The federal government has officially moved to scrap Canada’s long-planned digital services tax, marking the definitive end of a policy that stirred years of debate and tension with major U.S. technology companies.
Finance Minister François-Philippe Champagne tabled legislation in the House of Commons to implement the latest federal budget—legislation that also includes the full repeal of the digital services tax. The budget bill itself narrowly passed a vote on Monday, clearing the way for the government to move forward.
The tax, which Ottawa paused earlier this year while attempting to restart trade negotiations with the United States, would have targeted major multinational tech companies such as Amazon, Meta, Google, Uber and Airbnb. It was designed to ensure large digital platforms that profit from Canadian users paid their fair share in taxes. Had it been implemented, the measure was projected to generate $7.2 billion over five years, with payments retroactive to 2022.
Canada’s version of the tax mirrored similar policies adopted in countries like the United Kingdom and France. However, its retroactive structure and potential impact on U.S. tech giants had raised diplomatic concerns, prompting Ottawa to suspend and now formally end the plan as part of broader trade discussions.
With the digital services tax officially dropped, the government’s move closes the chapter on what had become one of Ottawa’s most contentious modern tax proposals.