerns go both ways. He hopes Operation Deterrence will also address firearms trafficking from the US into Canada.

“Ninety percent of illegal guns that come into Canada come from the US side, across our borders,” he said.

Diodati blames Ottawa for underfunding the Canada Border Services Agency, the federal agency responsible for border security and immigration enforcement. “CBSA needs more resources,” he said.

“The US sees our border as porous, not as secure as theirs, and now, with the incoming president, they’re looking to punish us over it.”

Bev Hand is the mayor of Point Edward, a 2,500-person village located a short drive north of Sarnia, on the southern tip of Lake Huron. The community connects to Port Huron, Mich., by the Blue Water Bridge, a key Canada-US border crossing.

Hand expressed cautious support for Operation Deterrence’s aims of addressing drug trafficking.

She noted that, since 2019, there have been 16 major drug busts at the Point Edward border, including two significant cocaine seizures by U.S. Customs and Border Protection. In December 2023, US authorities found nearly 500 kg of cocaine in a truck entering the US. In August 2024, US authorities discovered over 120 kg of cocaine hidden in the wall of a truck bound for Canada.

“Fifteen of the seizures were in transport trucks,” she said. “This represents millions of dollars in illegal drugs, and we don’t know what wasn’t captured.”

Hand noted, however, that funds allocated to border security might be better spent on addressing the root causes of drug trafficking, such as addiction.

In December, Ottawa announced it would spend an additional $1.3 billion over six years on enhancing its border security. Ontario has not disclosed how much Operation Deterrence will cost.

Like Diodati, Hand also emphasized the role Operation Deterrence could play in helping to curb firearms trafficking from the US.

She referenced a May 2022 case where a resident discovered a bag with 11 handguns in a tree near Port Lambton, Ont., a city approximately 15 kilometres south of Point Edward.

“The package had fallen from a drone that is assumed to have come from the US side,” she said.

 

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‘Fentanyl Czar’

Bradley, Sarnia’s mayor, said border security initiatives must be balanced against the need to facilitate trade, particularly at critical crossings like the CN Rail tunnel — which runs beneath the St. Clair River and connects Canada to Michigan — and Blue Water Bridge.

“We want security, but you also want trade, and that’s the balance right now that we’re struggling with,” Bradley said.

A 13-year review by professors at Carleton University found that tighter Canada-US border security following the 9/11 attacks increased inspection times and delays at the border. This has “negatively impacted” bilateral trade and cost the Canadian economy billions in foregone economic opportunities and productivity.

Diodati, of Niagara Falls, said he would prefer to see Canada and the US take a bilateral approach to border security that focuses on bolstering security around the continent.

“We want to take a perimeter approach around North America, rather than the borders between us,” he said.

While diplomatic relations between Canada and the US are tense, further collaboration on border security may be on the horizon.

On Feb. 3, Trump paused the imposition of tariffs on Canada after Canadian Prime Minister Justin Trudeau promised Canada would send nearly 10,000 frontline personnel to protect the border.

“Canada is making new commitments to appoint a Fentanyl Czar, we will list cartels as terrorists, ensure 24/7 eyes on the border, launch a Canada-U.S. Joint Strike Force to combat organized crime, fentanyl and money laundering,” Trudeau wrote in a post on social media platform X.

“I have also signed a new intelligence directive on organized crime and fentanyl and we will be backing it with $200 million.

“Proposed tariffs will be paused for at least 30 days while we work together.”


This article was produced through the Breaking Needles Fellowship Program, which provided a grant to Canadian Affairs, a digital media outlet, to fund journalism exploring addiction and crime in Canada. Articles produced through the Fellowship are co-published by Break The Needle and Canadian Affairs.

Our content is always free – but if you want to help us commission more high-quality journalism, consider getting a voluntary paid subscription.

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Business

Vance, Elon criticize judge for blocking DOGE from Treasury Department

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J.D Vance” by Gage Skidmore, licensed by CC BY-SA 2.0.

MXM logo  MxM News


Quick Hit:

Vice President JD Vance and Elon Musk criticized a federal judge’s decision to block DOGE officials from accessing the Treasury Department’s payment system, calling it an overreach of judicial power. The ruling temporarily halts political appointees’ access to financial data, intensifying tensions between the White House and the judiciary.

Key Details:

  • U.S. District Judge Paul Engelmayer issued an order barring DOGE officials without security clearances from accessing Treasury payment systems through at least next Friday.
  • Vance called the ruling “illegal,” arguing that judges cannot interfere with executive power, while Musk called for Engelmayer’s impeachment.
  • The lawsuit, filed by 19 Democratic state attorneys general, is one of many legal challenges to the Trump administration’s government overhaul efforts.

Diving Deeper:

Vice President JD Vance and billionaire Elon Musk are pushing back against a federal judge’s decision to block the Department of Governmental Efficiency (DOGE) from accessing the Treasury Department’s payment system, calling the ruling a violation of executive authority.

The temporary injunction, issued by U.S. District Judge Paul Engelmayer, an Obama appointee, restricts DOGE officials—including political appointees and special government employees—from accessing the Treasury’s payment infrastructure unless they have proper background checks and security clearances. The judge cited concerns that the administration had overstepped legal boundaries in granting access to sensitive financial data.

Vance, in a social media post Sunday, accused the judge of unlawfully interfering in executive matters. “Judges aren’t allowed to control the executive’s legitimate power,” he said. Musk followed with more pointed remarks, calling for Engelmayer’s impeachment and arguing that the ruling was politically motivated.

The lawsuit, brought by 19 Democratic state attorneys general, is part of a broader legal effort to block President Trump’s aggressive attempts to cut federal spending and restructure government operations. So far, multiple courts have placed temporary holds on various White House initiatives, including a buyout program for federal employees and a workforce reduction at USAID.

Critics of Vance and Musk’s response argue that the administration should follow legal protocols rather than attacking the judiciary. Former Transportation Secretary Pete Buttigieg dismissed their criticisms, saying, “In America, decisions about what is legal and illegal are made by courts of law. Not by the Vice President.” Former Rep. Liz Cheney also weighed in, stating that the administration’s recourse is through the appeals process, not by undermining the courts.

Musk has defended DOGE’s role at the Treasury Department, stating that the changes his team proposed were necessary to improve financial oversight and ensure accurate reporting of government spending. He claimed that Treasury and DOGE “jointly agreed” on new reporting requirements and emphasized that longtime career government employees were implementing them.

The legal battle is still in its early stages, with a hearing scheduled for Friday to determine whether the judge’s temporary order should be extended. Meanwhile, Trump signaled that DOGE would soon shift focus to the Education Department and military spending, setting the stage for further clashes with the judiciary.

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