Canada’s federal government has scrapped a controversial digital services tax that targeted U.S. technology giants such as Meta Platforms (META), Alphabet (GOOGL), and Apple (AAPL).
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The government of Canadian Prime Minister Mark Carney canceled the digital services tax late on June 29, just hours before it was to go into effect. The planned tax was 3% of the digital services revenue a technology company takes in from Canadian users above $20 million in a calendar year, and payments were to be retroactive to 2022.
The digital services tax would have impacted all of the major U.S. technology firms that also include Amazon (AMZN), Microsoft (MSFT), and Nvidia (NVDA). Cancellation of the tax comes after U.S. President Donald Trump suspended trade negotiations with Canada and threatened tariff retaliation over the measure.
An ‘Attack’ on Big Tech
Canada’s finance ministry said in a statement that the digital services tax was canceled in a bid to advance trade negotiations with the U.S. Prime Minister Carney’s government now plans to bring forward legislation in Parliament to rescind the digital services tax.
The neighboring countries will now resume trade negotiations aimed at reaching a deal by July 21, said the Canadian government. President Trump had abruptly called off trade talks on June 27 over the tax that targets U.S. technology firms, calling it an “attack” on Big Tech.
Canada is the second-largest U.S. trading partner and the largest buyer of U.S exports. Trump’s tariffs imposed on Canada in April have largely been suspended while trade negotiations are ongoing, although Canadian steel and aluminum products currently faces 50% duties on exports to America.
Is META Stock a Buy?
The stock of Meta Platforms has a consensus Strong Buy rating among 46 Wall Street analysts. That rating is based on 42 Buy, three Hold, and one Sell recommendations issued in the past three months. The average META price target of $720.24 implies 1.83% downside from current levels.
