Carney Is Too Pragmatic for his own good

Photo credit: The Canadian Press

Prime Minister Mark Carney was lightning quick to cave in to Donald Trump on the Digital Services Tax.

Yes, Carney is a pragmatic man, but perhaps too pragmatic for his and this country’s good.

Trump said last Friday he wanted the tax on the U.S. tech giants like Meta and Amazon to disappear. By Sunday, PM Carney made it happen, one day before the new tax (DST) was due to come into force.

That’s speedy action for the way most governments work. Canada is operating without a budget, Parliament is not in session, Ministers are just feeling their way in their portfolios. Carney certainly didn’t address Canadians on national television to explain why he was abandoning the tax.

The DST may not be the only tool to defend the independence of the Canadian digital media.  But why play, so easily, one of the main items in PM’s negotiating hand.

Afterall, many European counties have a system of DST in place now.  While the Trump administration does not like it, we must consider that the tech multinationals have large numbers of consumers in Canada and European countries, while their production and headquarters remain in the United States.

We have to ask whether these very large corporations should freely earn substantial profits from countries like Canada but pay minimal taxes here.

One can count the tech billionaires present who helped celebrate the inauguration of Trump’s second presidency, to see who Trump is catering to with the “United States First” positions he is taking.

An alternative, which Trump would no doubt hate even more, would be requiring the multinationals to provide an equity share to Canadian firms or governments.

Of course, Carney was putting his priority on reaching a new comprehensive trade deal with the U.S, supposedly by the July 21 target date. If it could be achieved that quickly it would be a miracle, given the extended negotiations in earlier trade agreements.

New Brunswick’s Dominic LeBlanc, the minister heading up the trade file for the Carney government, asserts that the decision to drop the DST should not be viewed as a precedent for another Trump priority: eliminating supply management programs in Canadian agriculture. 

Trump has long complained about Canada’s supply-managed dairy system, objecting to what he characterizes as high tariff rates on U.S. dairy exports to Canada. Trump made this one of his primary issues in the 2018 negotiation of the Canada-U.S.-Mexico Agreement (CUSMA); however, he signed the trade deal without addressing it.

Apparently, an elephant never forgets. Trump will not likely forget that Carney let the DST drop as he puts supply management back on his agenda.

PM Carney’s back-track on the DST came just two days before Canadians celebrated Canada Day as never before. We were confident that Carney had put to death Trump’s talk of Canada as the 51st American state.

Local people witnessed the largest and most patriotic Canada Day parade ever in Saint Andrews, N.B.  The town was jammed and the spirit for the event was lofty as never before. The red and white colours and the maple leaf were everywhere.

Our Prime Minister should be careful not to squander this new Canadian spirit which he did a great deal to help create.

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