Video Transcript:

first off nobody I know there’s many people who claim to be surprised thus far some pundits and analysts nobody should be surprised at this they’re 30 trillion we are 2.2 trillion we need them way way more than they need us i know Canadians will be upset at that who think we’re the same size or equal with America we’re not so Donald Trump laid down the hammer yesterday and uh that’s kind of what we’re going to be talking about for today’s video so without further ado let’s get into it so yesterday the media cycle was inundated with Donald Trump’s social media posts talking about terminating all further negotiations with Canada due to uh the dairy tariffs that are still implemented on them as well as the digital service tax which is supposed to be coming into play on June 30th this coming Monday and with that they have a retroactive 3% pay on the revenue that these companies make not on the profit that these companies have made but the revenue and this has ticked off obviously Donald Trump and as of recording this this is the only kind of interaction that I’ve seen in terms of Mark Carney and the media addressing this whole situation take a look
hi Prime Minister
have you spoken to the president today yet sir um no I didn’t speak to the president today
what do you any reaction to the uh to the new
uh no look we’ll uh we’ll continue to conduct uh these complex negotiations in the best interest of Canadians it’s a negotiation will you back down from the DST
now I find it very strange that he decided to laugh and chuckle at the question about if he’s talked to Donald Trump uh this is the guy who’s been going on about he’s the crisis manager he’s the one who’s the negotiator he’s been in many talks and businesses and all that kind of stuff and I understand you shouldn’t be answering every beck and call that Donald Trump puts out but Donald Trump saying there’s no negotiations happening and then Carney is saying it that there are negotiations and Trump does say a lot of wild stuff but Carney is known for lying so they’re essentially two P’s of the same pod but when we take a look at the mainstream media and their uh coverage of this a lot of them were saying that this was kind of coming out of nowhere that uh Donald Trump’s response was so so unpredictable yet as you heard from the opener this is something that we should have seen and I I’ll get into more coverage of that but take a look at the CBC
what did the president say well right before Canada Day long weekend he poured a lot of uh cold water on the idea that this country and the US are on their way to some kind of agreement on a trade deal
so there Rafi is essentially saying uh Donald Trump kind of pulled the rug from under us nobody really saw this coming yet literally 10 days prior to this airing they had Goldie Haidider on who’s one of the top CEOs I believe in Canada is a very wealthy businessman on their own program talking about the DST that’s coming in on June 30th and saying how much of an irritant it is to not just Democrats but also Republicans on the other hand we know that there’s this thing that really irritates the Americans both Democrats and Republicans have been focused on this thing called the DST the digital services tax it’s a tax that American companies primarily are expected to pay and that amount kicks in on June the 30th and when that kicks in there’s a retroactive payment that’s due and so there’s this time pressure I think being put on from the American side saying “You bring that around.” And Democrats and Republicans I repeat are not pleased by this it may put us in a position where we have to do a deal sooner rather than later but I don’t expect our government to blink on the question of how do we make a deal that is good for Canada and for Canadian economy and I know they’re consulting widely with the business community not just those that are affected but others uh who are more broadly looking at how do we come out of this
now that little snippet interview with Goldie there like I said was 10 days ago so that was June 17th and the Trump administration had already asked Carney if he could put a pause on this DST being implemented at the G7 according to their administration uh this was them talking about it on Fox Business yesterday uh when all this uh news broke out
kevin thank you so the president was tough on Canada at his uh press conference today the battle is over digital services tax on our great technology companies i don’t know why Canada is being so stubborn uh we’ve stopped negotiating with them according to the president what can you tell us well you know we spoke uh with the prime minister about this at the G7 meeting last week we urged them to delay you know they were setting a multi-billion dollar tax bill uh to our big uh high-tech companies uh on the 30th of of June and we said delay it for 30 days while we’re negotiating and they refuse to uh and the digital service tax is an extra territorial really uh almost criminal act right they’re they’re taxing American companies who don’t necessarily even have a presence in Canada
now this is where it gets interesting because as I mentioned that Goldie interview was on June 17th the Trump administration there just said that they talked to Carney about putting a pause on the DST uh during the G7 which was actually June 16th to the 17th trump was only there on the first day so June 16th they had already asked Carney prior to all of this happening to put a pause on it carney decided ah what the hell let’s keep going and 2 days after the G7 we get this article from the Toronto Stars talking about Francois Philipe Champagne saying Canada won’t pause the digital service tax uh if we read a bit of the article it says Canada won’t put a hold on the DST on big tech companies set to take effect on June 30th the finance minister said on Thursday pressure has mounted on Ottawa to pause the tax ahead of the trade discussions with the US finance Minister Franis Philippe Champagne said Thursday the legislation has passed by Parliament and Canada is going ahead with the tax the DST is in force and it’s going to be applied he told reporters before a cabinet meeting on Parliament Hill it will apply retroactively leaving US companies with a 2 billion US bill due at the end of the month canadian and US business groups organizations representing the US tech giants and American members of Congress have all signed letters in recent weeks calling for the tax to be eliminated or paused the Liberals first promised the tax in the 2019 election it was delayed for years due to global efforts to establish a broader multinational digital taxation plan following significant delays in that process at the OECD Canada went ahead with its own tax and there’s been other articles that were written on this under the policy Canadian politics um we can read here Canada’s DST was introduced even as the OECD members had agreed to a standstill on new digital taxes while negotiations continued on the global approach instead of waiting for the common solution or at least for the US to signal it could live with one Canada pressed ahead despite repeated and bipartisan warnings from American lawmakers business groups and administration that this would provoke counter measures so it’s not like the writing wasn’t on the wall and even when we take a look at how this was going to affect us people said “Oh no we need to stand up to the US we need to fight back.” Even Ian Lee the professor that you saw at the beginning he’s telling Canadians to wake up we are going to be crushed
and again for those Canadians who say “We’re going to stand up to them and we’re going to take them on.” This is nonsense on stilts to use Jeremy Bentham’s famous phrase we are a 2.2 trillion economy and they are a 30 trillion they are the largest economy on planet Earth bar none much bigger than China most dynamic country in the world so we don’t and Turvver has done excellent research showing in an asymmetric relationship big country little country the little country gets squashed
now some would say that we are already getting squashed because if you look at our auto industry the steel the aluminum everyone’s getting hit very hard jobs are being lost left right and center and nothing is actually being negotiated and this is something that Ian Lee brings up he says “Well what we need to do is put everything on the table whether it’s supply management whether it’s DST anything that is hindering complete free trade or close to complete free trade between us and the US should be on the table for negotiation we are too uh focused on protecting this uh dairy cartel of 8,000 or so people that we’re screwing over the 40 million other Canadians.” I’m saying we go to them and say look we’ll put everything on the table if you put everything on the table i thought that’s what you do in negotiations when you negotiate something and and so I think that this can be recovered ash we need them far more than they need us and we are now on the precipice and we are facing a choice do we want to defend 8,500 multi-millionaire dairy farmers at the risk and and continue to exploit 40 million Canadians with much higher dairy prices and milk and egg prices or do we want a trade agreement that will benefit 40 million Canadians with the largest economy in the entire world now I will say that Professor Ian Lee does make a solid argument as to why we have the dairy tariffs already because the state of Wisconsin produces more milk than all of Canada as a whole and so we don’t want our Canadian markets just being flooded with American products however I do think allowing more of them would potentially give us competitive pricing because as Ian Lee said Canadians are already getting priced out of dairy here in Ontario we have bagged milk you know that’s the joke around here but if you buy three lers of milk which is the three bags um sometimes it’s like 10 bucks and when you have two young kids you drink coffee whatever you make a smoothie you go through milk pretty quickly and at 10 bucks a pop that’s going to be adding up now if you had more of the American products coming in like from Wisconsin it could be competitive pricing where it could be maybe three bucks or four bucks for the 3 L bag and that would benefit Canadians a lot more people could spend more or feel like they’re actually not getting ripped off especially by our Canadian producers because even though they’re all about uh you know buying Canadian products you go to the store a lot of the Canadian products are still more expensive than the other other brands and it’s not to say that you don’t want to support them but when you are on a limited budget or income’s not that great sometimes going for the cheaper option is all you can do with all that being said I think the real crux of the situation is the DST and if we go back to the American administration talking about it on air um he was giving an example but then he he brought up the OECD and and this is what he had to say but here’s the thing that if you have a business you set up a cuddlo hamburger store in Canada and you’ve got chains across the US that when you make money in Canada of course Canada can tax it the idea is that what happens if there’s somebody just has a website in the US and somebody buys a service in the US and all the income is in the US Canada saying that they get to tax that uh and other you know France is saying that too there’s something else called pillar 2 which is a global minimum tax that foolishly Janet Yellen agreed to that basically said if uh other countries think that our corporate taxes are too low then they’re allowed to fill the gap and and charge tax because our our taxes are too low and so imagine if you’re a company that has a lot of expensing uh and so on so you don’t you might not pay a lot of tax because you’re making so much investment well then they’re saying that they need to have the right to to you know level the playing field by taxing us more imposing a tax again extr territorial tax on us and so the G7 has agreed to language that they’re not going to do this pillar two thing but some of the countries are still keeping their digital services taxes and we’re going to work really really hard to take those away too because again it they’re very unlawful they’re it you know of course if American companies earn money in another country then that country can tax it but when they’re reaching into the US and taxing our companies here in the US you know that’s something that we’re not going to stand for
now some might say that that was a poor example from him saying that a website is not a business but in my opinion it is i mean if you look at Etsy Pinterest uh any of those online digital websites um they don’t have brickandmortar stores those are their businesses those are their storefrs that’s how they advertise their stuff and and what he was saying there a lot of the times the Trump administration likes to embellish and and what the real truth is but if you go to Bloomberg’s uh website um the OECD and digital tax service when we scroll down to pillar 2 it talks about the global minimum corporate tax pillar 2 establishes two mechanisms to ensure that large multinational companies pay a 15% minimum tax regardless of where they’re headquartered or the jurisdiction in which they operate and that is pretty wild because uh I believe in the states they were saying that um this doesn’t affect their tax law because it’s not filed under an income tax it’s filed under a revenue tax and so and and it’s a 3% of revenue tax not profits revenue uh and so it just doesn’t make sense that they could do that the only reason it doesn’t violate our tax treaty with Canada is they’re claiming it’s not an income tax it’s a revenue tax
and that’s absolutely wild the things that the governments or whoever can get away with but in reality who really knows how long this is going to last donald Trump throughout a time frame of 7 days but with him 7 days could be maybe 1 day 7 hours 7 weeks who really knows at this point maybe even by the time this video comes out they’ll be talking in negotiations yet again uh but with that being said I’d love to hear from you guys let me know what you think about all this in the comment section below don’t forget to hit the subscribe button uh I hope you all enjoy the long weekend next week we’re going to have Canada Day followed by uh you know July 4th Independence Day i’m not sure how many videos I’m going to be having because I might be out on a family vacation uh but if anything I will keep you guys posted and as always I will catch you guys on the next one so thanks so much