Trump will definitely be pushing hard for dairy concessions but Carney cannot afford to cave on supply management.

By Sheila Copps
First published in The Hill Times on July 7, 2025.

To cave or not to cave, that is the question.

According to Karoline Leavitt, the White House’s press secretary, Canada caved.

According to Prime Minister Mark Carney, his administration cancelled a tax initiative of the previous government in order to get trade negotiations back on track.

Carney knew there would not be too much push back in Canada since the tax was opposed by Conservatives and poorly understood by Canadians.

The trade-off of continuing negotiations in lieu of taxing American high-tech companies in the short term seems like a fairly easy call.

Many workers in the steel, aluminum, and auto industries are already seeing their jobs affected by American tariffs, so the sooner an agreement can be reached between Canada and the United States, the better.

But Leavitt’s crowing from the podium did allow Conservative Party Leader Pierre Poilievre to claim that the government has its elbows down in the fight for Canadian jobs.

To be fair, Finance Minister François-Philippe Champagne’s announcement of the cancellation of the Digital Services Tax was met with a major yawn by the public.

But those in the know understand that the tax mimicked a similar levy already imposed by the European Union, with countries like France and Spain already imposing a three-per-cent tax on companies providing certain digital services. In France, the tax is levied on firms with global revenues in excess of 750-million euros and in excess of revenues of 25-million in France.

Turkey has a DST more than double that of EU countries, with the levy weighing in at 7.5 per cent.

Canada has been a leader in finding ways to fund local content via the tax system, and it was fully expected in the streaming world that the digital tax passed last year was untouchable. It was not widely debated and as late as last week, Champagne confirmed the tax would be going ahead.

That was then and this is now. Carney obviously took a look at the big picture and decided he could afford to cancel the tax with little political punishment.

But there are other elements facing much more opposition if Carney plans to meet the deadline of July 21 for a trade agreement with the U.S. That was the timeline tentatively established by the American president and the Canadian prime minister at their G7 meeting in Kananaskis, Alta.

Trump keeps reinforcing his government’s opposition to Canada’s supply management system in our dairy industry.

That is one issue that is widely understood and broadly supported by all political parties.

It has even been subject to the provision that no government could eliminate supply management without a parliamentary vote.

The government and all opposition parties support the Canadian supply management system that limits imports of dairy products including milk and cheese, and adds heavy tariffs to some dairy items.

In reality, the heavy fees that Trump keeps referring to have never actually been applied because no American companies have imported enough dairy products into Canada to trigger the fee.

But on every occasion, Trump keeps referring to how “nasty” Canadian negotiators are, and how he would like to see the dairy system released from any agreement on supply management.

This is one hurdle that Carney will not be able to bypass as easily as he did with the DST.

The Bloc Québécois and the Tories have already indicated their support for retaining supply management. The only party that opposes it is the People’s Party, led by Maxime Bernier, which has no seats in Parliament. In fact, it was Bernier’s opposition to supply management that cost him the Conservative Party leadership in 2017. He was leading in 12 rounds of voting against Andrew Scheer and eventually lost the Tory leadership because of the support Scheer received from dairy farmers in Quebec.

Carney is committed to the July deadline for a trade agreement, but the pursuit of a deal will definitely put supply management on the line.

And this is one area where “elbows up” is required on the Canadian side. Carney cannot afford to cave on supply management ,and Trump will definitely be pushing hard for dairy concessions.

The political damage Carney would suffer from giving up on supply management is equally as important as the fight for steel, autos, and aluminum.

If Leavitt was crowing about Canada caving on the digital tax, she would be absolutely ecstatic if supply management were sacrificed to the larger trade agenda.

Carney’s elbows up strategy has worked so far. But the stakes are getting higher.

Sheila Copps is a former Jean Chrétien-era cabinet minister and a former deputy prime minister. Follow her on Twitter at @Sheila_Copps.

Whatever the Liberals do these days—even if it is groundbreaking, and puts $100-million into the creation of domestic news stories—they cannot win.

By Sheila Copps
First published in The Hill Times on December 4, 2023.

OTTAWA—The government’s Google announcement last week should have been met with applause all the way around.

Canada has always been a leader in new ideas and instruments to protect culture, and obviously the survival of local news is a key to spawning more Canadian content.

But whatever the Liberals do these days—even if it is groundbreaking, and puts $100-million into the creation of domestic news stories—they cannot win.

Pundits variously described the agreement with Google as “dodging a bullet,” a self-inflicted wound, and another cock-up by Prime Minister Justin Trudeau. Talk about kicking a guy while he is down.

We know the numbers for the Liberals look grim. According to the latest polls, they are running neck and neck with the New Democratic Party. But how that unpopularity can be expanded to include the government’s Google agreement is pretty hard to swallow.

The Canadian government has followed the lead of Australia, which was the first country in the world to regulate the social media landscape in an attempt to secure funding for domestic content.

This is one area where Canadians have a fair bit of experience, and the decision to take on Google, Meta, and the other social media behemoths was a courageous one. Some said the Liberals should just wait to take their lead from the G7 or the OECD. That advice would have meant no action, as the Americans are usually opposed to public intrusion into what they consider their media space.

The European Union has been making its own inroads into taking on big tech. The EU fought Apple in a decision last year as it moved to standardize chargers for smartphones and tablets sold in Europe. Canada announced a similar decision in the last budget, and the European market of 450 million people will receive a standard USB Type-C charging port by the end of next year.

As Europe takes on Apple, Canada goes for Google. One jaded journalist went so far as to claim the Canadian government was involved in a “shakedown.”

Globe and Mail columnist Andrew Coyne tweeted that there was “no actual legal, logical or moral case for forcing Google to underwrite the Canadian media.” He called the agreement “strictly opportunistic: 1) Google has a lot of money. 2) We want some. 3) Make them give it to us.”

In fact, there is plenty of precedent for content transmitters to chip in on Canadian story development. That model has been used in the television world since the private cable industry was required to establish a fund to support Canadian content.

Their fund morphed into partnership with the government via the Canadian Television Fund, and then into the Canada Media Fund, which currently invests $366-million annually into media production. That investment triggers $1.7-billion in industry activity in Canada, providing employment for more than 244,000 people.

As television and streaming collided through the introduction of internet media content creation, it made sense for the Canadian government to require new media players to do their part in the creation of content. As Google traffics in the news, it can also help to pay for local news creation, using a tried-and-true model that will now likely be copied by dozens of other jurisdictions around the world.

The Liberal government should be congratulated as a leader in public policy on the issue of social media transmission. Instead, even though last week’s announcement will assist in the survival of local media outlets, there were no kudos for Trudeau.

Conservative Leader Pierre Poilievre has already promised to trash the Google deal with the same vision he uses to promise defunding of the Canadian Broadcasting Corporation.

The Google story was not big news across the country as it was an inside-the-beltway negotiation, but the outcome of this new investment could be critical for the survival of local media in the next decade.

Most people may not care about the intricacies of public policy when it comes to the creation of Canadian content. But without government leadership, the chance to grow a dying news industry is slim to none.

Last week’s announcement should have been met with at least one day of positive coverage. But when the media decides that it is time for a change at the top, nothing—not even a trailblazing move to save media—will kill the main story.

The appetite for political change is fuelled by negative Trudeau stories on a daily basis.

That is not going to change.

Sheila Copps is a former Jean Chrétien-era cabinet minister and a former deputy prime minister. Follow her on Twitter at @Sheila_Copps.