Finance Minister François-Philippe Champagne confirmed that Canada will not delay the implementation of a digital sales tax, with the first payments due on June 30, despite objections from Donald Trump. The tax, which targets global tech giants, is a point of contention in current trade talks between the two countries.

The decision to move forward with the tax may escalate the trade war between the United States and Canada initiated by Trump earlier this year. However, maintaining the tax also provides Canada with leverage in ongoing negotiations to resolve the conflict.

According to reports by The Globe and Mail, eliminating the digital sales tax is one of the demands made by the U.S. in the current trade discussions with Canada, aimed at establishing a new economic and security agreement with the White House and potentially ending the trade dispute.

Finance Minister Champagne emphasized that the tax will be enforced as planned, stating, "That law was passed in Parliament. It applies, so that's where we are today." He also acknowledged that the future of the tax is being considered as part of broader discussions.

Prime Minister Mark Carney recently announced a 30-day target to reach a deal with Trump after a meeting at the Group of Seven summit in Kananaskis. The tax will impact companies such as Amazon, Google's parent company Alphabet, Meta, Uber, and Airbnb, subjecting them to a 3% levy on revenue from Canadian users, with a retroactive application resulting in a $2-billion bill for U.S. companies by the end of the month.

Various Canadian and U.S. business groups, organizations representing U.S. tech giants, and American members of Congress have all called for the tax to be either eliminated or put on hold. The digital sales tax imposes a 3% levy on Canadian revenue from digital services exceeding $20 million earned by companies with at least $1.1 billion in global revenue, including revenue from search engines, social media platforms, and online marketplaces.

Moving forward, U.S. companies are expected to pay up to $2.3 billion annually as a result of this tax.