Canada's Finance Minister, François-Philippe Champagne, has publicly defended a pivotal G7 tax agreement that provides special treatment for large American companies. The deal, negotiated during Canada's presidency of the G7 forum, is facing significant criticism from China and several European Union nations.
Navigating a Diplomatic Compromise
In an exclusive interview with the Financial Times, Minister Champagne argued that the arrangement, which carves out an exemption for the United States from the full scope of the global minimum tax, was essential to maintain American participation. "Having the United States on board in addressing that global issue is something that I would say colleagues around the table wanted to achieve — and we found a way to achieve it," Champagne stated.
He emphasized that the compromise, reached in the summer of 2025, accommodated specific U.S. requirements while staying "true to the intent" of the landmark framework developed by the Organisation for Economic Co-operation and Development (OECD). The OECD's regime, agreed upon by 135 countries in 2021, aims to ensure multinational corporations pay a minimum level of tax worldwide.
Mounting International Objections
The defence from Ottawa comes as negotiators at the OECD are in a race against time to finalize a formal package by the end of December 2025. The process hit a snag recently when China, the Czech Republic, Estonia, and Poland voiced objections to the proposed package that includes the U.S. carve-out.
According to reports, China sought access to a similar exemption, while Poland and the Czech Republic expressed concerns about certain tax incentives being deemed compliant with the global minimum tax rules. While Polish officials have since dropped their objections, talks continue this week to persuade the remaining dissenting countries.
U.S. Treasury Secretary Scott Bessent took to social media platform X to urge consensus, stating dissenting nations should "join the consensus on the path forward for this critical issue."
Broader Implications and Political Pressure
The global minimum tax has faced considerable implementation hurdles since its inception. The compromise with the U.S. was partly driven by political pressure from Washington. Earlier in 2025, Republican lawmakers had drafted plans for a "revenge tax" targeting companies and investors from countries implementing the original OECD plan without a U.S. exemption.
Although that threat was withdrawn following the G7 summer agreement, Republican senators have signalled they would resurrect the punitive measure if a final international agreement on the U.S. exemption is not reached by the year's end.
Minister Champagne, who addressed the Calgary Chamber of Commerce in November 2025, clarified that he has not been involved in discussions about extending similar alternative models to other countries beyond the United States. His comments come as Canada prepares to hand the G7 presidency over to France.
