Tech, Trade and Tariffs Update

Feb 14, 2025 – This week has been pivotal for Canada’s tech and trade landscape. The AI Action Summit in Paris reinforced Canada’s leadership in ethical AI governance, while Canadian premiers engaged with senior staffers in Washington to address escalating trade tensions. Here are the key updates:

1. U.S. Retaliatory Tariffs & Canada’s Digital Services Tax

President Trump announced plans for retaliatory tariffs targeting Canada’s Digital Services Tax (DST), arguing it unfairly impacts U.S. firms. The DST applies to businesses earning over $20 million in Canadian revenue through online user engagement. Additional tariffs and procurement restrictions remain under discussion.

This follows the planned 25% tariffs on Canadian steel and aluminum set to take effect in March, with potential future measures on semiconductors and pharmaceuticals. These tensions could raise costs for digital services, disrupt supply chains, and create regulatory hurdles. USMCA trade discussions remain active.

2. Finance Minister LeBlanc & Canadian Premiers in Washington

On February 12, Canadian premiers and Finance Minister Dominic LeBlanc met with U.S. officials to advocate against tariffs and strengthen trade ties.

• Tariff & Economic Impact: Premiers warned that tariffs would increase costs, disrupt supply chains, and reduce competitiveness for North American industries.
• Energy & Trade Security: Canada reaffirmed its role as a stable energy supplier to the U.S. and emphasized the need for continued cooperation.
• Labour Market Impact: Labour leaders noted that tariffs could put millions of Canadian jobs at risk, alongside U.S. job losses due to supply chain disruptions.
• Regulatory Coordination: Canadian officials urged streamlined regulations to mitigate policy-driven trade barriers.

3. AI Action Summit in Paris

The AI Action Summit in Paris (Feb 10-11) convened over 100 countries to discuss the future of AI regulation and governance.

• Global AI Governance: Canada signed the Council of Europe Framework on AI & Human Rights, reinforcing ethical AI commitments.
• Public Interest AI Platform: Canada co-launched a global AI collaboration hub to bridge digital divides and promote AI transparency.
• AI & Energy Infrastructure: TECHNATION President & CEO, Angela Mondou, moderated a roundtable at the Canadian Embassy in Paris, highlighting Canada’s clean energy leadership in AI-driven infrastructure. PM Trudeau also participated in the roundtable.
• International AI Safety Report: A landmark AI safety report was released, featuring contributions from the OECD, EU, and UN.

Read the full overview of TECHNATION’s participation here.

4. R&D Funding & Trade Resources

The National Research Council’s IRAP program has launched a new Eureka Network call for Canadian SMEs seeking international R&D partnerships. The registration deadline is April 1.

Additionally, Export Development Canada (EDC) and Business Development Bank of Canada (BDC) have released resources to help businesses navigate trade uncertainties.

• Click here for more information on EDC resources.
• Click here for more information on BDC resources.

As trade and tech policy evolve, TECHNATION will continue to advocate on behalf of its members while providing timely insights to help members navigate these changes effectively. For any clarifications or further questions, please feel free to reach out to grp@technationcanada.ca.