DST, And Hills Not Worth Dying On

On Carney’s Negotiation

I’m utterly shocked to find out there’s gambling going on here, I must say.

Mark Carney has, of course, betrayed Canadians by … announcing that he’s rescinding the Digital Services Tax to “advance” the negotiations with Donald Trump. At least, that’s what he did if you are a fucking moron, because Mark Carney has to deal with Donald Trump. And it is worth reiterating the point that Donald Trump is a lunatic, and negotiating with a lunatic is not about good outcomes but doing the best with the limited options we have.

Mark Carney traded a tax whose capacity to raise revenue was limited and not at all clearly going to target corporate profits, versus Canadians who like to stream video or whatever, for progress in a negotiation that will, if successful, save us multiples of that. There is zero argument that the DST should have been a hill worth dying on in this negotiation, and every Liberal claiming that the DST should be one is just plainly wrong on this.

There’s an argument that the Carney government should have gotten more for the DST than they did - it’s being positioned by some as the price for restarting negotiations, though the government’s use of “advancing” negotiations is notable - but that’s not an argument for keeping the DST. What all of this is is an argument for not prejudging a negotiation in the middle of it, especially one where the other side has a child-like pathological need to be told he “won” negotiations.

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Let’s start with the fact that the couple of billion that the DST was going to bring in is a pittance in a $400B budget and in a trade battle that is and will continue costing us many multiples in subsidies and incentives to affected industries. If all you care about is budget balance and deficit reduction, you trade this every day and twice on Sunday for the kind of savings and growth dividend you’d get from a return to the Biden-era status quo.

Not that the politics back home should be the priority, but it’s also not a gift to the Conservatives, as much as Pierre Poilievre will claim he opposed it. In April, Poilievre told Radio Canada that he supported the Digital Services Tax, which is the kind of bipartisan leadership that this country needs more of. Just kidding, he said it in French hoping nobody would notice because the DST, and other efforts to strengthen Canadian (and therefore Quebecois) content and culture are deeply popular in Quebec. It’s a shame that he didn’t have the balls to say it in English too, but I don’t think Mark Carney will be taking a lesson in how to stand up for Canada when Poilievre wouldn’t even tell his MPs to not directly undermine his position.

So what do we have here? Maybe Carney gave this up too early, but we don’t know whether the Canadians aren’t saying what we got for it because we gave it up just to restart talks, or in exchange for concessions that will be made clear at the end of the process. We don’t know what we got, because we’re not in the room. It was incredibly easy, as I did, to predict that Carney would toss the DST away about as quickly as a frat boy tosses a used condom. It is much harder to judge the decisions from here, until we get the full deal.

Now yes, is Trump trying to add in a bunch of random grievances to a trade conversation? Sure! Nobody would call Trump’s ever moving target of a shit lost coherent or tight, but the fact that it’s an incoherent mess isn’t actually important. It’s nice to remind ourselves that America elected their dumbest Facebook Uncle to the job of President, but the fact that you and I know he’s a fucking idiot doesn’t change the fact that when he swore his oath of office he inherited the vice grip that every American administration has on our economic balls. His actions being illogical and idiotic doesn’t actually change the fact that he’s leading Goliath.

If in 3 weeks we don’t have a deal, then sure, I’ll be leading the charge on Carney for fucking this up. But the great mistake of the weekend of punditry, since Trump dropped that Truth Social post, is that they are judging the middle of a negotiation - where we very obviously don’t know the outcome, but don’t even know the pieces - as the end. We just saw the end of the second act and are convinced Macbeth will never give up the Throne, but that’s not how the play ends. There’s a whole process still to be gone through, and we have less information on the outside. When I’m at something resembling an information equal, I’m fully prepared to call my shot and destroy idiocy as I call it. But when I don’t even know what I don’t know, then I’m not arrogant to pretend I know.

Carney doesn’t deserve endless benefit of the doubt - these pages have been critical where needed and I have no intention of stopping that - but ditching the DST isn’t the moment where I’m going to call my shot. It’s a move that has a decent chance of working, in a negotiation with a lunatic who lives for NYT push notifications calling this a win for the President. As someone who is experiencing all of my friends having small children right now, I’m pretty sure their tiny humans are more reasonable than the current occupant of 1600 Pennsylvania Avenue. This matters.

If Carney doesn’t land the plane then I’ll rip him to shreds. Anybody doubting this can, and should, go back and read the utter descent into madness Justin Trudeau induced in me throughout 2024. When I feel the need to throw my fastball at a Liberal, it’s high and hard. But I don’t here. Justin Trudeau handed Carney an irritant to the bilateral relationship, and Carney just traded it in. We’ll see what he got for it, but no sane person should weep the death of the Digital Services Tax. Done properly, this’ll be the rare tax cut that raises revenues, create jobs, and genuinely solve problems for businesses. The fact that it’ll only do this because it might be the grease that kills bigger tariffs is on brand for 2025, and for the Trump era.

When it’s time to trash Carney, I’ll be at the front of the queue. It’s not.