EYE ON POLITICS:Back at the drawing board

by Kerry Turner

       Canadian Prime Minister Mark Carney will be back at the drawing board shortly as he faces the consequences of a previous Liberal government’s tax plan. A somewhat unhinged, yet nevertheless unsurprising post to Truth Social on Friday, June 27th saw US President Donald Trump retaliating on the perceived slight, which throws yet another wrench into ongoing – and as of yet, unsuccessful - bilateral trade talks. 
       Following the G7 meetings in Kananaskis, Alberta earlier this month, Trump and Carney promised they would pursue negotiations toward a new trade and security deal by mid-July, a 30-day deadline from their discussions. However, Trump says his team is ending all ongoing trade talks with Canada, “effective immediately,” claiming a disagreement over Canada’s controversial digital services tax as the reason for shutting down negotiations. The digital services tax is a three per cent levy on revenue from Canadian users of digital services such as Amazon, Google, Meta, Uber and Airbnb. The tax, enacted last June, targets U.S. technology companies that operate in Canada but pay little tax here. Under the new tax regime, the first payments are set to be collected on Monday, June 30. Former Prime Minister Justin Trudeau’s government enacted Canada’s Digital Services Tax Act in June 2024, with the rules coming into effect the same month.           The federal tax is applicable to large businesses – both foreign and domestic – that meet two specific criteria: a total global revenue of €750 million and up, and over $20 million of profits earned in Canada annually. All to say, Ottawa could stand to gain billions in DST revenue, according to some estimates.
       “We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven-day period,” Trump wrote in his Truth Social post. Speaking in the Oval Office on Friday afternoon, Trump continued that the U.S. has "such power over Canada," and that he's upset the country is following a taxation strategy similar to Europe's.
       “The Canadian government will continue to engage in these complex negotiations with the United States in the best interests of Canadian workers and businesses,” reads a statement from the Prime Minister’s Office Friday afternoon. Carney also met with the First Premiers in a closed door and media-free meeting on Friday, following the President's declaration. 
       This comes hot on the heels of Carney’s self-imposed deadline to remove interprovincial trade barriers. In a shared goal to streamline interprovincial efforts to boost the economy, Bill C-5 has been passed- though not without its controversies. In what has been a change of pace for the federal Liberals under Carney, Bill C-5 passed in the House of Commons thanks to the support of the Conservatives, who often stood in opposition to legislation proposed by Carney’s predecessor, Trudeau. In fact, recent Liberal and Conservative voters find themselves broadly agreeing on different elements of the bill – except when it comes to bypassing ecological assessments. While the legislation is overall supported by the majority of Canadians, specific aspects of it continue to raise concern; particularly the impact of sidestepping environmental barriers and fast tracking indigenous involvement.
       Bill C-5 allows Carney's cabinet to streamline the approvals process by allowing some projects to bypass provisions of federal laws like the Impact Assessment Act, which has long been criticized as a hindrance to getting things approved in a timely manner. Paul Prosper, a Mi'kmaw senator from Nova Scotia, led the charge against the legislation in a speech to the chamber Thursday, quoting other First Nations leaders who called C-5 "not reconciliation" stating, "no one wants to watch our children grow up in squalor, with no access to clean drinking water, no opportunity for good-paying jobs and no support for our sick and dying. However, we do not want success and progress to come on the backs of Indigenous Peoples. We want to be at the table, making decisions alongside Canadian politicians, because these decisions affect us. They affect our lands and resources," Prosper said. While the legislation doesn't dictate what should be built, Carney has signaled it could be used to greenlight new energy "corridors" in the east and west, including possible pipelines and electricity grids, new and expanded port facilities, mines and other resource-related initiatives. 
       With Canadian voters citing their concerns around the ability to handle President Trump as the reasoning behind a Carney victory, now is certainly the time to demonstrate whether this vote was well placed. Your move, Carney.