Ottawa's 'caving' to Washington draws flak
By: By YANG GAO in Toronto
S E E D E D C O N T E N T
Ottawa's 'caving' to Washington draws flak
US President Donald Trump and Canadian Prime Minister Mark Carney take part in an arrival ceremony during the G7 Summit at the Pomeroy Kananaskis Mountain Lodge in Kananaskis, Alberta, Canada, June 16, 2025. [Photo/Agencies]
Canada's decision to scrap its digital services tax on US tech firms has reignited criticism over Ottawa's perceived concessions to Washington — even as bilateral trade talks resumed this week.
Adam Chapnick, a professor of defense studies at the Royal Military College of Canada, said the move appears to have been driven by pressure from the White House.
"Although the tax was not popular among Canadian businesses or with the Canadian Chamber of Commerce, it does appear that threats from the White House resulted in this concession," he said.
Canadian Prime Minister Mark Carney said on Sunday that trade negotiations with the United States have resumed after Canada withdrew its planned tax.
The next day, White House Press Secretary Karoline Leavitt said the decision proved Carney had "caved "to US President Donald Trump's demands, calling Canada's earlier vow to implement the tax "a mistake".
Chapnick said the remark was "fair from Washington's point of view", though premature from a broader perspective. "It is best to judge trade negotiations by their outcome, and we have not reached the outcome yet."
Critics of the Carney government have accused it of making too many concessions without securing tangible progress in return.
Yves-Francois Blanchet, leader of the regional political party Bloc Quebecois, said on social media that Ottawa had "made heavy compromises on defense, borders, and countertariffs, and now it is backing down on a widely supported measure to protect culture — still with nothing to show for it". He described the situation as "very concerning".
Don Davies, interim leader of the New Democratic Party of Canada, said on social media that the withdrawal of the digital services tax amounts to "pure caving in to Trump and his billionaire friends".
Chapnick rejected the notion that Canada had yielded too much. "Canada's commitments to increase defense spending and increase attention to border security were utterly consistent with the national interest," he said. "They were not concessions."
Negotiating with a Trump-led administration comes with its own challenges — regardless of the policy issues at stake — the most significant being that "its positions tend to shift without warning", he added.
'Economically prudent'
Although Carney's move has drawn criticism at home, Ron Stagg, a professor at Toronto Metropolitan University specializing in Canada-US relations, said it was a well-considered and economically prudent decision.
"(Carney was) faced with the choice of keeping the digital tax, and losing all hope of further negotiations over tariffs, as well as potentially facing more tariffs as retribution," he said.
"On the other hand, being subject to criticism in Canada for backing down, Carney chose the economically sensible choice."
Critics have accused Carney of capitulating to US pressure. Despite the harsh language, Stagg said the prime minister is unlikely to get distracted. "Recognizing this, Carney will ignore the insult, and bargain as if nothing happened."
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IMO it was a mistake to announce the imposition of that tax at this particular time, just before tariff negotions were to happen. On the other hand it may have been intentional, in order to give him this win to soften him up for providing concessions on more pressing tariff issues. We will see what transpires shortly.