Taxpayers call on Trudeau to scrap Digital Services Tax as US threatens trade action

From the Canadian Taxpayers Federation

“Trudeau is determined to make Canadians’ lives more expensive and he’s willing to risk a trade war with the United States to do it”

The Canadian Taxpayers Federation is calling on the Trudeau government to scrap its Digital Services Tax in the wake of warnings from the United States Trade Representative that the United States will “do what’s necessary” to respond to the Trudeau government’s new tax.

“Canadian consumers know that Trudeau’s Digital Services Tax is nothing more than a tax grab, plain and simple,” said CTF Ontario Director Jay Goldberg. “With providers virtually certain to pass along increased costs to consumers, Prime Minister Justin Trudeau is sticking Canadians with higher taxes and risking the possibility of a trade conflict with the United States.”

The DST targets large foreign companies operating online marketplaces, social media platforms and earning revenue from online advertising, such as Amazon, Facebook, Google and VRBO. It is a three per cent tax on all online revenue these companies generate in Canada.

The Trudeau government pushed its new DST through Parliament last month and plans to apply it retroactively to as far back as 2022.

Since the Trudeau government first explored the idea of imposing a Digital Services Tax three years ago, the USTR has repeatedly warned the United States would retaliate.

“Should Canada adopt a DST, USTR would examine all options, including under our trade agreements and domestic statutes,” said the USTR in 2022.

USTR Katherine Tai is now warning that the U.S. is looking at “all available tools” to respond to Trudeau’s new tax.

“Trudeau is determined to make Canadians’ lives more expensive and he’s willing to risk a trade war with the United States to do it,” said Goldberg. “It’s clear the Digital Services Tax must go.”

Related Topics:#CanadaUSTradeAction #CanadianTaxpayersFederation #DigitalServicesTax #JayGoldberg #TrudeauDigitalServicesTax

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White House to trim federal workforce through buyouts

Published on January 30, 2025

Todayville

From The Center Square

By Brett Rowland

The White House took steps to make good on its promise to cut the federal government down to size by giving federal workers a choice: return to the office full-time or leave with eight months of pay.

The Office of Personnel Management told federal workers Tuesday night that they have until Feb. 6 to decide to stay or go. If they step down, they will continue getting all pay and benefits and be exempt from in-person work requirements until Sept. 30.

However, the Trump administration said that even government employees who stay on could still eventually lose their jobs as the president reshapes the federal government and its workforce.

“If you choose to remain in your current position, we thank you for your renewed focus on serving the American people to the best of your abilities and look forward to working together as part of an improved federal workforce,” the email said. “At this time, we cannot give you full assurance regarding the certainty of your position or agency but should your position be eliminated you will be treated with dignity and will be afforded the protections in place for such positions.”

White House officials estimated that the in-office requirement will prompt 5% to 10% of federal employees to exit. The administration estimated it could lead to $100 billion in yearly savings. The White House did not provide information about how it reached that estimate.

A frequently-asked-questions document that went out with the email noted: “the federal workforce is expected to undergo significant near-term changes.”

The email also noted that “the majority of federal agencies are likely to be downsized through restructurings, realignments, and reductions in force. These actions are likely to include the use of furloughs and the reclassification to at-will status for a substantial number of federal employees.”

The U.S. government employs about 2.4 million federal workers, excluding the military (about 1.3 million active-duty military personnel) and U.S. Postal Service (about 600,000 employees), according to 2024 Pew Research report. That report noted that the federal government employed 1.87% of the entire civilian workforce. That percentage includes postal employees, according to Bureau of Labor Statistics data.

The American Federation of Government Employees, the largest federal employee union representing 800,000 workers, warned of “unintended consequences.”

“Purging the federal government of dedicated career civil servants will have vast, unintended consequences that will cause chaos for the Americans who depend on a functioning federal government,” AFGE National President Everett Kelley said in a statement. “This offer should not be viewed as voluntary. Between the flurry of anti-worker executive orders and policies, it is clear that the Trump administration’s goal is to turn the federal government into a toxic environment where workers cannot stay even if they want to.”

The eight months of pay and benefits offered to federal employees who take the deferred resignation option is more generous than what some private employers have offered in recent years. When Google dismissed 12,000 employees in 2023, it offered workers a minimum of 16 weeks’ salary, plus two weeks for every additional year at Google

Trump has issued a flurry of executive orders as he looks to shake up the federal government during his second term in the White House. He has ordered workers back to the office; called on federal agencies to get rid of diversity, equity and inclusion programs; and warned employees to report efforts to disguise such programs or face consequences.

At his inauguration, the president promised Americans that their federal government would operate more efficiently with the creation of the Department of Government Efficiency, or DOGE. Tesla CEO Elon Musk is heading up the new advisory group.

Trump previously promised to cut “hundreds of billions” in federal spending in 2025 through the reconciliation process. Musk previously said DOGE aims to cut $2 trillion in federal spending, but expects to actually reach about half of that goal.

Earlier this month, a Congressional watchdog found it was again unable to determine if the federal government’s financial statements were reliable. The federal government reported net costs of $7.4 trillion in fiscal year 2024, but it couldn’t fully account for its spending. The U.S. Government Accountability Office, which is Congress’s research arm, said that the federal government must address “serious deficiencies” in federal financial management and correct course on its “unsustainable” long-term fiscal path.

Brett Rowland

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Trump’s executive orders represent massive threat to Canadian competitiveness

Published on January 29, 2025

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From the Fraser Institute

By Kenneth P. Green

Donald Trump had a busy first day back on the job. From his desk in the Oval Office, President Trump signed a suite of executive orders including on energy and regulation, with major implications for Canada. He’s clearly rejected the primacy of a regulatory state (in favour of the legislative state), put a lock on the growth of U.S. regulation, and launched regulatory and cost controls. Essentially this means the U.S. will systemically deregulate while Canada is regulating its economy ever more heavily and broadly, making our economy even less competitive with the U.S.

Trump has also put paid to the fallacy of the great electric vehicle (EV) transition by pulling the plug on the U.S. EV mandate and federal consumer subsidies for EVs. Of course, now that the U.S. will not mandate EVs in large numbers, the massive investments Canada has made in EV and battery technology and manufacturing—on the expectation of selling EV parts and vehicles in the U.S. market—will likely see little return.

Trump’s withdrawal (for a second time) from the Paris climate agreement also puts U.S. policy further at odds with Canada. While Canada will spend huge amounts of money to attempt to comply with its climate commitments under the agreement, and hurt its energy and natural resource sectors in the process, the U.S. will not. In fact, the Trump administration will likely undo many of the things that have been done in the name of implementing the Paris agreement.

Trump‘s declaration of an energy emergency and his call for a massive increase in energy production by is also a direct threat to Canada’s energy economy. As we have seen in the past, the Americans can move very quickly to increase the supply of oil and natural gas when they put their mind to it and when regulations don’t stand in the way. A U.S. energy surge could lead to a flood of oil and gas production pretty quickly, leading the U.S. to need less and less Canadian oil and gas (as Trump has flamboyantly proclaimed).

Trump also wants to expedite energy project reviews and approvals, the exact opposite to the Trudeau government’s approach, which has frustrated the building of new pipelines and other projects. This will facilitate the U.S. ability to increase energy and natural resource production at a pace Canada cannot hope to match.

Simply put, setting aside Trump’s threatened tariffs, his day-one executive orders pose a serious threat to Canada’s energy and natural resource sectors, which remain a vital source of prosperity and revenue, and merit an immediate response from our federal government.

In an ideal world, Canada would harmonize its policy approach to the U.S. on energy and natural resources, which has, in fact, been a historical norm. But unfortunately for Canadians, the Trudeau government will likely reject Trump’s policy reforms and continue its pro-administrative state, anti-energy, anti-resource economic philosophy. And given Prime Minister Trudeau’s recent actions to prorogue Parliament, President Trump’s executive-order barrage won’t face a meaningful Canadian response for months, letting the U.S. steal a massive march on energy, natural resource and regulatory policy reforms over a Canada sitting on its hands.