Share on LinkedInShare on LinkedIn

ARTICLE · 02 JULY 2025

Software And IT Solutions: Update Regarding The Digital Services Tax

MLT Aikins LLP
MLT Aikins LLP
Contributor
MLT Aikins LLP

MLT Aikins LLP

FIRM OVERVIEW MLT Aikins is a full-service business law firm of more than 375 lawyers with a deep...

View firm profile
Explore more from MLT Aikins LLP

The Government of Canada has announced that it has rescinded the Digital Services Tax (DST) in order to advance broader trade negotiations with the United States. For now, the June 30, 2025, collection of the DST...

CanadaInternational Law
Karas Elbardisy
Karas Elbardisy
Nicolas A. Joubert
Nicolas A. Joubert
Author LinkedIn connections

Update 06/30/2025: The Government of Canada has announced that it has rescinded the Digital Services Tax (DST) in order to advance broader trade negotiations with the United States. For now, the June 30, 2025, collection of the DST will be halted. We will continue to monitor the impact of ongoing trade negotiations and provide updates as necessary.

In a previous article, we highlighted that Canada's relatively new digital services tax could become a relevant factor in U.S.–Canada trade relations and could impact whether tariffs are imposed on software and other digital services.

On June 27, 2025, President Trump announced that the United States is immediately terminating all discussions on trade with Canada as a result of Canada's digital services tax, which Canada begins collecting from foreign and domestic technology companies as of Monday, June 30, 2025.

We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.

Register for freeORLog in

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

View source

Related Articles

Legal Intelligence Newsletters: sign up for the latest legal and regulatory news on your chosen topics

Read more about

See more popular content from

Article

Canada Announces New Counter-Tariffs And Support Measures Following US Tariff Actions

Canada has announced sweeping counter-tariffs ranging from 15% to 50% on approximately C$27.6 billion of US imports, effective September 8, 2026, in direct response to President Trump's 50% Section 338 tariffs on Canadian goods. The measures target key sectors including steel, aluminum, dairy, appliances, and electronics, while the federal government simultaneously rolls out C$7.5 billion in support for affected businesses and workers. Understanding whether products qualify as US goods under Canada's markin
CanadaInternational Law
Cassels
Cassels
Article

From Duties To Import Bans: The Canada–U.S. Tariff War After The Collapse Of Negotiations

The United States has escalated its trade dispute with Canada by imposing import bans on alcoholic beverages, dairy products, and motorcycles under Section 338 of the Tariff Act of 1930, while Canada responds with matched counter-tariffs on $27.6 billion worth of U.S. goods. Following the collapse of bilateral negotiations in August 2026, both nations have entered an unprecedented phase of trade restrictions that extends beyond traditional tariffs to include procurement exclusions and threatens further auto
GlobalInternational Law
Borden Ladner Gervais LLP
Borden Ladner Gervais LLP
Article

Canada’s Counter-Tariffs On US Goods: A Primer On What Canadian Businesses Need To Know

Effective September 8, 2026, Canada implemented retaliatory tariffs on certain U.S. goods in response to the initial 50% tariffs imposed by the US under Section 338 of the Tariff Act of 1930. To operationalize these measures, the Canada Border Services Agency (CBSA) issued Customs Notice 26-23, establishing binding administrative rules on how the surtax will be applied, calculated, and collected.
CanadaInternational Law
Fasken
Fasken
Article

Provisional Duties On Chinese Plywood

The Canada Border Services Agency has issued a preliminary determination imposing provisional anti-dumping duties ranging from 0% to 227.5% on decorative and non-structural plywood imports from China, effective August 24, 2026. With the Canadian International Trade Tribunal scheduled to hold public hearings in November 2026, the significant disparity between duty rates for cooperative versus non-cooperative exporters underscores the critical importance of timely participation in CBSA investigations.
CanadaInternational Law
Millar Kreklewetz
Millar Kreklewetz
Article

Gloves Off: Canada Answers U.S. Section 338 Tariffs Dollar-for-Dollar As Washington Escalates With Import Bans

Canada and the United States have entered a new phase of trade conflict, with Canada implementing retaliatory surtaxes on C$27.6 billion of U.S. goods while the United States escalates beyond tariffs to outright import prohibitions on Canadian alcohol, dairy products, and motorcycles. The dispute now extends into government procurement policy, raising questions about compliance strategies and supply chain restructuring as both nations tighten customs enforcement.
CanadaInternational Law
McCarthy Tétrault
McCarthy Tétrault
Article

The Trade War Tit-for-tat Continues: United States Responds To Canada’s Retaliatory Surtaxes With New Tariffs And Import Prohibitions

Canada and the United States have escalated their trade war with new retaliatory tariffs and import prohibitions taking effect in September 2026. What specific goods are now subject to these measures, and how do the complex layers of tariffs interact to impact cross-border commerce? This comprehensive analysis breaks down the latest developments in the deteriorating Canada-U.S. economic relationship.
CanadaInternational Law
Osler, Hoskin & Harcourt LLP
Osler, Hoskin & Harcourt LLP
Article

Canada Imposes Counter-Tariffs On C$27.6-Billion Of U.S. Imports, Effective September 8, 2026

Canada has announced C$27.6-billion in counter-tariffs on U.S. imports, effective September 8, 2026, targeting over 700 product classifications across steel, aluminum, dairy, electronics, and other sectors. The measures represent a dollar-for-dollar response to U.S. Section 338 tariffs, with rates ranging from 15% to 50% depending on the product category. The government has also introduced a C$7.5-billion support package for affected Canadian workers and businesses.
CanadaInternational Law
Blake, Cassels & Graydon LLP
Blake, Cassels & Graydon LLP
Article

Canada And The European Union Chart A New Course: Beyond CETA Toward A Strategic Economic Partnership

European Commission President Ursula von der Leyen has invited Canada to become the first associate member of the EU, with Prime Minister Mark Carney accepting the proposal to pursue an "Alliance for the Future." The partnership would build on existing bilateral agreements with Germany, Spain, and Italy, potentially enabling free flow of goods, services, and workers across strategic sectors including energy, critical minerals, artificial intelligence, defence, and advanced manufacturing.
GlobalInternational Law
Gowling WLG
Gowling WLG
Article

Elbows Back Up: U.S. Section 338 Tariffs, Canada’s Retaliatory Surtaxes And The Current Tariff Landscape

As Canada and the United States escalate their trade dispute with new retaliatory tariffs, businesses face mounting compliance challenges across multiple sectors. This analysis examines the comprehensive tariff landscape affecting bilateral trade, including Canada's September 8, 2026 surtaxes on U.S. imports and the corresponding American section 338 tariffs, detailing rates, exemptions, and the legal frameworks governing these measures.
CanadaInternational Law
Osler, Hoskin & Harcourt LLP
Osler, Hoskin & Harcourt LLP
Article

CBSA Anti-Dumping And Countervailing Duty Investigations: Truck And Bus Tires From China – What Producers, Exporters, And Importers Need To Know

Canada has initiated anti-dumping and countervailing duty investigations into truck and bus tires from China, with preliminary determinations expected by November 30, 2026. Producers, exporters, and importers—including companies from Korea, Japan, and Singapore with Chinese operations—face critical September and October deadlines to submit comprehensive responses or risk significantly higher duty rates.
CanadaInternational Law
Gowling WLG
Gowling WLG
Article

President Trump Announces U.S. Counter-tariffs On Canada: Are They Lawful?

President Trump has invoked Section 338 of the Tariff Act of 1930 to impose new counter-tariffs on Canadian goods including dairy, alcohol, motorcycles, and metal products. The legality of this rarely-used statutory provision remains untested in court, raising questions about presidential tariff authority under the U.S. Constitution. Legal scholars debate whether Section 338 has been superseded by later trade legislation, while the administration argues Canada's retaliatory measures constitute discriminator
GlobalInternational Law
MLT Aikins LLP
MLT Aikins LLP
Article

Amendments Streamline Project List Under Impact Assessment Act

The Government of Canada has amended regulations under the Impact Assessment Act to streamline environmental reviews for major infrastructure projects, particularly interprovincial pipelines. These changes shift regulatory responsibility for certain energy projects to the Canada Energy Regulator while removing other project types from federal review following the Supreme Court's 2024 constitutional ruling.
CanadaEnvironment
MLT Aikins LLP
MLT Aikins LLP
Article

Permit Me To Explain: Bill C-39’s Plan To Build Canada Faster

The Canadian government has introduced Bill C-39, the Building Canada Strong Act, proposing to compress federal project approval timelines from five years to one year through consolidated permitting and streamlined processes. The legislation also modernizes transportation infrastructure through National Trade Corridors and reforms labour relations by strengthening collective bargaining while clarifying ministerial powers to intervene in work stoppages.
CanadaGovernment, Public Sector
MLT Aikins LLP
MLT Aikins LLP
Article

AI Data Centres In Canada: Legal And Regulatory Considerations For Developers And Investors Looking To Build

Developing AI data centres in Canada requires navigating complex corporate structuring, financing arrangements, regulatory approvals, energy supply agreements, real estate considerations, environmental permitting, and stakeholder engagement across multiple jurisdictions. This comprehensive guide examines the legal and regulatory frameworks governing the physical infrastructure side of data centre development, from site selection and power procurement to Indigenous consultation and municipal approvals.
CanadaEnergy and Natural Resources
MLT Aikins LLP
MLT Aikins LLP
Article

Not Beyond Reproach: Alberta Court Confirms Jurisdiction Over Alberta Energy Regulator

The Alberta Court of King's Bench has confirmed its jurisdiction to grant injunctive relief against the Alberta Energy Regulator despite a broadly worded statutory privative clause. This landmark decision, arising from Sumerian Oil & Gas's application to stay a suspension order affecting approximately 900 wells, represents one of the first considerations of the Supreme Court of Canada's recent Democracy Watch ruling and may significantly impact future disputes involving AER orders.
CanadaLitigation, Mediation & Arbitration
MLT Aikins LLP
MLT Aikins LLP