Carney Was Right to Scrap the Digital Services Tax—Now Let’s Learn From It

On Sunday night, the Carney government made the right call. It rescinded the Digital Services Tax (DST)—a 3% levy on revenue earned by digital companies offering services to Canadians. That decision deserves recognition. It was smart, it was timely, and it sends a message that Canada might still be willing to course-correct before doing more damage to our economy.

Let’s be clear: the DST was always going to hit more than just foreign tech giants. It was a tax on digital tools that Canadians rely on every day—advertising platforms, e-commerce services, and software used by small businesses to run efficiently. The cost would have landed squarely on consumers and entrepreneurs. And while it was packaged as a fairness measure, it risked retaliation from the United States and threatened to escalate into a full-blown trade dispute. It never made economic sense.

So yes, pulling it back was the right move. But now that it’s gone, let’s not just pat ourselves on the back and move on. Let’s actually learn something from it.

The lesson here is simple: business confidence matters. Investment matters. And taxes—even when politically convenient—have consequences. If we want a strong economy, we need to stop treating private-sector capital like it’s a bottomless ATM and start creating an environment where investment is welcomed, not punished.

For years, Canada has been sending the wrong signals to the people who build and grow companies. High personal taxes. High corporate taxes. Carbon taxes. Payroll taxes. Layered regulations. Constant talk of new levies and redistributions. What investor wants to deal with that?

We’ve already seen the damage. Canada has lost billions in private capital investment over the last decade. Major projects have been shelved or outright abandoned. Companies are pulling back, not expanding. It’s not just because of global conditions. It’s because our domestic climate has become more focused on spending than growth, more concerned with appeasing interest groups than with building durable, long-term economic strength.

This is what the Digital Services Tax represented: another step in the wrong direction. That’s why I criticized it when it was introduced. It wasn’t strategic. It wasn’t well-timed. It was a short-term cash grab dressed up as economic fairness—and it almost did real damage to our most important trade relationship.

So credit where it’s due. Prime Minister Mark Carney and his government recognized the risk and reversed course. That takes political judgment. And frankly, it’s a shift from the kind of stubborn policymaking we became used to under Justin Trudeau. This shows that Carney is capable of changing direction when the data—and the market—demand it.

But it can’t stop here.

Rescinding the DST was a smart decision. Now we need to build on it. That means taking a serious look at how we attract investment again. It means asking what’s holding business back in Canada—and being willing to fix it.

We cannot continue to rely on government social programs and public service jobs as the backbone of our economy. That model is bloated, expensive, and unsustainable. If we’re serious about long-term growth, we need to focus on what creates wealth—not just what redistributes it.

That means resource development. It means scaling up private enterprise. It means building business relationships across borders and making Canada competitive again. Not through slogans. Not through subsidies. But by creating a tax and regulatory climate that encourages companies to invest, hire, and stay.

Foreign investors, multinational firms, and even homegrown entrepreneurs watch policy signals closely. And what the DST told them—until Sunday night—was that Canada was still a risk. That the rules could change without warning. That a government hungry for revenue might come for them next.

Scrapping the tax doesn’t erase that impression, but it helps. Now the task is to build trust—through stable policy, responsible spending, and a relentless focus on economic growth.

The next time Ottawa considers a policy that makes business harder or investment less attractive, it should remember what happened here. The backlash wasn’t about ideology. It was about practicality. Businesspeople—especially those deciding where to allocate billions in capital—don’t respond to talking points. They respond to stability, clarity, and opportunity.

This reversal is an opportunity in itself. The Carney government can now position Canada as a more serious place to do business. But only if it follows through.

That means resisting the urge to replace the DST with another “revenue tool.” It means pulling back on the endless stream of taxes, fees, and red tape that strangles private growth. It means sending a clear message: Canada is open to investment, focused on growth, and done punishing the very people who build our economy.

So yes, I’m pleased to see this decision. It was the right one, made at the right time. But what matters now is what comes next.

Rescinding the Digital Services Tax was a smart move. Let’s not waste it. Let’s use it as a turning point—and finally start treating private investment like the foundation it is, not the fallback when everything else fails.