Automotive industry players in Canada likely heaved a sigh of relief after the federal government announced trade talks between Canada and the United States will resume. Both parties are eyeing a deal by July 21.
It was not Canada’s automotive sector but its Digital Services Tax that appeared to be a sticking point for U.S. President Donald Trump, based on his social media posts. Trump announced that trade negotiations would be halted, although his tone changed when the federal government rescinded the tax on Sunday.
“In our negotiations on a new economic and security relationship between Canada and the United States, Canada’s new government will always be guided by the overall contribution of any possible agreement to the best interests of Canadian workers and businesses,” said Mark Carney, Prime Minister of Canada, in a statement.
Carney said the announcement to do away with the Digital Services Tax will support a resumption of negotiations toward the end of July — a “timeline set out at this month’s G7 Leaders’ Summit in Kananaskis.”
François-Philippe Champagne, the Minister of Finance and National Revenue who made the official announcement to pull the tax, said in a statement that rescinding it “will allow the negotiations of a new economic and security relationship with the United States to make vital progress and reinforce our work to create jobs and build prosperity for all Canadians.”
Monday’s deadline to collect the tax will be halted. Champagne will also soon bring forward legislation to rescind the tax.
