The Big Story Did Carney capitulate? Are we still "Canada Strong"?
Jul 2, 2025
Lori Turnbull, a political scientist and professor at Dalhousie University, joins the discussion on Canada's recent trade negotiation strategies amid the Trump administration's pressures. They dive into the controversy surrounding the rescinded digital services tax, exploring whether this capitulation signifies a tactical retreat or undermines Canada's position. The conversation navigates the complexities of cross-border negotiations, the role of political egos, and the implications of these moves on Canada-U.S. relations as the July 21st deadline looms.
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DST Removal Was Strategic
- The digital services tax (DST) removal was likely expected and not a capitulation by Prime Minister Carney.
- The $2 billion annual revenue from DST isn't worth risking broader US trade relations and agreements.
Know What To Concede
- Conceding the DST was a low-stakes strategic move, protecting stronger Canadian interests like supply management and steel.
- Managing Trump's ego by letting him "win" some battles helps in broader negotiations.
Canada Controls Policy
- Canada's government chooses which policies to keep or shelve based on national interest, not dictated by the US.
- Carney will stand firm on important issues even if it causes friction, but DST wasn't one of them.