“Elbows up” and knees bent. As expected given the nature of their dependency, the Canadian government has rescinded the digital services tax against U.S. tech companies.

The June 30th collection is halted and the Canadian government led by Mark Carney will be bringing legislation to rescind the tax entirely.

CANADA – […] Minister of Finance and National Revenue, the Honourable François-Philippe Champagne, announced today that Canada would rescind the Digital Services Tax (DST) in anticipation of a mutually beneficial comprehensive trade arrangement with the United States. Consistent with this action, Prime Minister Carney and President Trump have agreed that parties will resume negotiations with a view towards agreeing on a deal by July 21, 2025.

The DST was announced in 2020 to address the fact that many large technology companies operating in Canada may not otherwise pay tax on revenues generated from Canadians. Canada’s preference has always been a multilateral agreement related to digital services taxation. While Canada was working with international partners, including the United States, on a multilateral agreement that would replace national digital services taxes, the DST was enacted to address the aforementioned taxation gap.

The June 30, 2025 collection will be halted, and Minister Champagne will soon bring forward legislation to rescind the Digital Services Tax Act. (LINK)

In the bigger picture Canada has a serious problem.

Canada is entirely dependent on the USA; there is no part of the Canadian economic system that can survive without total dependence on the USA.  The Canadian economy is currently stagnant and their leftist government is desperate to find a way to collect revenue somehow, any way possible.   Additionally, President Trump is going to end the USMCA trade agreement and shut down a majority of the benefits Canada has been extracting.

The most remarkable aspect to this reality is the denial within Canada.  There are maybe a handful of honest Canadian economists, financial types and/or pundits who understand economic matters that are willing to outline and explain the details of Canada’s vulnerability…..

…. The rest are in denial, shouting ‘elbows up’ as if that is going to change the inevitable.  The pretending is strong amid the snow Mexicans. Their denial is a mass formation psychosis. Stunningly so.