Carney couldn't plan to make Canada look worse...

We capitulated late Sunday night, but there was an easier and better path on offer that Carney refused.

I’m not sure that Mark Carney and his gang of Liberals could have made us look worse than they have this weekend. On Friday, the Carney government informed the Trump administration that they would be going ahead with their plans to bring in the Digital Services Tax on Monday, June 30, 2025.

In response Trump announced that all future trade talks with Canada were suspended.

The Americans had asked for a 30 day pause on implementing the tax while negotiations on lifting tariffs on Canadian industries were ongoing and we said no to that. Then, just after 10pm ET on Sunday night, the Carney government announced that in order to continue trade talks, Canada would rescind the tax completely.

It’s not like it’s news to the Canadian government that the Americans are unhappy with us about the DST. The Biden administration said that it violated CUSMA and they started a trade panel against us. The Trump administration came in and also made it clear that they would not accept this tax going forward without reprisals.

How they see this in Washington…

In the eyes of the Americans, the DST violates Articles 14.4 and 15.3 of CUSMA.

In article 14.4, all parties, including Canada, agreed that “Each Party shall accord to investors of another Party treatment no less favorable than that it accords, in like circumstances, to its own investors.”

While article 15.3 states that, “Each Party shall accord to services or service suppliers of another Party treatment no less favorable than that it accords, in like circumstances, to its own services and service suppliers.”

On the face of it, Canada is likely in breach of CUSMA, the thing we keep accusing the Americans of being in breach of on the tariff front. We can’t demand they lift tariffs while effectively imposing a tariff via the DST.

And then, in the middle of talks to lift tariffs on Canadian industries, we said we would proceed with this new tax that doesn’t create a single new Canadian job but threatens many existing jobs in auto, manufacturing, steel and aluminum.

Maybe the worst negotiation tactic ever…

I’ve been hearing from Liberals for months that they were holding onto the DST to try and get something in return in the negotiations. Keeping the DST would allow us to ask for something in return is what they kept saying.

Now, we’ve given it up and have received nothing in return. Zero, zilch, nada.

It could have been different…

Had we proactively announced last week that we were suspending the DST while trade talks were ongoing, we would have looked like we were negotiating in good faith. By announcing that we will introduce legislation to rescind the legislation at the 11^th hour, we look weak, not just to Trump, but to the entire world.

So much for the “Trump whisperer” designation that CNN put on Carney last week.

Our PM, the supposed adult in the room, looks weak, desperate and like someone who isn’t holding any cards. Trump likes to put issues in terms of a poker game and right now, we’ve got a 7 and a 2.

We ain’t winning this hand; Carney’s bluff got called, and now we are begging for negotiations to continue. While the Carney Liberals are trying to play this as a good move, they aren’t promising to just pause the tax pending negotiations, they are promising to rescind it in full.

The June 30, 2025 collection of a $2-3 billion retroactive payment will be halted, and Minister Champagne will soon bring forward legislation to repeal the Digital Services Tax Act.

They tried to put this in the best light possible, stating that Canada would, “rescind the Digital Services Tax (DST) in anticipation of a mutually beneficial comprehensive trade arrangement with the United States.” Let’s be clear though, we capitulated.

Just to reiterate, if we paused this on Friday or before, we looked good, negotiating in good faith. Now, we look desperate to try and get a deal since we aren’t just pausing this but also promising to repeal existing legislation.

Before becoming a civil servant and then a central banker, Mark Carney spent 15 years working deals for Goldman Sachs. After his time as Governor of the Bank of Canada and the Governor of the Bank of England, Carney was Chair of Brookfield Asset Management, a huge global firm and was privy to many deals.

Carney just got played by a real estate huckster from Queen’s, New York, a man that Carney likely looks down his nose at.

This is not a good day for Canada, I take no joy in our defeat, but make no mistake this is a defeat.