Canada News Roundup: Goodbye Digital Services Tax, Hello Reciprocal Tariffs, and Flagpoles are Selling like Hotcakes
July 6, 2025
💻 Trump Threatens, Carney Repeals Digital Services Tax
Canada had planned a 3% Digital Services Tax (DST) on revenue from U.S. tech giants—Google, Meta, Amazon—revenues aimed to raise around C$7 billion over five years. But when Trump responded by pausing trade negotiations and threatened “blatant attack” tariffs, Ottawa dropped the tax hours before it was to be collected—and resumed talks toward a July 21 deadline.
This wasn’t simply diplomatic give-and-take—it reads like pressure-driven retreat. Carney effectively ceded to Trump’s demands, restoring talks but raising eyebrows about Canada’s ability to stand firm under U.S. pressure. The move spares U.S. tech giants an estimated US$500 million to $2.3 billion annually, despite Ottawa’s original intention to ensure fairness from digital players.
Our Take: The decision to repeal the Digital Services Tax reflects a clear prioritization of trade stability over unilateral domestic tax measures. Given the stakes—potential tariffs, frozen negotiations, and broader uncertainty—it is understandable that Ottawa chose to de-escalate rather than risk a trade rupture.
At the same time, the move highlights the degree to which Canada remains exposed to shifts in U.S. political pressure. While the repeal may buy time at the negotiating table, it also raises longer-term questions about how much policy flexibility Canada truly has when its largest trading partner decides to draw a line.
💸 Reciprocal Tariffs May Soon Take Effect, Again, Maybe, Perhaps
Mark your calendars for July 9—or maybe don’t. That’s the supposed deadline for Trump’s so-called “reciprocal tariff regime,” which may or may not impose a 10% baseline tariff on countries that haven't struck a bilateral deal. But in classic fashion, officials now suggest that the timeline might be extended… or modified… or skipped entirely. Canada was exempted in April. Might be exempted again. Or not. Depends on the day. Depends on the tweet.
Trade insiders describe the policy as “flexible,” and are floating the idea of “rolling exemptions” or an “extended dialogue window.” Markets are calling the whole thing “confusing.” Meanwhile, Canadian exporters are holding their breath—and their shipments—because no one wants to move product into a tariff trap that could spring at any moment.
Our Take: This isn’t trade strategy—it’s regulatory improv. Imagine running a business where your largest trading partner sets deadlines, floats penalties, then shrugs and says, “We’ll see.” Canada's in a position familiar to anyone who’s ever dealt with a vague landlord or a passive-aggressive dinner guest: waiting, smiling politely, and trying not to flinch until the next decision gets made—or doesn’t.
🚩 Flagpoles Are Flying Off the Shelves Ahead of Canada Day
Flag and flagpole sales are surging across the country in the lead-up to Canada Day, with retailers reporting record-high demand for both large outdoor poles and hand-held flags. One supplier told CTV they’ve seen a 35% increase in flagpole orders and a 75% spike in flag sales, calling the response “unlike anything we’ve seen in years.”
Much of the surge appears to be consumer-driven—a visible, retail-level expression of economic and national solidarity in the midst of ongoing trade tensions with the U.S. Whether it’s about pride, politics, or just putting something on the porch, it’s clear that a growing number of Canadians want to be seen standing behind their country. Literally.
Our Take: You can read a lot into a surge in flag and flagpole sales—pride, solidarity, a little quiet defiance. But let’s be honest: when a country starts investing en masse in five-foot metal poles just to say “we’re still here,” it’s probably not just about decor.
🏭 Buy Canadian Push Gives Local Businesses a Boost
CTV is reporting that small Canadian businesses—particularly in Ottawa—are seeing a noticeable lift in sales thanks to a growing Buy Canadian movement. Several shop owners described Canada Day sales as “phenomenal,” crediting a shift in consumer behaviour that goes beyond just flag-waving: customers are actively seeking out Canadian-made products, asking more questions about origin, and making deliberate spending choices.
While seasonal patriotism always plays a role in early July, this year feels different. Owners say this isn’t just a holiday bump—it’s part of a longer pattern. Some report new customers coming in specifically because they want to support domestic brands, and others are seeing returning customers who now ask what else in the store is Canadian-made.
Our Take: It turns out economic nationalism isn’t just something politicians talk about—it shows up in checkout lines, too. And for the first time in a long time, small Canadian businesses aren’t just surviving a trend—they’re becoming the trend.
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