CRA refunding 30 U.S. companies $148 million after scrapping digital services tax

Canada Customs and Revenue Agency (CRA) building photographed in Ottawa on Wednesday, Feb. 18, 2026. Photo by HYUNGCHEOL PARK/Postmedia

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The Canada Revenue Agency (CRA) is refunding more than $148 million collected as part of the digital services tax (DST) to 30 U.S.-based companies.

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The DST was a 3 per cent annual tax on digital services revenue generated in Canada by large tech companies, many of which are based in the U.S.

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However, the federal government rescinded the policy in June 2025 to advance trade talks between Canada and the U.S.

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Finance minister François-Philippe Champagne said in a statement at the time: “Rescinding the digital services tax will allow the negotiations of a new economic and security relationship with the United States to make vital progress and reinforce our work to create jobs and build prosperity for all Canadians.”

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Legislation to repeal the DST received royal assent on March 26, allowing CRA to begin refunding the money collected from companies before the tax was cancelled.

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“Before the government halted collection of the digital services tax on June 30, 2025, the Canada Revenue Agency collected approximately $647 million,” CRA media relations officer Nina Ioussoupova told National Post in an email.

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More than $148 million of the money collected came from businesses based in the U.S., the CRA has confirmed.

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“Thirty U.S.-incorporated businesses made payments to the Canada Revenue Agency totalling $148,226,051.17 in relation to the Digital Services Tax,” Ioussoupova said in a separate email.

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“These payments account for approximately 23% of the total revenue collected under the tax.”

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Of the total amount collected, $358 million was used to cover existing tax liabilities owed by the same taxpayers.

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By late April, about $154 million was refunded to taxpayers, including close to $4 million in interest, and the CRA planned to have the refunds completed by the end of that month.

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Over five fiscal years, from 2021–22 to 2025–26, the CRA received approximately $30 million to administer the digital services tax, covering the implementation of the new tax and related costs.

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The U.S. government views digital services taxes, which have been implemented by countries including the U.K., France, Italy and Spain, as unfairly targeting U.S. companies.

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In a post on Truth Social in August 2025, Trump said he would “stand up to countries that attack our incredible American Tech Companies.”

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“Digital taxes, digital services legislation, and digital markets regulations are all designed to harm, or discriminate against, American technology,” he wrote.

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He said that he would “impose substantial additional tariffs” on exports to the U.S. if the “discriminatory” tariffs weren’t removed.

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However, Washington later backed away from the threatened hikes after G7 finance ministers announced the U.S. would be excluded from the OECD-led global minimum tax regime.

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