Elbows Down for Mark Carney on the Digital Services Tax

A late-night, long-weekend post from the GC Newsroom X account indicates that the Government of Canada is backing down on the Digital Services Tax, following an explicit threat from U.S. President Donald Trump.

The US President threatened to immediately cease all trade negotiations with Canada until the tax issue was resolved.

During this year’s general election, Carney famously adopted an “Elbows Up” approach to Donald Trump, reassuring Canadian boomers that he would defend national sovereignty and stand up for Canadian interests.

For his part, Trump mused that Canada would be better off as America’s “51st state” and breathed life into the Liberal Party, instilling just enough fear in Canadians to buy into Carney’s promise to stand up to Trump.

But the election is over – and now Carney appears to have rolled over on a core Liberal policy.

The Digital Services Tax would have imposed a 3% levy on revenue from digital services like online advertising, social media, and user data sales by large tech companies.

It was originally set to be retroactive to 2022, with the first payments due on June 30, 2025. The tax targeted firms like Amazon, Google, and Meta, and U.S. companies faced an estimated $2-3 billion bill.

Both Donald Trump and former President Joe Biden have opposed the DST, viewing it as discriminatory against American firms.

On June 27th, this came to a head with Trump announcing the immediate termination of all U.S.-Canada trade talks, calling the DST a “direct and blatant attack” on the U.S. He threatened new tariffs within seven days, citing Canada’s refusal to pause the tax.

Earlier this month, Canadian Foreign Minister Francois Phillipe Champagne promised that the DST would go through as planned.

Rick Tachuk, President of the American Chamber of Commerce in Canada advocated for a pause of the Digital Services Tax in an op-ed published just five days ago.

The Liberals promised to introduce the tax during the 2019 general election and the Parliamentary Budget Officer had projected it could raise $7 Billion from US companies over 5 years. Its implementation had been delayed to bring others – in particular the EU – onside.

Canada has faced renewed pressure from its primary trading partner since re-electing Donald Trump as President in 2024. Trump argues he’s simply correcting a trade imbalance between the U.S. and Canada. His trade policy has had significant effect on key Canadian industries such as steel, aluminum, and auto manufacturing.

Meanwhile Canadian Prime Minister Mark Carney – elbows up or not – is finding that Canadians are starting to question his ability to handle the pressure – given how quickly this collapse has come.

Yikes! Patrick Brazeau faints in the Senate

It appears that Former Conservative Senator Patrick Brazeau fainted in the Senate today as he rose to debate Prime Minister Mark Carney’s fast-tracked major projects bill.

It’s been a scorcher of a week in Ontario with temperatures with “dangerously hot” weather in Ottawa peaking at 35°C on Monday.

The bill being debated in the Senate grants the Carney government powers to accelerate project approvals and has been criticized by Indigenous and environmental groups for bypassing proper consultation and democratic process.

Brazeau, an indigenous Senator, was rising to ask a question to Conservative Senate leader Leo Housakos. Indigenous groups are concerned the Carney bill doesn’t mention “free, prior and informed consent.” Paramedics attended to Brazeau who was reportedly conscious. Staff say he appears to be recovering.

Patrick Brazeau was originally appointed to the Senate of Canada in 2008 by Prime Minister Stephen Harper. He was born in Maniwaki, Quebec. Brazeau is a member of the Kitigan Zibi Anishinabeg First Nation and became one of the youngest senators in Canadian history. Before his appointment, he served as the National Chief of the Congress of Aboriginal Peoples, advocating for the rights of off-reserve Indigenous peoples. He’s been an outspoken and polarizing figure on Parliament Hill and has often clashed with other Indigenous leaders. He famously participated in a charity boxing match with then-future Prime Minister Justin Trudeau – which was broadcast on Sun News.

Brazeau’s political career has seen its share of controversy. In 2013, he was suspended from the Senate without pay over a housing expense scandal and later faced charges in unrelated matters in Gatineau, Quebec. The scandals significantly impacted his public image.

Patrick Brazeau now sits in the Senate as a non-affiliated member and advocates for Indigenous issues, alcohol addiction awareness, and mental health.

UPDATE: He’s doing better.

Patrick Brazeau gets a haircut from Justin Trudeau
Patrick Brazeau gets a haircut from Justin Trudeau

Damien Kurek resigns so Pierre Poilievre can lead

Battle River–Crowfoot MP Damien Kurek officially resigned from Parliament today. The move will trigger a by-election for the riding where Pierre Poilievre will throw his hat into the ring in order to secure a seat in the the House of Commons.

Damien Kurek and Pierre Poilievre
Damien Kurek and Pierre Poilievre

Despite growing the Conservative seat count and the party’s popular vote, the Conservative leader lost his own seat to Liberal Bruce Fanjoy in the riding of Carleton. Poilievre had held the Ottawa region seat for 21 years.

Battle River–Crowfoot is a rural Alberta riding which occupies the space East of Highway 2 between Calgary and Edmonton. Poilievre volunteers have already started door knocking in the riding in anticipation of a by-election to be called within six months. For his part, Prime Minister Mark Carney has indicated that a by-election will happen sooner rather than later.

Former Conservative leader Andrew Scheer taken up leadership duties in Parliament while Poilievre maintains his status as leader of the Conservative Party of Canada.

Poilievre will face a leadership review likely in January of 2026 at the upcoming Conservative policy convention. Poilievre still enjoys widespread support within the party.

The collapse of Jagmeet Singh‘s NDP and the agitation of US President Donald Trump to remove Justin Trudeau and then install Mark Carney over a kayfabe fight on trade and sovereigty proved to be catastrophic for a Conservative Party that was on its way to forming a majority government just months ago.

So, Damien Kurek steps into the role of ‘good guy’ and steps aside so Pierre Poilievre can take his seat in the Commons. Perhaps we’ll be calling him Senator Kurek some day?