Just as Canada was set to make major tech companies like Google, Amazon, and Meta pay their fair share of tax for operating in the Canadian market, the Carney Liberals capitulated to Trump – scrapping the Digital Services Tax and leaving an estimated $7 billion in revenue on the table over the next five years. This follows the decision by Canada and the rest of the Group of 7 to exempt US multinational corporations from the global minimum corporate tax rate, forgoing billions more in revenue. 
 
Multinational corporations have long evaded taxes by shifting profits out of countries where they operate. Come tax time, they report that income earned in Canada was actually earned in other jurisdictions so they can avoid the bill. This means the Canadian government has been missing out on an estimated $4 - $5 billion in tax revenue every year – revenue that could go to funding critical public services like health care and education. 
 
Many countries realized that the best way to address the issue of tax havens and profit shifting was to cooperate with each other. After years of negotiations, in 2021 over 130 nations endorsed a Two Pillar solution, and began the hard work of developing legislation to implement the rules they had agreed upon. The first pillar dealt with taxing digital services, and the second pillar implemented a minimum global corporate tax rate of 15% for multinational corporations. Prior to Donald Trump’s election, the United States opposed the digital services pillar but supported the global minimum tax rate for multinational corporations.
 
The last Liberal government introduced a global minimum corporate tax rate for multinational corporations, and the Digital Services Tax was a way to capture big tech’s share of these revenues. The Digital Services Tax was set to apply to companies who earn more than $20 million from Canadian consumers on services like online advertising and shopping (and by selling our data). Currently, these profits are virtually untaxed. 
 
But on Monday, behind closed doors and at the behest of Donald Trump and his billionaire friends, Carney scrapped the tax. In return, all he received for this concession was continued trade talks with an unreliable partner. 
 
This follows the G7 decision to exempt US multinational corporations from the global minimum corporate tax rate – many of them these same digital giants – in return for Donald Trump removing a retaliatory tariff clause from his proposed legislation. Canada’s announcement framed the decision as preserving international tax cooperation by implementing a ‘side-by-side’ solution, but in reality, it guts the effectiveness of the agreement.
 
CUPE and other unions have been shut out of the negotiations, leaving workers with little say on an agreement that could have major impacts on their jobs and pensions. 
 
When governments choose corporate interests over tax fairness, it undermines their ability to invest in public services and deliver the supports that workers and communities need to get through a crisis. CUPE calls on the federal government to reinstate the Digital Services Tax and ensure workers have a voice in trade negotiations.