January 24, 2025 • 20 mins
Imagine being penalized for a simple screen touch while trying to make a living. Michael Mulligan of Mulligan Defence Lawyers joins us to unravel the outdated distracted driving laws that put gig economy drivers in a bind. Our conversation sheds light on how these regulations, which only permit screen interactions for phone calls, fail to consider today's work environment for gig workers like Uber Eats drivers. We highlight a noteworthy case where a driver was convicted for accepting a delivery, underscoring the urgent need for legislative reform. You'll also hear about some amusing quirks in the law, like the allowances for CB radio microphones, which highlight the disconnect between current laws and modern work practices.
Switching focus to international trade, we explore the strategic dimensions of Canada's Digital Services Tax Act. This 3% levy on Canadian revenues of major US tech firms, such as Facebook and Amazon, is not just a tax—it's a diplomatic tool. We examine how this legislation fits into the larger geopolitical puzzle, especially in light of past US tariff threats. Conversations veer into the fascinating implications of raising the tax rate, arguing that these companies could still find profitability despite a higher levy. Moreover, we look at how other nations might follow suit, using similar measures to navigate trade tensions with the United States.
Follow this link for a transcript of the show and links to the cases discussed.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Adam Stirling (00:00):
It's Legally Speaking with Michael Mulligan
from Mulligan Defence Lawyers.
Morning Michael, how are wedoing?
Michael Mulligan (00:04):
Hey, good morning.
I'm doing great.
Always good to be here.
Adam Stirling (00:07):
Some really interesting items on the agenda.
I know this is one I've alwaysthought about and I'm glad that
we get to have the conversationtoday.
It's the gig economy and UberEats driver convicted for
touching his screen to accept adelivery.
How did distracted drivingrules work around this practice?
Michael Mulligan (00:26):
Well, the problem is that the legislation
is just out of date.
It doesn't accord with modernreality and what people might be
touching their phone for thebackground of this particular
case and it's a appeal decisionfrom traffic court and the
background is that a policeofficer said that he saw a man
touching his screen and theofficer said twice.
(00:48):
Although the man at trial intraffic court testified that
he'd only touched the screenonce and the judge believed him,
it preferred his evidence tothe evidence of the police
officer and the JP in trafficcourt justice of the peace or
judicial justice acquitted theman on the basis that he'd only
(01:09):
touched the screen once.
Now, after he did that, thepolice officer who was there
there's no Crown counsel intraffic courts they say well,
hold on, hold on, you haven'theard my submissions, you can
only touch the screen to answera phone call and the JP said
well, too bad, he's acquitted.
The Crown appealed that and thejudge the Supreme Court judge,
(01:31):
who hears heard the appeal foundthat the police officer was
right and the police officer isright.
The problem is that thelegislation just doesn't
contemplate things like deliveryapps.
Legislation just doesn'tcontemplate things like delivery
apps and the way thelegislation works is that it
(01:56):
prohibits people from using, orholding, in a position that it
could be used, an electronicdevice.
It does it in very broadlanguage and then provides for
the regulations to be made, theregulations to be made and
regulations are like rules madeby cabinet, basically the
government, that sort of providemore detail for how legislation
is to work and there are someexceptions set out in those
(02:18):
regulations, and the exceptionsinclude what amounts to allowing
you to?
The exceptions include whatamounts to allowing you to, as
long as various otherrequirements are met, like the
phone has to be installed inaccordance with the regulations,
like firmly affixed tosomething, so it's not like
falling on the ground and you'renot, you know, rummaging under
your seat for your phone orwearing securely on somebody's
(02:39):
body.
It then allows people, as longas they have their full license
and it doesn't apply to peoplewith their N or L to touch the
screen once to like answer or toinitiate the call, or to answer
the call by voice.
You could say like answer phoneor something, and it picks up.
The trouble is that's the onlyreason you can touch the screen
(03:01):
once.
The one touch rule only appliesto phone calls, nothing else,
and so that's the reason whythis legislation is just out of
date with modern reality.
What it means is that everysingle Uber driver is committing
(03:23):
an offense when they touch thescreen to accept a delivery.
Yeah, and that's how it works.
And the judge of this case saidthat is how it works.
There was evidence from thisdriver yeah, the thing would pop
up saying, hey, will you acceptthis delivery from McDonald's
or wherever?
Right, yeah, here's where it'scoming from.
And the driver has to tick,touch yes.
If they don't touch yes withinfive seconds, it goes on to the
(03:45):
next possible Uber deliverydriver or Uber driver.
And so, effectively, the way theregulations are currently
written makes it impossible forsomebody who's a Uber driver or
likely, in some cases, taxidrivers to do a job without
constantly committing an offenseunder the Motor Vehicle Act.
And the judge on the appealpointed out that the driver
(04:09):
found it to be very crediblethat he was trying to do his job
as safely as he could, foundthat the legislation simply
doesn't permit one touch for anypurpose other than a phone call
answering, and said, quitecorrectly this is the judge, I
am required to uphold the lawsas written, and so and that's
(04:29):
true, right.
It's not a judge's job to fixlegislation which is out of date
or causes people to be doingyou know, to be convicted of
things, and I should say thisreally matters, because if you
wind up with two of theseconvictions, if you're caught
touching your phone twice, whichmay well happen if you're an
Uber delivery driver drivingaround all the time, your
(04:50):
driving license is prohibitedYou're going to be prohibited
from driving and thereforeunemployed.
And we've seen in BC the NDPgovernment saying, oh yes, we're
very concerned about deliverydrivers and, before the election
, adding effectively a highminimum wage for them.
They're now paid as mandatorysomething in excess of $20 an
(05:10):
hour doing that work, and sothey profess to have concern
about people in that gig economy.
But by leaving this legislationthe way it is, it means that
they simply can't perform theirjob without violating the Motor
Vehicle Act, and hopefullysomebody there is listening to
this.
It wouldn't take much to fix.
It would be an amendment to aregulation.
(05:32):
We don't even need to call thelegislature back into session,
which they seem not to want todo.
This could simply be done by achange to the regulation and the
judge who heard this appeal wasvery clear that this was unfair
.
The judge just can't fix itright.
That's not the judge who heardthis appeal was very clear that
this was unfair.
The judge just can't fix itright.
That's not the judge's job, Ishould say.
There are some other amusingexceptions that are in there.
I'll give you some idea of theage of this thing.
(05:54):
Like there's an exception inhere for using hand microphones,
which is like a CB microphone,because it's got to be a
microphone which can onlytransmit or receive at one time.
So if you want to be holdingyour CD mic talking to your good
buddy in the other truck,there's an exception for that.
Hand microphones Also, they'veworked in exceptions in the
(06:14):
legislation itself.
They exempt things like policeand fire personnel.
Police are constantly typing ontheir computer in their car.
They have a full laptop set up,mounted in their car, which you
know they need Dispatches comeup on that.
They're typing things.
They're typing in license platenumbers, they're searching
people's names.
They're typing, literallytyping as they're driving down
(06:36):
the road and they realize wellthat you know we've exempted
that.
They realize I guess after thelegislation passed other people
should be exempted.
They exempted various other sortof similar people, sheriffs and
so on that might not have beencaptured there.
But this whole thing just criesout for some modernization and
at the very least, if you'reallowing somebody to touch the
(06:59):
screen once which certainlyseems less distracting than
holding a CB microphone ortyping away with one hand as
you're driving your police cardown the road or something it
certainly seems reasonable toexpand the permission to touch
the screen once of a securelymounted phone to accept your
delivery order and we shouldn'tbe putting these people in
jeopardy of delivery drivers, ofbeing convicted and having
(07:22):
their driver's licenseprohibited and becoming
unemployed because legislationis 20 years out of date.
So hopefully that's listened to.
It's a very clear message fromthe judge and this is a quick
fix.
It should be fixed because thecurrent state of affairs is just
completely unfair.
Adam Stirling (07:38):
I'm just thinking it means the entire business
model is probably unviable.
On the text of the law, becauseyou mentioned, if a driver
fails to accept that offer of adelivery within five seconds or
something similar goes toanother driver, I suppose the
legal response would be thatwhen the driver sees that offer
being made that they should pullover and, I guess, stop the car
to accept the order.
(07:59):
But that would probably takemore than five seconds to do
safely so they would lose, sothat would go to the next driver
who would then try to pull overand then lose it while trying
to pull over and it would go tothe next driver who would lose
it while trying to pull over.
So if we had lawful operationof a motor vehicle, this entire
business model ceases tofunction.
Michael Mulligan (08:15):
Yeah, it just.
It just doesn't accord withmodern reality.
The legislation is out of date.
You know the good reason wedon't want people typing away on
their phone, keep their eyes onthe road, and so on, right.
But the idea of a securelymounted phone and that's also a
requirement, by the way If youhave your phone, just like
sitting on the seat next to youor something, you cannot touch
it even once to answer the phone, right, that's important to
(08:36):
know.
So it's got to be securelymounted to your body, like I
guess you could have it strappedonto your wrist or arm or
something, or securely mountedto the car, and the idea there
is you don't want the thingflying around the cabin or
something struggling to find thething.
So that's understandable, right.
But whether you're touching itonce to answer the phone or once
to accept your delivery, wejust shouldn't have a state of
(08:58):
affairs where one of thosepeople is just required to
commit an offense, to do theirjob.
I mean, you may have peoplethat lie about that.
I guess that's going to be aprosecutorial problem.
Why did you touch it once I wasanswering the phone?
Well, good luck proving it.
This fellow the judge said, bythe way was extremely credible.
The reason why there was clearevidence about why he touched it
once was that he testified andexplained that he touched it to
(09:21):
accept the thing and explainedthat he only had five seconds.
I mean, I guess that's going tocreate another danger.
If you want to have Uberdrivers, taxi drivers and so on
slamming on their brakes ExactlyOver to the side of the road,
that's not great.
You know and you've acceptedthat it's safe to touch the
phone once to answer the phonecall.
Then you're talking this,you're just clicking it,
touching it once.
Yeah, so it'd be very easy.
(09:43):
Just delete the requirementthat the single touch before the
purpose of a phone call stillrequire it to be mounted.
It doesn't decrease safety inany way.
Right, we're allowing thatphrase.
You can do that exact sameaction in exactly the same way
for a different purpose lawfully, and so this just needs to be
fixed.
It doesn't take much and that'sgoing to affect thousands of
(10:06):
people every day and it's justreally unfair that it stayed the
way it does.
There's been a clear messagesent from the judiciary and
hopefully the government doesits duty and gets this up to
date so people aren't losingtheir employment for trying to
touch the screen once to accepttheir delivery, which they could
lawfully do if they're making aphone call.
So it seems like an easy fix.
Adam Stirling (10:24):
All right, we'll take our first break here.
Michael Mulligan with MulliganDefense Lawyers.
No-transcript.
All right, we are back on theair here at CFAX 1070 with
Michael Mulligan from MulliganDefense Lawyers as we continue
our agenda for today.
Up next, michael.
It says Digital Services Taxand Trump Canada's Digital
Services Tax Act.
What's the story?
Michael Mulligan (10:45):
So this is an interesting thing, both from the
context of the current threatsby Donald Trump to impose
tariffs on exports to the UnitedStates from Canada, and it
reveals what another potentialresponse by Canada would be to
that which, like what we talkedabout previously the reduction
(11:06):
in US patent and intellectualproperty protection would have
the advantage of raising moneyfor Canada while imposing
disproportionate pain on UScompanies.
I should say, on the issue ofpatent protection, there was a
good editorial in the Globe andMail yesterday by Richard Gold,
who's a professor from McGill,advocating for that as a
(11:29):
response and explaining theprovisions of the Canada Patent
Act that would allow theCanadian government to respond
to US tariffs and that waysaving potentially huge sums of
money for Canada while punishingthe United States to the tune
of billions of dollars.
This is another interestingapproach, and I should say this
(11:49):
Canadian piece of legislationthe Digital Services Tax Act
piece of legislation, theDigital Services Tax Act was one
of the things that wasreferenced in the various
documents.
You might have seen Trumpsigning various executive orders
on his first day.
He's so concerned about it.
He was in that ordering theTreasury and Commerce
(12:10):
Departments to examineextraterritorial taxes imposed
on US companies, which would bethis from his perspective.
I must say that's aninteresting thing, given as well
that Trump is proposing settingup a Department of External
Revenue to try to collect moneyfrom other countries to pay US
bills.
But with that aside, here'swhat that is.
(12:33):
So this was a new piece oflegislation passed by Canada in
June of 2024, and it came intoeffect by order and counsel June
20, 2024.
And what it does is it imposesa 3% tax on digital service
revenue exceeding $20 millionper year earned in Canada.
(12:53):
The idea is this, and I shouldsay it only applies to very
large companies, like companiesthat have a global revenue from
all sources in excess of 750million euro.
Basically, this is a tax on X,facebook, amazon and other large
US companies.
That's really what it amountsto, and the idea there is that
(13:16):
it would be a 3% tax on revenuethey're earning from activity in
Canada.
So, for example, things likemany of those services Facebook
and others they may not evencharge a fee, but they would
have things like onlineadvertising social media
platform out of onlineadvertising, they make money by
selling your personalinformation for advertising,
(13:39):
right?
Really, as they say, you knowyou're not the customer, you are
the product when you're usingsome of those things, right, and
also online marketplaces thatwould be like eBay, amazon, all
of those things, and it requiresthose large companies that are
making money from Canada toregister and then pay this 3%
tax on what they're making fromthose sources of revenue in
(14:01):
Canada, causing the US to have abit of a conniption.
Biden was too, because at themoment, that's not taxed by
Canada.
If you have, you know, facebookor X or any of those things
making money on advertising inCanada, the US gets to collect
all of the tax revenue andCanada gets none, which they
(14:22):
don't like.
And so, first of all, it soundslike this may be one of the
really serious points ofcontention that may be leading
to Trump's you know tyrantsabout how they're subsidizing
Canada.
But the flip side of that isthat if Trump does impose
tariffs, like the removal ofpatent protection and
intellectual property protectionfor US companies, this will be
(14:44):
another opportunity for Canadato extract disproportionate pain
on the United States withoutadding costs to Canadians, which
is what a reciprocal tariffdoes.
The tariff is just taxing yourown people for things they're
buying elsewhere, right, I mean,the sellers don't like that,
but you're just taxing your ownpeople, and we're a small
country in relation to the US,so taxing our own people on US
(15:06):
stuff probably is not going tobe too effective this kind of
thing would be and so this iscurrently at a rate of 3%, and,
bearing in mind that themarginal cost of providing an
online service like Facebook orX or eBay or various things, for
the next marginal customer, thecost of providing that service
(15:26):
is next to zero.
Right, that's one of thereasons why that and software is
such a good business.
Once you make something, youcan just sell as many copies of
it or have as many users as youwant.
Each additional user costs younext to nothing, right?
Yeah, they're profitable.
Yeah, so it's currently 3% isthe rate of this tax.
It seems to me you could raisethis to, let's say, 75% of the
(15:48):
profit made by any of thosecompanies in Canada, and they'll
still leave them 25%.
And when your cost of producingthe service is zero effectively
, right, the marginal cost ofanother Facebook user is almost
zero.
A rational company wouldcontinue to offer the services.
25% is better than 0%, whichwould be their alternative, and
(16:09):
so this is another opportunityfor Canada to respond if there
isn't some agreement reached.
In addition to no patentprotection and generic drugs
cheaply and all of that, thispiece of legislation the rate of
tax on what amounts to theselarge US companies could go from
3%, to pick your number,whatever the highest number is.
(16:31):
It wouldn't cause the companyto think rationally.
I'm going to stop providingservices in Canada, to the
extent you care about that,right.
If you think it's importantthat we have Facebook access
here, you probably wouldn't wantto put it at 100% because the
company would rationally stopproviding service.
Why would they bother?
Right, but you could raise thisto extract virtually all of the
(16:52):
profits from US companies andyou can just imagine what the
response would be amongst thecadre of people.
If you watch the USinauguration these sort of tech
billionaires lined up at theinauguration you can just
imagine the response from youknow, mark Zuckerberg or
somebody right.
If the effective rate of taxfor all money earned in Canada
(17:15):
is going to be 75% and maybeother companies would like it or
other countries would like ittoo, maybe if you're the UK or
you're the EU and you want torespond to US tariff threats
without costing your people more, maybe you just extract
virtually all of the profit madeby those large US companies,
(17:35):
and it's just a great example ofhow a smaller country can use
this sort of smart leveragedapproach and, rather than
punishing yourself to get atyour opponent, you can do things
which are very advantageous toyou lots of extra tax revenue in
Canada, devastating to theother country and companies
(17:56):
there, and something which youcan just do entirely
domestically, and there it isright.
You just imagine what theresponse would be.
Much like the immediate andswift response of every company
in the United States that hasany intellectual property, which
is, frankly, much of what theUS exports.
You know, one of the USconcerns is that their
(18:18):
manufacturing is modest.
Many things which are USproducts or US companies are not
in fact manufactured in the USat all, and what the US is
selling amounts to intellectualproperty, copyrights and
permission to do something,copies of software and so on,
and so the US is very vulnerableto this and the value of US
(18:44):
companies.
Much of their exports Applecomputers is not making anything
in the United States.
All of the physical stuff iscoming from elsewhere.
Really, what they're selling istheir copyright Nike shoes Nike
doesn't have a single factory.
All they have is a design andthe ability to extract money
(19:05):
from that sort of intellectualproperty or brand and if you
just take that away, they're notworth anything.
I mean, they're worth somethingin terms of what they can sell
in the United States, but ifanyone can just put a swoosh on
their shoes and anyone can, youknow, brand their product
wherever you want.
Many US companies have reallyvery little value, and so it
(19:27):
just is a really greatopportunity you want.
Many US companies have reallyvery little value, and so it
just is a really greatopportunity.
This as well to keep in mindand hopefully our response, if
it comes to that, isn't just aknee-jerk.
Well, I'm going to dollar fordollar, tax our people to just
show those Americans right, howexpensive we can make orange
juice or breakfast cereal, right?
No doubt the orange juice orbreakfast cereal people don't
like it, but hardly bring themto their knees.
(19:48):
This sort of thing could bringthem to their knees.
So that's the digital servicestax.
It's front and center and ifnothing can be negotiated,
hopefully we consider this aswell as one of the responses to
punish Trump and the US for whatthey have proposed.
Adam Stirling (20:04):
Michael Balligan, with Balligan Defense Lawyers,
legally speaking during thesecond half of our second hour
every Thursday.
Michael out of time?
A pleasure as always.
Thank you so much.
Have a great day.
All right, you too.
It's Legally Speaking with Michael Mulligan
from Mulligan Defence Lawyers.
Morning Michael, how are wedoing?
Michael Mulligan (00:04):
Hey, good morning.
I'm doing great.
Always good to be here.
Adam Stirling (00:07):
Some really interesting items on the agenda.
I know this is one I've alwaysthought about and I'm glad that
we get to have the conversationtoday.
It's the gig economy and UberEats driver convicted for
touching his screen to accept adelivery.
How did distracted drivingrules work around this practice?
Michael Mulligan (00:26):
Well, the problem is that the legislation
is just out of date.
It doesn't accord with modernreality and what people might be
touching their phone for thebackground of this particular
case and it's a appeal decisionfrom traffic court and the
background is that a policeofficer said that he saw a man
touching his screen and theofficer said twice.
(00:48):
Although the man at trial intraffic court testified that
he'd only touched the screenonce and the judge believed him,
it preferred his evidence tothe evidence of the police
officer and the JP in trafficcourt justice of the peace or
judicial justice acquitted theman on the basis that he'd only
(01:09):
touched the screen once.
Now, after he did that, thepolice officer who was there
there's no Crown counsel intraffic courts they say well,
hold on, hold on, you haven'theard my submissions, you can
only touch the screen to answera phone call and the JP said
well, too bad, he's acquitted.
The Crown appealed that and thejudge the Supreme Court judge,
(01:31):
who hears heard the appeal foundthat the police officer was
right and the police officer isright.
The problem is that thelegislation just doesn't
contemplate things like deliveryapps.
Legislation just doesn'tcontemplate things like delivery
apps and the way thelegislation works is that it
(01:56):
prohibits people from using, orholding, in a position that it
could be used, an electronicdevice.
It does it in very broadlanguage and then provides for
the regulations to be made, theregulations to be made and
regulations are like rules madeby cabinet, basically the
government, that sort of providemore detail for how legislation
is to work and there are someexceptions set out in those
(02:18):
regulations, and the exceptionsinclude what amounts to allowing
you to?
The exceptions include whatamounts to allowing you to, as
long as various otherrequirements are met, like the
phone has to be installed inaccordance with the regulations,
like firmly affixed tosomething, so it's not like
falling on the ground and you'renot, you know, rummaging under
your seat for your phone orwearing securely on somebody's
(02:39):
body.
It then allows people, as longas they have their full license
and it doesn't apply to peoplewith their N or L to touch the
screen once to like answer or toinitiate the call, or to answer
the call by voice.
You could say like answer phoneor something, and it picks up.
The trouble is that's the onlyreason you can touch the screen
(03:01):
once.
The one touch rule only appliesto phone calls, nothing else,
and so that's the reason whythis legislation is just out of
date with modern reality.
What it means is that everysingle Uber driver is committing
(03:23):
an offense when they touch thescreen to accept a delivery.
Yeah, and that's how it works.
And the judge of this case saidthat is how it works.
There was evidence from thisdriver yeah, the thing would pop
up saying, hey, will you acceptthis delivery from McDonald's
or wherever?
Right, yeah, here's where it'scoming from.
And the driver has to tick,touch yes.
If they don't touch yes withinfive seconds, it goes on to the
(03:45):
next possible Uber deliverydriver or Uber driver.
And so, effectively, the way theregulations are currently
written makes it impossible forsomebody who's a Uber driver or
likely, in some cases, taxidrivers to do a job without
constantly committing an offenseunder the Motor Vehicle Act.
And the judge on the appealpointed out that the driver
(04:09):
found it to be very crediblethat he was trying to do his job
as safely as he could, foundthat the legislation simply
doesn't permit one touch for anypurpose other than a phone call
answering, and said, quitecorrectly this is the judge, I
am required to uphold the lawsas written, and so and that's
(04:29):
true, right.
It's not a judge's job to fixlegislation which is out of date
or causes people to be doingyou know, to be convicted of
things, and I should say thisreally matters, because if you
wind up with two of theseconvictions, if you're caught
touching your phone twice, whichmay well happen if you're an
Uber delivery driver drivingaround all the time, your
(04:50):
driving license is prohibitedYou're going to be prohibited
from driving and thereforeunemployed.
And we've seen in BC the NDPgovernment saying, oh yes, we're
very concerned about deliverydrivers and, before the election
, adding effectively a highminimum wage for them.
They're now paid as mandatorysomething in excess of $20 an
(05:10):
hour doing that work, and sothey profess to have concern
about people in that gig economy.
But by leaving this legislationthe way it is, it means that
they simply can't perform theirjob without violating the Motor
Vehicle Act, and hopefullysomebody there is listening to
this.
It wouldn't take much to fix.
It would be an amendment to aregulation.
(05:32):
We don't even need to call thelegislature back into session,
which they seem not to want todo.
This could simply be done by achange to the regulation and the
judge who heard this appeal wasvery clear that this was unfair
.
The judge just can't fix itright.
That's not the judge who heardthis appeal was very clear that
this was unfair.
The judge just can't fix itright.
That's not the judge's job, Ishould say.
There are some other amusingexceptions that are in there.
I'll give you some idea of theage of this thing.
(05:54):
Like there's an exception inhere for using hand microphones,
which is like a CB microphone,because it's got to be a
microphone which can onlytransmit or receive at one time.
So if you want to be holdingyour CD mic talking to your good
buddy in the other truck,there's an exception for that.
Hand microphones Also, they'veworked in exceptions in the
(06:14):
legislation itself.
They exempt things like policeand fire personnel.
Police are constantly typing ontheir computer in their car.
They have a full laptop set up,mounted in their car, which you
know they need Dispatches comeup on that.
They're typing things.
They're typing in license platenumbers, they're searching
people's names.
They're typing, literallytyping as they're driving down
(06:36):
the road and they realize wellthat you know we've exempted
that.
They realize I guess after thelegislation passed other people
should be exempted.
They exempted various other sortof similar people, sheriffs and
so on that might not have beencaptured there.
But this whole thing just criesout for some modernization and
at the very least, if you'reallowing somebody to touch the
(06:59):
screen once which certainlyseems less distracting than
holding a CB microphone ortyping away with one hand as
you're driving your police cardown the road or something it
certainly seems reasonable toexpand the permission to touch
the screen once of a securelymounted phone to accept your
delivery order and we shouldn'tbe putting these people in
jeopardy of delivery drivers, ofbeing convicted and having
(07:22):
their driver's licenseprohibited and becoming
unemployed because legislationis 20 years out of date.
So hopefully that's listened to.
It's a very clear message fromthe judge and this is a quick
fix.
It should be fixed because thecurrent state of affairs is just
completely unfair.
Adam Stirling (07:38):
I'm just thinking it means the entire business
model is probably unviable.
On the text of the law, becauseyou mentioned, if a driver
fails to accept that offer of adelivery within five seconds or
something similar goes toanother driver, I suppose the
legal response would be thatwhen the driver sees that offer
being made that they should pullover and, I guess, stop the car
to accept the order.
(07:59):
But that would probably takemore than five seconds to do
safely so they would lose, sothat would go to the next driver
who would then try to pull overand then lose it while trying
to pull over and it would go tothe next driver who would lose
it while trying to pull over.
So if we had lawful operationof a motor vehicle, this entire
business model ceases tofunction.
Michael Mulligan (08:15):
Yeah, it just.
It just doesn't accord withmodern reality.
The legislation is out of date.
You know the good reason wedon't want people typing away on
their phone, keep their eyes onthe road, and so on, right.
But the idea of a securelymounted phone and that's also a
requirement, by the way If youhave your phone, just like
sitting on the seat next to youor something, you cannot touch
it even once to answer the phone, right, that's important to
(08:36):
know.
So it's got to be securelymounted to your body, like I
guess you could have it strappedonto your wrist or arm or
something, or securely mountedto the car, and the idea there
is you don't want the thingflying around the cabin or
something struggling to find thething.
So that's understandable, right.
But whether you're touching itonce to answer the phone or once
to accept your delivery, wejust shouldn't have a state of
(08:58):
affairs where one of thosepeople is just required to
commit an offense, to do theirjob.
I mean, you may have peoplethat lie about that.
I guess that's going to be aprosecutorial problem.
Why did you touch it once I wasanswering the phone?
Well, good luck proving it.
This fellow the judge said, bythe way was extremely credible.
The reason why there was clearevidence about why he touched it
once was that he testified andexplained that he touched it to
(09:21):
accept the thing and explainedthat he only had five seconds.
I mean, I guess that's going tocreate another danger.
If you want to have Uberdrivers, taxi drivers and so on
slamming on their brakes ExactlyOver to the side of the road,
that's not great.
You know and you've acceptedthat it's safe to touch the
phone once to answer the phonecall.
Then you're talking this,you're just clicking it,
touching it once.
Yeah, so it'd be very easy.
(09:43):
Just delete the requirementthat the single touch before the
purpose of a phone call stillrequire it to be mounted.
It doesn't decrease safety inany way.
Right, we're allowing thatphrase.
You can do that exact sameaction in exactly the same way
for a different purpose lawfully, and so this just needs to be
fixed.
It doesn't take much and that'sgoing to affect thousands of
(10:06):
people every day and it's justreally unfair that it stayed the
way it does.
There's been a clear messagesent from the judiciary and
hopefully the government doesits duty and gets this up to
date so people aren't losingtheir employment for trying to
touch the screen once to accepttheir delivery, which they could
lawfully do if they're making aphone call.
So it seems like an easy fix.
Adam Stirling (10:24):
All right, we'll take our first break here.
Michael Mulligan with MulliganDefense Lawyers.
No-transcript.
All right, we are back on theair here at CFAX 1070 with
Michael Mulligan from MulliganDefense Lawyers as we continue
our agenda for today.
Up next, michael.
It says Digital Services Taxand Trump Canada's Digital
Services Tax Act.
What's the story?
Michael Mulligan (10:45):
So this is an interesting thing, both from the
context of the current threatsby Donald Trump to impose
tariffs on exports to the UnitedStates from Canada, and it
reveals what another potentialresponse by Canada would be to
that which, like what we talkedabout previously the reduction
(11:06):
in US patent and intellectualproperty protection would have
the advantage of raising moneyfor Canada while imposing
disproportionate pain on UScompanies.
I should say, on the issue ofpatent protection, there was a
good editorial in the Globe andMail yesterday by Richard Gold,
who's a professor from McGill,advocating for that as a
(11:29):
response and explaining theprovisions of the Canada Patent
Act that would allow theCanadian government to respond
to US tariffs and that waysaving potentially huge sums of
money for Canada while punishingthe United States to the tune
of billions of dollars.
This is another interestingapproach, and I should say this
(11:49):
Canadian piece of legislationthe Digital Services Tax Act
piece of legislation, theDigital Services Tax Act was one
of the things that wasreferenced in the various
documents.
You might have seen Trumpsigning various executive orders
on his first day.
He's so concerned about it.
He was in that ordering theTreasury and Commerce
(12:10):
Departments to examineextraterritorial taxes imposed
on US companies, which would bethis from his perspective.
I must say that's aninteresting thing, given as well
that Trump is proposing settingup a Department of External
Revenue to try to collect moneyfrom other countries to pay US
bills.
But with that aside, here'swhat that is.
(12:33):
So this was a new piece oflegislation passed by Canada in
June of 2024, and it came intoeffect by order and counsel June
20, 2024.
And what it does is it imposesa 3% tax on digital service
revenue exceeding $20 millionper year earned in Canada.
(12:53):
The idea is this, and I shouldsay it only applies to very
large companies, like companiesthat have a global revenue from
all sources in excess of 750million euro.
Basically, this is a tax on X,facebook, amazon and other large
US companies.
That's really what it amountsto, and the idea there is that
(13:16):
it would be a 3% tax on revenuethey're earning from activity in
Canada.
So, for example, things likemany of those services Facebook
and others they may not evencharge a fee, but they would
have things like onlineadvertising social media
platform out of onlineadvertising, they make money by
selling your personalinformation for advertising,
(13:39):
right?
Really, as they say, you knowyou're not the customer, you are
the product when you're usingsome of those things, right, and
also online marketplaces thatwould be like eBay, amazon, all
of those things, and it requiresthose large companies that are
making money from Canada toregister and then pay this 3%
tax on what they're making fromthose sources of revenue in
(14:01):
Canada, causing the US to have abit of a conniption.
Biden was too, because at themoment, that's not taxed by
Canada.
If you have, you know, facebookor X or any of those things
making money on advertising inCanada, the US gets to collect
all of the tax revenue andCanada gets none, which they
(14:22):
don't like.
And so, first of all, it soundslike this may be one of the
really serious points ofcontention that may be leading
to Trump's you know tyrantsabout how they're subsidizing
Canada.
But the flip side of that isthat if Trump does impose
tariffs, like the removal ofpatent protection and
intellectual property protectionfor US companies, this will be
(14:44):
another opportunity for Canadato extract disproportionate pain
on the United States withoutadding costs to Canadians, which
is what a reciprocal tariffdoes.
The tariff is just taxing yourown people for things they're
buying elsewhere, right, I mean,the sellers don't like that,
but you're just taxing your ownpeople, and we're a small
country in relation to the US,so taxing our own people on US
(15:06):
stuff probably is not going tobe too effective this kind of
thing would be and so this iscurrently at a rate of 3%, and,
bearing in mind that themarginal cost of providing an
online service like Facebook orX or eBay or various things, for
the next marginal customer, thecost of providing that service
(15:26):
is next to zero.
Right, that's one of thereasons why that and software is
such a good business.
Once you make something, youcan just sell as many copies of
it or have as many users as youwant.
Each additional user costs younext to nothing, right?
Yeah, they're profitable.
Yeah, so it's currently 3% isthe rate of this tax.
It seems to me you could raisethis to, let's say, 75% of the
(15:48):
profit made by any of thosecompanies in Canada, and they'll
still leave them 25%.
And when your cost of producingthe service is zero effectively
, right, the marginal cost ofanother Facebook user is almost
zero.
A rational company wouldcontinue to offer the services.
25% is better than 0%, whichwould be their alternative, and
(16:09):
so this is another opportunityfor Canada to respond if there
isn't some agreement reached.
In addition to no patentprotection and generic drugs
cheaply and all of that, thispiece of legislation the rate of
tax on what amounts to theselarge US companies could go from
3%, to pick your number,whatever the highest number is.
(16:31):
It wouldn't cause the companyto think rationally.
I'm going to stop providingservices in Canada, to the
extent you care about that,right.
If you think it's importantthat we have Facebook access
here, you probably wouldn't wantto put it at 100% because the
company would rationally stopproviding service.
Why would they bother?
Right, but you could raise thisto extract virtually all of the
(16:52):
profits from US companies andyou can just imagine what the
response would be amongst thecadre of people.
If you watch the USinauguration these sort of tech
billionaires lined up at theinauguration you can just
imagine the response from youknow, mark Zuckerberg or
somebody right.
If the effective rate of taxfor all money earned in Canada
(17:15):
is going to be 75% and maybeother companies would like it or
other countries would like ittoo, maybe if you're the UK or
you're the EU and you want torespond to US tariff threats
without costing your people more, maybe you just extract
virtually all of the profit madeby those large US companies,
(17:35):
and it's just a great example ofhow a smaller country can use
this sort of smart leveragedapproach and, rather than
punishing yourself to get atyour opponent, you can do things
which are very advantageous toyou lots of extra tax revenue in
Canada, devastating to theother country and companies
(17:56):
there, and something which youcan just do entirely
domestically, and there it isright.
You just imagine what theresponse would be.
Much like the immediate andswift response of every company
in the United States that hasany intellectual property, which
is, frankly, much of what theUS exports.
You know, one of the USconcerns is that their
(18:18):
manufacturing is modest.
Many things which are USproducts or US companies are not
in fact manufactured in the USat all, and what the US is
selling amounts to intellectualproperty, copyrights and
permission to do something,copies of software and so on,
and so the US is very vulnerableto this and the value of US
(18:44):
companies.
Much of their exports Applecomputers is not making anything
in the United States.
All of the physical stuff iscoming from elsewhere.
Really, what they're selling istheir copyright Nike shoes Nike
doesn't have a single factory.
All they have is a design andthe ability to extract money
(19:05):
from that sort of intellectualproperty or brand and if you
just take that away, they're notworth anything.
I mean, they're worth somethingin terms of what they can sell
in the United States, but ifanyone can just put a swoosh on
their shoes and anyone can, youknow, brand their product
wherever you want.
Many US companies have reallyvery little value, and so it
(19:27):
just is a really greatopportunity you want.
Many US companies have reallyvery little value, and so it
just is a really greatopportunity.
This as well to keep in mindand hopefully our response, if
it comes to that, isn't just aknee-jerk.
Well, I'm going to dollar fordollar, tax our people to just
show those Americans right, howexpensive we can make orange
juice or breakfast cereal, right?
No doubt the orange juice orbreakfast cereal people don't
like it, but hardly bring themto their knees.
(19:48):
This sort of thing could bringthem to their knees.
So that's the digital servicestax.
It's front and center and ifnothing can be negotiated,
hopefully we consider this aswell as one of the responses to
punish Trump and the US for whatthey have proposed.
Adam Stirling (20:04):
Michael Balligan, with Balligan Defense Lawyers,
legally speaking during thesecond half of our second hour
every Thursday.
Michael out of time?
A pleasure as always.
Thank you so much.
Have a great day.
All right, you too.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!