Federal Government rescinds Digital Services Tax (DST) - Latest updates in Ontario's tourism industry
The Federal Government has rescinded its planned 3% Digital Services Tax (DST), which was set to take effect this past Monday on Canadian revenues earned by large global tech firms. This decision follows concerns raised by the United States Government and reflects Prime Minister Carney’s commitment to maintain momentum in trade negotiations set to conclude by July 21, 2025. Read more:
- Our Statement on Savvy Digital Service Tax (DST) Decision - Canadian Chamber of Commerce
- Trump tariffs: Foreign affairs expert says Canada rescinding digital services tax was "a bargaining chip"
On behalf of our members who raised concerns directly with us, TIAO worked closely with its provincial and federal partners late last year to ensure that the potential impacts of the DST were clearly understood. For Ontario’s tourism industry, the proposed tax would have increased marketing and data costs at a time when digital marketing already represents a significant share of marketing spend. These added costs would have created further inflationary pressure just when businesses need every dollar of marketing investment to deliver a strong return.
This policy change is well timed for our industry, and we hope it will contribute to resolving the current trade dispute. While Canada’s DST has been rescinded for now, a more multilateral approach — involving more countries working together — may re-emerge in the future.
In the spirit of diversification, this is also an important moment for tourism businesses to consider expanding their mix of domestic digital marketing channels and data service providers. If you have recommendations or success stories you’d like to share, please reach out to us — we will feature these in upcoming issues of TIAO’s newsletter to help operators adapt and thrive.
TIAO is also pleased with the recent announcement that the Ontario Government will allow alcohol to be served and consumed on large quadricycles, commonly known as pedal pubs, as of July 1 in Niagara-on-the-Lake, Toronto, Ottawa and Windsor (with space for 12 or more people travelling between restaurants and bars, with municipal bylaws in place to support). TIAO advocated directly for this policy change and is looking forward to supporting expansion across more communities in the future.
Thank you for your continued engagement and insights.
Sincerely,
Andrew Siegwart
President & CEO
TIAO