Bill C-22 is proposed Canadian legislation that would grant law enforcement and national security agencies enhanced tools to obtain digital information, including mandatory metadata retention for up to one year. This creates a comprehensive surveillance map of Canadians' online activities, raising significant privacy concerns. Major technology companies including Apple, Meta, and Google have warned that the bill could pressure them to weaken encryption and create backdoors for government access. The legislation applies broadly to electronic service providers, potentially including podcasters and anyone offering electronic services. Critics argue the bill disproportionately infringes on constitutional privacy rights established by the Supreme Court of Canada, while proponents claim it addresses resource constraints in law enforcement. The debate centers on whether the surveillance capabilities are necessary and proportionate to stated objectives, with concerns about potential abuse and the precedent it sets for future legislation.
Privacy Law Expert Explains Bill C-22 - Security, or Surveillance? | The Loonie Hour Episode 243追加:
the mandate. They're actually extending this beyond just streamers. They're including devices like smart TVs and set top boxes, all of which will have to promote Canadian content. They want metrics on how much Canadian content is being watched. It basically creates a surveillance map of just about everybody for an entire year.
>> Mainstream media has lost control of dominating whatever message that's want to been communicated. This then comes down to the economic, financial, and and debt story. I believe the western world is terrified. There are citizens becoming acutely aware of how ineffective our economies are now actually running.
>> The other element that's got a lot of people concerned has to do with the assistance or support that these companies would have to provide to law enforcement.
>> The backlash is probably similar to some of the other bills, but I think there's been a whole bunch of companies now saying that they would potentially just leave Canada. the Apples and Metas and Googles saying we don't do this anywhere and we sure don't want to do it here either.
>> Why is this government so insistent on destroying like our basic constitutional rights? The insistence on being sort of a police state online and then being, you know, Teletubbies in the courtrooms.
I mean, if you're going to be a police state, just go full hog. You know, >> the dirty secret is that no one's ever going to get paid. People have the shortest memories when it comes to investment. We just got to get keyed into Bitcoin.
>> Hey, there's a bubble.
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>> Take two.
>> I haven't I haven't moved.
>> Welcome back, L.
>> All right, take three. Take three. We keep recording, Jeff. Keep the whole thing. People like this stuff.
>> Welcome back.
>> All right. Come on. You can do it. Take four. Try it again.
>> Go back to Looney Hour episode 243. As always, join the three amigos. We got the Boomer over in Halifax. Rich Diaz in Montreal. Welcome back to the show, Richard.
>> Gentlemen, hello. Hello.
>> Go Habs.
>> I went to another game. So now I'm officially broke, but it was it was it was terrible game. We lost. I'm very sad. I did meet one of our clients, Keith, which was really fun.
>> She was there with her daughter who has a Yoopi.
>> What's her name and SIN number and address, everything?
>> Great. She knows who she is. I'm not sure if we should say her name, but she was lovely. She was there for her daughter. She flew in from Nova Scotia.
There's a clue for you. And uh and it was really cool to see her, but and yeah, so it was it was really fun. And uh I'm very sad I yelled. That's probably my why my voice is very but we didn't play well. So there you go. But it's still two-1. Plenty to play for.
How rich.
>> So Rich Rich shared a picture of me of the game and he's the only guy in the whole stadium who's not wearing a jersey.
>> He's wearing like this >> two-tone blue rugby shirt. It's the weird. So share with everyone why you >> you show you probably showed up a suit and tie. Here's a hot take for you. I think it's completely ridiculous for adults to wear hockey jerseys.
>> No, you can wear hockey jerseys is a little bit frowned upon with a name on the back.
>> I just think it's like I'm an adult. I don't need to wear I mean I don't know.
I know I'm going to get killed on this comments. I just think it's I don't it's not my style. I would never wear a hockey jersey.
>> Fire this guy.
>> It's for children. Hockey jersey is for children. But yes, Keith, you're right.
It's a sea of red. And by the way, the red jersey is not even the nicest jersey. I think the white jersey is nicer.
>> I'm not going to the game with him anymore, Keith.
No, my parlay is over.
>> Yeah. Anyways, there you go. I'm the only one in the Maybe that's why we lost because I wasn't wearing a jersey of a of a teenager.
>> There you go. Happy Keith. Now you Now everybody knows my deepest darkest secret.
Okay. Okay. Uh could be worse. Yeah, guys. Halifax. We're clinging to like four or five degree weather >> and you know that that's it. I got nothing awesome to share except next week is going to be a lot of fun.
>> Oh yeah, >> Stephen tea up.
>> Good segue.
>> Stephen, what are you doing next week?
>> We have the June 3rd the Looney Hours in Toronto with the Lunar Hour investor series with um Ron Butler, friend of the show, and Dan Foch, who I don't think we've had Dan on the show yet, but he's been at at several our events. So, we're going to do sort of a presentation style.
Rich and Keith are going to sort of chat about markets and portfolio positioning, etc. And then we've got a housing panel with myself, Ron, and Dan. So, yeah, I don't know. There's a link. There's only a few tickets left, but uh if you're listening to this podcast and there happens to be some still left, there will be a link in the show notes below that will take you to an Eventbrite page where you can buy a ticket. That ticket includes, it's an open bar, so we usually lose money, uh, and food.
And >> the Calgary guys, we lose money.
>> No, we got killed in Alberta. That was not We did not I did not budget for the alcoholism from that part of the world.
>> I respect that though. Respect the hell out of that.
>> One guy from Red Deer. One guy from Red Deer King that pushed us off.
>> Sorry Steve, I interrupted you.
>> I'll never forget that one Looney Hour event we had in uh Calgary. We did a lawn bowling.
>> Oh man, we got >> And we had like we ordered we bought a lot of booze. Some guy walked out like he the tickets were 20 bucks. Yeah.
>> Some guy walked out at the end of the night with leftover booze. He took a 24 pack home.
>> Yeah.
>> Pizza. And a full pizza.
>> For 20 bucks.
>> That's not going to happen.
>> Basically, what I'm saying is if you don't come to this event, you're losing money.
>> Yeah, that's right.
>> So, >> anyway, oh, and oh, excuse me. And one more thing for the some of the people who might not know it. It's not in the Danfor. It's not It's not East Toronto.
Where is it again?
>> Uh, it's Queen Street West somewhere.
>> Anyways, it's downtown Toronto. It's a good spot. Don't worry about it. Just show up.
>> Bring your Habs jersey.
>> And uh, anyways, we got a special guest this week. We have So, I'll tee it up.
We've had him on before. I'm not going to read his 76 page bio. That's not a joke. He actually has a 76 page bio. So, Professor Michael Gist, he's a Canadian lawyer, professor, and one of Canada can Canada's best known experts on internet law, privacy, copyright, telecom, and digital policy. He's a full professor at the University of Ottawa Faculty of Law and holds the Canada Research Chair in Internet and E-commerce law. Basically, we had him on the podcast, Rich. I believe it was episode 86.
We had on to talk about Bill C. C1.
>> Yes. Bill C11, which is basically the streaming act, which we have more updates on that this week. We're basically, if you're wondering why you don't get like news media, for example, on your Instagram anymore, that was part of it. Uh, so we brought him on to talk about that, but we're bringing them back on because there's a lot of controversy circling around the internet today on Bill C22.
So, Bill C22 is called the lawful acness, basically slash surveillance bill. And effectively what it is, it's a proposed law uh proposed lawful access legislation aimed at giving police and national security agencies faster tools to obtain digital information. Justice Canada says the bill creates new legal tools for timely access to information, including subscriber information, transmission data, tracking data, and production orders. In plain English, Ottawa says, "Law enforcement is struggling because crime has moved online and evidence is often held by telecoms, platforms, encrypted apps, cloud providers, and internet companies." Uh, and so effectively what they're the concern around it is that um it's it's creating a Canadian surveillance framework.
So there's two concerns. One is mandatory metadata retention and technical mandates that could pressure companies to weaken encryption or build basically um access capabilities into the effectively what they're saying major tech companies have come out and said um they're warning the bill could create pressure to weaken encryption to allow secret government orders affecting secure products while the government has argued the bill is encryption neutral.
Basically, they're creating backdoor I mean, I'm not a techie guy here, but they're creating backdoor loopholes effectively um for national security purposes. But they argue, tech companies of course argue that this is creating weakness in encryption and privacy concerns and just opening up Pandora's box to be abused effectively. Yeah, our uh new um strategic partner would love this type type of technology.
I mean there's all kinds of I mean we're going to learn about it obviously with professor guys. We're really grateful to have him on um you know um we're at the end hopefully you guys remind me remind me what Canadian citizens can do. um you know, maybe it's right to your MPs or whatever, but I don't know, you be the judge of whether or not I think it people whe whether or not it's appropriate, whether or not it's the right thing to do from a crime um and legal perspective. I think it's really fascinating. I think it's just a continuation in this trend. We talk a lot about trends, Keith. Um this trend our government is on. They want to restrict access to the internet. They want to manage what you see and when you see it. They want to control um I mean they want to have Yeah. They they're not interested in your rights as a citizen.
That's my very biased view, but I think that um there's more and more evidence to to demonstrate that I'm I'm correct.
We're going to find out more about it.
But yeah, I'm excited about I think it's it's really kind of a scary bill and no no better person to have come on talk about it than Mr. Guys or Professor Gist.
>> They're trying to read they want to read the Looney Hour group chat.
Oh, we're screwed if >> Oh dear.
>> Oh dear.
>> All the organized crime that we have.
Yeah.
>> Without without further ado, let's bring on Professor Michael Gist. Professor Gist, welcome back to the Looney Hour.
The second second appearance.
>> Oh, that's cool. Thanks so much for having me back. We're uh we're honored to have you back on the podcast, but maybe so give us a quick synopsis or a recap here of Bill C11 where we had you on in episode 86. Could you kind of update us where that file is today? Like what are Yeah. Where are we at with that?
>> Sure. So that was the streaming bill that was really controversial at the time as I recall because there was concern that it would be applied beyond just traditional streaming services into userenerated content. Tik Tockers and YouTubers and podcasters, which is why it would have been particularly relevant u to you. Now, bill ultimately does pass with still quite a lot of controversy.
The government sort of follows through on a commitment that they made by saying this isn't who we don't intend to cover social media. And so they issued a directive to the regulator, the CRTC, saying scope out social media. Now, they should have just scoped it out in the bill, but that's a whole another story.
But much of the heavy lifting, the specifics were was left to the regulator, to the CRTC to figure out. A couple of years ago, they came up with an interim decision that applied a 5% interim fee that streamers were required to pay of a cert streamers of a certain size were required to pay. That goes into a series of different funds. They allocated to a couple different places to help support Canadian content. But in some ways, the bigger story took place just over the last week or so where the CRTC came up with part two of that decision in which they said that was just the first that was almost like the down payment. Here is the rest and the rest is now an extra 10% of their Canadian revenues for the most part not going to funds. There's a small amount that does, but most of it instead is the CRTC basically directing where foreign capital has to go and the conditions that that that arise as part of that.
So, they say, "You've got to take a chunk of that money and you have to strike deals with Canadian-based producers, uh, film and television." The Canadian-based producers have to be independent. You can't own them or or anything like that.
So, no self-deing, but even more, they've got to own the copyright. So, you've got to invest, but you can't own the ultimate product. And no surprise, we've got a lot of streamers who aren't too happy about that. There is one other element that let me quickly just put on the table and that is to do with this issue of discoverability which was a big issue back then too. This question of you know what would the CRTC do to try to encourage greater visibility of Canadian content and they've now given a bigger hint about what they plan to do.
So this is certainly going to be a big part of the mandate and they're actually extending this beyond just streamers.
They're including devices like smart TVs and set top boxes, all of which will have to promote Canadian content within what your smart TV looks like. And they're talking about not just promoting Canadian content, but they want metrics on how much Canadian content is being watched. And presumably once you start getting into those numbers, the regulator says, "Well, if not enough is being watched, then maybe more needs to be done so that more Canadians watch what we want them to watch." And uh that I think for many is a pretty concerning uh potential outcome.
>> So they're going to force people to watch the Lunar Hour.
>> Well, I mean don't count. Sorry. Sorry.
Go ahead.
>> Can you just see it? People have like the clips in their eyes are widened, you know.
>> Yeah, that's right. Clockwork Orange.
>> Yeah. Michael, can you give us back in the um toward the beginning of of your explanation? give us an uh like an example of how would look for uh a non-Canadian firm or entity how they would be forced to do this to produce a program or something along al along these lines and and give it an example so the audience will go okay yeah you know Apple is supposed to do it this way and it's going to cost them that do you see what I mean >> yeah so I think I let me back up with just two other points to say that companies like Netflix and Apple are already spending hundreds of millions of dollars in Canada producing various film and and TV productions. The problem here is the CRTC says none of that counts.
And the reason that none of that counts is that say a company wants to produce a show and and it might be a show that is, you know, Canadian in just about every way. Canadian story, Canadian actors, a Canadian crew filmed in Canada. the Netflix position is going to be, okay, we're going to fund that. We're going to fund it at a worldclass level and we want to then distribute it globally and we want to own it. And the CRTC says, well, ah, that doesn't count because you can't own this stuff. So, you can invest or you're now going to be required to invest. You have to find Canadian partners to invest with to say they come forward and say, "Hey, we want to do a production." You got to put money in, but you can't actually own the product that comes out. Canadians have to own the intellectual property that comes comes out of that. And not only that, but those same companies already spent big money promoting Canadian content globally, right? You think of shows, I don't know, like Shitz Creek that was a, you know, a popular Canadian show, but became a global phenomena once it was on Netflix and got promoted globally.
>> Part there's another one. CRTC literally says that doesn't count either. We don't care how much you spend promoting Canadian content globally. None of that is a contribution for our purposes. We just want you to basically show some of these partners the money.
>> I'm just thinking like go buy is one of those firms I would just like all right screw you guys. We're out. Like what do then?
>> Well, probably not. Or at least that you know that that might be the temptation, but I don't think that's what they do. And I don't think that's what they do because there are some other options. Like, and let's be clear, Canada is a good market for a company like Netflix. So, the idea that they're just going to say they're out doesn't make a ton of sense to them.
And the truth is, other countries do some of the same similar kinds of things, though not quite as extreme and at the same rates as what the CRTC just proposed.
>> Communist China does that, I think.
Right.
>> Well, many European countries do it. Uh, Australia does it. We don't have to go to China. We can find lots of other countries that have uh domestic rule domestic content rules both in terms of contributions and the like. Most countries let's say in Europe have it at a couple of percentage points. So it's very rare to see this high a percentage.
France would be a notable exception. It is also very rare to see a country take the position that you simply can't own the IP. And that's I think a really important part part issue and the reason for that is that many trade agreements make it clear that you can't condition investments in this way and among those trade agreements would include Canada's trade deal with the United States. So KUSMA or the USMCA under the investment in the investment chapter has restrictions on what would be known as performance requirements. So you've got an investment from an entity from the other country. They come in, you can't establish certain kinds of performance requirements. This would be a pretty clear-cut example of a performance requirement where you have to invest, but you can't own the IP. Even countries like France, Italy, Australia that uh have pretty high percentages of investment requirements don't take the position sort of absolutely that you have you can't own the IP. And the risk is in the Canadian context. Yes. What are these companies going to do? Well, I think they're going to legally challenge the decision. I also think they're going to look to play this out in the trade arena because what happens is if this is a primmaaccia case of violating Canada's trade obligations, then the response from Canada is going to be well maybe so, but we've got the right to do that in the treaty because we have a specific exemption for culture. Cultural sector has an exemption. But there is a there is a condition or a caveat that attaches to that and that is the US is entitled to levy tariffs at an equivalent rate as the benefit that Canada has from using that cultural exemption. In other words, if this is worth hundreds of millions of dollars from a Canadian perspective for film and TV, the US would be entitled to levy tariffs in the in the hundreds of millions of dollars. And they can target any sector they want. It's not limited just to film and TV. They can target dairy or lumber or steel, whatever sector they want. They can levy equivalent tariffs.
>> Haven't we already heard the Trump administration >> come out and say, you know, if they're we want to tariff like Canadian films, like things that are produced? I don't know if again is that is that somehow correlated to to all of this or No, >> no, that's not that's just the occasional Trump rant where it seems like every every 6 to 12 months he talks about uh tariffing foreign films. No one is really clear on how he would actually do that. Um >> okay, >> because because it's intellectual property. But this is unquestionably a big trade issue. And what makes this particularly notable, as I'm sure you know, is that we're about to enter into renegotiations with the United States on Kousma, and we've just handed them a proverbial trump card. You know, no pun intended here, right? Where we are going in knowingly violating the existing deal, giving the US the ability, if this follows through, to apply hundreds of millions in tariffs. And of course, you know, we've just gone through a process of of a year and change where the US has been very active on the tariff front and Canada's response has often been, well, these are unlawful tariffs. We're going to retaliate. In this instance, this is a tariff that we literally negotiated would be permissible so long as we use the cultural exemption. There is no ability to say in this instance, well, no, no, no. I think you're wrong. You shouldn't be levying this tariff. Here's one that we actually essentially asked for. We wanted the right to apply the cultural exemption and agreed that this would be the price for doing so.
>> So that's embarrassing. I'm going to jump ahead again. One more question, Rich, before you change subject a little bit.
>> I'm not going to change subject.
>> I got a feeling you just uh so Michael, in in plain language, if if you're the person in in parliament and you're addressing the country, what is the reason for this bill? What what is it trying to achieve besides maybe a financial investment? Is there is it trying trying to protect Canadian identity and and and culture or because it seems, you know, the deeper we swim through this, it gets more and more complicated and then people tend to lose sight of what is it trying to do.
>> Yeah. I mean, bear in mind this was a decision that and legislation as you said we talked about number of years ago, right? So this dates back quite a while and at that time the the mantra of the government was make web giants pay.
Well, this is what happens when you take an approach that says we want to make web giants pay and it's consumers and others that end up footing the bill. You know, I'm not wholly convinced that if the government was thinking about legislation today, this is precisely what they would do. In fact, it wouldn't shock me as part of renegotiations if Canada was willing to seed on this issue. this just this doesn't feel like a carney issue in the way that it did a Trudeau issue. Um, but nevertheless, I mean, this that's it's fundamentally about bringing in money with a cultural lobby that has had the ear of the government for for a long time. I think it's very hard to make the case that this is about jobs or about uh Canadian, you know, traditional Canadian culture, so-called Canadian stories, because if it was, we'd recognize that those services, as I mentioned, already invest heavily in Canada, right? So they already major employers of people in this sector based on those investments.
They are already producing content that many would recognize as Canadian but for the fact that they insist on owning the production for pretty obvious reasons.
So I don't think it's that. Uh I think at the end of the day it's something that proves popular with a certain segment uh particularly in the you know the cultural communities and in Quebec.
And so that's why we see this playing out the way that we do.
>> So my question is um I see a Seattle Seahawks flag there and I wanted to give you an opportunity to gloat over Keith who is the biggest 49ers fan I know and I know that they're big rivals. So if you need to say but give you so here the floor is yours if you have anything to say to Keith.
>> That's all good. You know I'm a I didn't know that but I'm a I'm a long-standing Hawks fan dating back to Steve Larent and Jim Zorn. So it's been pretty great to our second Super Bowl. I do see a go Habs go uh yeah sign in the back there.
Uh I I got to have some Leafs thing here somewhere. So um there's plenty of space for people to gloat the other way too. I suppose, >> Michael, they Richard and Steve have never heard of Steve Larent before, but I I understand. I appreciate it.
>> Hey, so >> um >> Wait, wait, no. I I have a real question.
>> Oh, I thought that was your question.
You using them all up. Hurry up.
>> My question is just you touched on it briefly, but it's like who is So, like, you know, Keith asked like what's the point? And I'm saying like who stands to gain? I mean, you know, we know a lot about the we hear a lot about the big lobby groups in America, the NRA, you know, for guns or, you know, you got the Israeli lobby, you got the oil lobby, you got whatever. Who is the lobby? Is there like a specific group or lobby group in Canada that's very much pushing this bill? And then maybe Steve, we can move to >> the C the CBC lobby.
>> Yeah, but that's because that's what I'm saying. Like they already get so much money. you've you've you've in you've indicated that these streamers already invest quite a bit. So, you know, is there just like, you know, a cabal of people in the Laurentians that are keen to start uh film companies right now? I mean, how does this work exactly?
>> Yeah. Well, my candid view would be that there are at least we we could broadly take the film and television production sector in Canada and put them into two buckets. And there's lots of room at the edges to to take issue with this. But there is one sector that sees a global opportunity from streamers and are like this is a golden age. We've got all these large producers that in in the form of streamers that are willing to fund great productions and give us global exposure and a global platform.
You know, let me jump in and compete. I think I can create something great. We have another segment and this is sort of the more long-standing segment that has always existed primarily on the basis of a regulated sector that mandated crossindustry subsidies where you've got certain groups let's say broadcasters that would help fund the creation and the name of the game wasn't necessarily global success although that would be perfectly nice it was simply to make stuff and so that regulated space where there's what they would see as a virtuous a circle of broadcasters need some of our content because regulations say they need some of our content. So, they will help fund that content. We will help make it.
Doesn't matter if it's popular or not.
As long as it's there, they're happy to put that out. They then pay and we get to make something further and so on and so on. The issue that's arisen in recent years, of course, is that more and more people are pushing towards streaming.
And so the amount of revenues that broadcasters can contribute has declined. That then has the effect of saying well we are worried that this cycle is going to has diminishing returns. Their goal was to find a new source of revenue. And in fact in the CRTC decision the contribution required of the broadcasters declines. The CRTC says we're going to lower the percentage they have to put into this. So it's pretty explicit. It is about bringing a new source of revenue into this system, reduce the obligations of the broadcast of the traditional broadcasters and just continue the cycle all over again. But you know, this is so divorced from the world today where the opportunities are enormous, but it's a much more competitive environment and it's not just about making things, it's about making great stuff. Nobody sets out to make bad stuff. But if your incentives are primarily driven by this sort of regulated system as opposed to well what have you done lately and you know what about this idea and all the rest of it you get different kinds of outcomes and and just to to to put a a cap on that what's notable about when we look at the numbers from the sector it is always about how much has been invested and spent. It's not about how much we're earning from this. It's not about audiences or anything like that. What gets measured is always how much is being invested in production. And so if that's what you're measuring, that's what you're going to prioritize.
>> Professor Gist, how come I can't uh still see news on Instagram? Canadian news.
>> Okay, so that is that that moves us to a different piece of legislation. That's the Online News Act, which was at the time bill C18. And >> wasn't they all didn't they all come out kind of the same time?
>> They came out pretty similar. It was supposed to be three bills altogether.
It was supposed to be the Online Streaming Act, the Online News Act, and the Online Harms Act. The Online Harms Act was one that came out a bit later, but >> who was running that file at the time, wasn't it? Stephen Gilbo.
>> Yeah, we've had a few there were a few different heritage ministers. Gibo was the one that kicked it off. Um it then moved to Pablo Rodriguez for a time. Um and then Pascal St. An was the was the minister that kind of took it over the finish line in in a couple of cases.
>> Um and so yeah, so that that news bill >> was all about trying to get large platforms to pay money into traditional news outlets, primarily print, but also digital. at the time, not broadcasters, although it seems now we might have the prospect of having broadcasters added to some of these systems. And so the idea was you link to our content, you being certain large platforms, and so you ought to pay for the privilege of doing so. The platform's response was those links are really valuable to you. We are driving traffic to your sites that is that generates new subscribers and ad revenue. It's a pretty decent quid proquo. And the the government was like, well, no, we still want want to require this. And they were, of course, being egged on by the media lobby to do so.
Meta, which owns Instagram as well as Facebook, of course, said from the very beginning that news was not a particularly valuable form of content on their platform. And if you think about social media, it's pretty obvious why.
That platform is all about getting people on the platform, keeping them there as long as possible so you can learn as much about them and serve up as many ads as possible. Viewed in that light, news where you click away from the site is actually pretty terrible content. Uh so they said, "Listen, if we're going to we'll we don't mind including links to news, but if you're going to force us to pay for linking to news, including let's let's be clear, it is our users that are posting these links. It's not us. We're not indexing this. We're not deciding what's there.
It's users that make these decisions.
Well, we're just going to stop linking altogether. And legislation that is premised on making those that link to news pay for the privilege of linking to the news, of making it available. They say, "Well, okay, fine. We fall outside of legislation because we're not linking to it anymore." Um, that's that's in a nutshell why you still don't see news links because the government sort of says, "We think you're bluffing." They go ahead and pass the legislation. uh Meta through both Facebook and Instagram cut off the news links and we've remained in that space for now two and a half nearly three years. The the other company that was targeted by all of this was Google. Google was a Google said similar kinds of things, but their issue was always a little bit different in part because they of course were they were proactively indexing the news to try to get the best possible search results. And so in the end they negotiated a deal with the government where they are paying hund00 million a year that that that's a decent chunk of change. But if you subtract what's been lost from Meta, including the license deals they had, and you exclude the license deals that Google had before, it's not as much new money as one might have anticipated. Um, so that's where we're at. Sort of a bit of a heads up about where we may be going. We modeled our law on on an Australian law that tried to do much the same thing. Meta has said that they will no longer pay for news links in Australia, much like the situation in Canada. And Australia has proposed responding with just a straightforward tax. They say, "We want to we're going to tax, I believe it's 2 and a4% or 2 and a.5% of your revenues in the country um and have that money transferred over to news." So they've, if this goes ahead, they've given up even the pretense of saying this is about any sort of compensation. It's just a straightforward tax to cross a new shake.
>> Exactly what it is. That's all it is. I mean, and they are now straightforward about saying it's not about links. It's now about the fact that much advertising has moved from those traditional media to the digital space. Do do these people ever have any kind of selfreflection as to say like maybe it's because we produce shitty content that people have stopped coming to to our websites like >> well in in the Australian instance I think it's probably as it's primarily they would if if pressed they would acknowledge that Rupert Murdoch happens to be uh be the press baron in Australia and Rupert Murdoch would like to get paid and so u that's a pretty powerful position to be >> I get that um you know you know they I think they would make arguments that it's still tough to compete even if your content is great but the truth is we do see examples where people are able to compete you know globally of course sites like the New York Times but even in Canada Village Media is a perfect example of a digital first news outlet that is operating in dozens now of communities in Ontario and elsewhere and one of their metrics was always you know is this uh community that has either lost their paper or could help could support one of these and there is still going to be interest in advertising. We can do it by serving the needs of the community with news that isn't typically available elsewhere and offer an ad space to advertisers who don't have as good a way to reach their communities.
And so they've been hugely successful in doing so. So yes, there are ways to be more innovative and uh some of the companies just feel I think that it's easier to pressure government to regulate in the space.
>> It's kind of like there's a company like Daily Hive here in Vancouver. I think they've expanded across most of Canada, but they they they were like they had a huge Instagram account and then as soon as that uh basically meta effectively basically blocked them and uh yeah really really impacted them. So it's funny, you know, you look at the repercussions of like who this has ultimately impacted or who's it benefited. At the end of the day, it's like the consumer loses.
>> Oh, for sure. For sure. Huge impact on you're it's it's you're you're right to highlight the impact that it's had on some of the news outlets. It's been negative both in terms of the the obviously the links and the feeding traffic, but it's more than just that.
It had an impact on investment in the space where you know would be investors in media took a look at the Canadian market and said, you know, if we're at risk of having two of the most important distribution platforms not distributing our content, why is this a jurisdiction that we're going to invest in? Or even if you were thinking about entering into new markets, Facebook was a primary way to try to enter into a new marketplace.
That's how you began to attract readers.
If you can't attract readers that way, can you enter into, you know, the the the barriers to entry into new markets becomes all that that much greater.
>> Hey everyone, it's Keith here, your favorite Looney Hour co-host. As you know, we also run Icecap Asset Management where we manage investment portfolios for individuals and families right across the country. We use strategies to protect and grow your portfolio based on many of the conversation that we have right here on the podcast. The world is changing very quickly today. And if you're interested in improving your investment portfolio, then reach out and connect with us directly. We'd be happy to have a conversation with you. See us in the show notes below. Now, back to the show.
Can we talk about Bill C22 now and why like what it is? First of all, sorry, the more problematic elements. I know it's like a wide-ranging piece of legislation, but I've been reading your tweets. Uh, you know, I go on your website. Can you explain to us more like the the more problematic aspect of it with respect to um you know what? Yeah, just the whole thing, please, if you don't mind.
>> Sure.
Thanks a lot, Rich. That was really helpful. Well, good. The whole thing >> cover everything, you know, in seven minutes.
>> Yeah. Okay. So, so lawful access is an issue that predates both of our podcasts. Um, it goes back now, you know, several decades. Some people may remember at one point in time a conservative minister named Vic Taes who tried to put forward legislation that was somewhat similar and talked about, you know, people who opposed it and and said, "You're either with us or you're with the child pornographers." which was a pretty stark way to frame it. And and there were people that said, "Well, if that's the choice, then somewhat reluctantly I'll take the child pornographers." Uh, and so the, you know, the this issue has been fundamentally about under what circumstances can law enforcement obtain access to subscriber information or other information about people for investigative purposes. And so that runs the the gamut from obtaining basic subscriber information, which the Supreme Court of Canada has consistently ruled may have some real privacy import.
You know, if you know lots about a an individual doing certain things online, but you don't know their name or IP address, that's the link, right? And so on its own, a name or IP address might not seem that it's got all that much of a privacy import, but the fact that it connects to all this other information is what can make it quite sensitive. So there's been that access to basic subscriber information and so and that issue continues to play out as to under what circumstances can law enforcement obtain the information. There is another element to the bill though that's proven far more controversial and that really has to do with the kind of assistance that digital that what are called electronic service providers have to provide to law enforcement and I should note you guys are electronic service providers here too. Uh, so this isn't just telecom companies. This isn't just large internet companies. The way this is drafted is large enough to include podcasters and frankly just about anybody that offers a service electronically. And there are at least a couple of elements that I should should quickly highlight. One is what's known as a mandatory metadata retention requirement, which is a bit of a mouthful, but what it effectively means is that metadata information about where some about the devices people use, where they're located, who they communicate with. So, not necessarily the content of their message, but all the information about the message itself. All of that will under this law could be required to be retained by providers for up to a year. Now, at the moment, many providers don't retain any of that information or if they do, they do it for a fairly short period of time. There's not a lot of commercial reason to do so. If you're requiring retention of metadata for a year, which I should note the United States does not require at all. Europe has struck down as being disproportionate. We're talking about an enormous amount of information essentially building a massive hay stack covering 99.9% of Canadians that haven't done anything wrong in order to get the proverbial needle every once in a while and you're retaining that for a full year. It raises huge potential privacy implications because it basically creates a surveillance map of just about everybody for an entire year. I mean, think of your device, which is typically going to be on your person everywhere you go, and someone can map out this is when they go to the gym, this is where their kids go to school, this is where they typically eat out. Those patterns recur, and you can begin to have and you have all that information stored. That's got a lot of people freaked out. The other element that's got a lot of people concerned has to do with the assistance or support that these companies would have to provide to law enforcement. And there is a lot of concern that this could lead to requirements to break encryption or to create back doors for law enforcement to be able to access this. You've got the giants who have all spoken up, the Apples and Metas and Googles saying we don't do this anywhere and we sure don't want to do it here either. Professor, why are why is this government I have a couple more questions, but why is this government so insisted insisting insistent on destroying like our basic constitutional rights to find criminals and then give them bogus sentences anyway? Put people on parole for beating their wives and raping people and killing people. I mean, we hear about it all the time. people do all kinds of heinous things and then are put away for basically no time at all.
>> So I I don't get like the the insistence on being sort of a police state online and then being you know you know Teletubbies in the courtroom with respect to judges like I don't get that you know I mean if you're going to be a police state just go full hog you know.
>> Yeah. So I'm not sure that I've got a great answer to some of the concerns that you just expressed about the criminal justice system. I I I I I would agree that there is a lot of frustration with somehow this plays out at the moment. I I think in some ways that's a little bit disconnected from what the government has in mind here though. This is what and and we could just take a look at what law enforcement's been saying. They were up before committee just uh the week that we're recording this and you know they essentially say listen there's a lot of crime out there.
We need these kinds of tools. Part of the problem is that a lot of what they're suggesting is more of a resource issue than it is a legal issue. Right?
So part of the problem is they say listen it takes a long time for us to do this or that or to get the information.
But that's not a legal barrier. That's just because there aren't enough resources in the system to help assist on some of those on those kinds of issues. And the other problem that I see is that they have really failed to provide effective use cases or evidence about why this is both needed and proportionate. So I think everybody's would agree they want law enforcement to be able to do their job effectively and and try to identify criminal activity. I think as your question suggests people would like to see the criminal justice system once that happens feels a little bit like an episode of law and order once the you know they want that second half to work effectively too. Um, but this is at least debating the first half about how do you find the criminals in the first place? And part of the problem is that many of much of the evidence they put forward really is inconsistent with the kind of proposals that are included in the legislation, right? So, you know, they'll say, you know, we we might need to be able to track, well, actually, perfect example, they said if there's a shooting or another violent incident, we want to be able to know who all the all the bystanders who might have been there at a given moment in time. Now, I find that a little bit of a chilling example to say to literally acknowledge that what they have in mind is this surveillance map where they can go back in time and figure out who happened, who was at a given spot, right? I mean, because you do for that, you can do for anything. You know, who went to a political rally, who went to this, who went to that. Of >> course, that's that's the obvious takeway.
>> So, I think it raises real concerns on that front. But the other is even if you are convinced that this is something worthwhile, there's just no evidence that you need all of this information for a year, right? I mean, you could make the case that, well, I need it for 30. Let's keep it for 30 days. So, I don't know what I don't know. And in that 30-day period, perhaps something's happened. I need that evidence. I can then go to the court and get a court order requiring a provider to continue to preserve that metadata for a longer period of time. But the idea that you need to collect and retain everyone's metadata for a year, I just have yet to hear a single example of why that is proportionate or necessary. So, >> do Canadians have a right to free privacy?
>> Of course.
>> Okay.
>> Of course. And in fact, what this has uh you know what has sparked some of this is that the Supreme Court of Canada has regularly affirmed that right in cases known as Spencer and Bikovitz. And so part of what what has happened is law enforcement says they are, you know, they're concerned about people's privacy too. But I think their conception about sort of how far that privacy extends differs from well at a minimum the Supreme Court of Canada because some of the systems they put into place have been struck down by the Supreme Court now repeatedly saying you haven't done enough to protect people's privacy. And and I should note I think there's a real risk that we could see the same thing happen here. So the the the backlash is probably similar to some of the other bills that we talked about earlier in the show, but I think there's been a whole bunch of companies now saying that they would potentially just leave Canada entirely if if this comes. So I think it was uh all these a lot of these VPN providers, Signal, Windscribe, ignoredVPN, ExpressVPN um saying that basically, you know, they they don't they don't track this this metadata stuff and and they would just leave.
>> Yes. Yeah. No, that's right. No, the the big players, you know, the Googles and Apples and Metas of the world, they're they're not leaving. Although you know some of them have services that if confronted with this kind of legislation they might well say that the service itself cannot continue to exist in Canada. That's actually what happened with Apple and in the UK where the UK tried to pass some similar stuff and Apple's response was some of the privacy protections that we've built into the product we can't continue to offer here if this is what you're going to require.
So there's the prospect of making Canadians less safe if some of these companies withdraw some of those kinds of services. But to your point, you've then got different classes of other services like VPNs that say, you know, our whole model is based on not collecting and retaining metadata. It is based on encryption. And if your position is we've got to retain metadata and potentially create back doors by breaking encryption, well then we can't continue to operate here.
Can I have a ask a question? So, you know, I'm not a big conspiracy guy, so this is a little bit uh out of >> I am. I have a few ideas.
>> This is a bit out of pocket for me. Why are the UK, Australia, and Canada and Ger and Germany and rest of Europe so gung-ho on this just philosophical insistence on controlling the internet when it's demonstrated that's not where the crime's coming from? That's not where the the the terrorism is coming from. You know what I mean? Like what as a as a legal thinker and legal mind like what what do you think is their motivation?
Yeah. So I I would exclude Germany from this. I do think if we're in what's known as the five eyes, so that's five countries that have active cooperation with respect to signals intelligence. So that would include the UK, Australia, Canada, and New Zealand. Uh in that instance, you know, there there is active cooperation and it becomes a bit of a one-way ratchet where, you know, one country says this is what we're going to do now. And so then the other countries say, well, okay, we got to keep pace and got to ensure that our investigators have some of the same powers and that we can interoperate. So that's part of what's driving at least that on the security side. But you are right to highlight some of the other jurisdictions that have been more actively involved if not necessarily on this specific issue, but more on the internet regulation issue. And you know, I listen, there are real harms that take place. I don't think anybody would take issue with that. the the question is how do you find ways to strike an appropriate balance? And on this instance, it feels like oftentimes politicians are just responding to either public demand or what they think will sell. You know, we're seeing this play out in the online harm space in Canada right now. We may see over the next few weeks a new online harms bill that the much of the talk is social media bans for kids and um AI chatbot bans for kids which has in on one level sort of the attractiveness of saying well this is uh you know popular with some people. Um, but at the same time, the effect of some of those bans would be basically to require all Canadians to verify their age to be able to use AI or a social media service because if you're saying you want to ensure that you exclude people who are 16 and under, by definition, you've got to know how old everyone is to be able to identify what their age is. And so suddenly we've got tens of millions of people either uploading IDs in order to be able to do general sorts of things often to services that aren't based in Canada subject to Canadian privacy laws or you get into the game of age estimation where they take a they take a picture essentially or look at the that the person's image and try to guess how old they are. Um which we know doesn't work if you're trying to distinguish between a 16 and a 17y old. So what the system then does is say, "Okay, well, we going to track now. Who are your friends? What kind of language do you use when you talk online to try to get a better guess?" Well, we're trading surveillance for more surveillance if that's the case.
>> I mean, that's what the people in the UK I know are really upset about. It's just sort of a it's you um what is it? A digital ID basically by the back door.
>> Isn't it the UK where you can like you you know you send out a bad tweet, you can get like arrested.
>> Yeah. Yeah. They they threw 12,000 people in jail for it. And there's I mean there's all kinds of people in Germany who call if you call politicians fat and stupid they like knock on your door. I mean my goodness lobby over in five minutes.
>> You can't call them stupid. That that's >> No, you can't. They's a lady who there was a lady there's a gentleman called a lady a politician like fat stupid lady and he was literally arrested.
>> Is that true? Professor G >> that I don't know but this guy get him out of here.
>> But I heard it on this podcast so it must be true. But I I'll share with you what I think is is happening sort of like a bigger broader picture and I think we'll agree with some of it or a lot of it. Um you know mainstream media has lost control of dominating whatever message that's want to been communicated. So all across the west. So whereas they used to control 100% and went to 90% 70 I would argue today the mainstream media controls a very small component of the overall message. I mean you have podcasts like us and you know any other platform you want you want to think of.
Then you overlay on top of that uh this then comes down to the economic financial and and debt story. Um, I believe the Western world is terrified of their citizens becoming acutely aware of how ineffective our economies are now actually running because of debt that's been accumulated and and so forth. And so they're they're really trying to clamp down and try to be proactive on, hey, who's who's potentially a threat to our system? Which what they're desperately trying to cling on to. And I know, you know, everyone here is going to say, "Oh, you know, that's not true."
But it it's kind I think you have to look at it from a whole from a holistic perspective because I keep coming back to why why do they want to do this? and you haven't shared any solid reasons why they want to do this, you know, instead, you know, opposed to, yeah, we want to find the bad guys on the internet and we've already determined that's incredibly hard to do and even if you do, you're not going to be able to uh prosecute them anyway, as Rich has pointed out. So then it goes back to why like why there's there's another reason at stake here. And so that's my view and I don't think this is going to change.
you have some countries that are have a more momentum with it and they're, you know, they're incentivized to carry through and if you ask the MP involved or the congressman involved or, you know, whatever they are over over in the UK and so forth, they don't really know why they're doing it either. But I'm I just believe there's a there's a bigger theme and narrative at play here and, you know, very few people can appreciate it. So, it's not really a question. It's just simple coming from the looney hour.
>> Get out the tin foil. What do you think?
>> I I Well, there's a lot there. I guess I I I would start by saying I certainly agree that the the that the replacement of the mainstream media by a far more disperate collection of different sources has made sort of the singular message and the singular communal experience that might have been you know typical of a prior generation that is that is now lost and that does create a sense of loss of control uh for certainly some that were in positions of power that previously were able to rely on certain channels to get a message out to a very large percentage of the population and that's now gone. And so that I think would be viewed as as a as a certainly it's a it's a threat or a a new kind of challenge for for some of those people and so they're responding in a number of different ways.
>> It's made governing more challenging.
>> For sure. For sure.
>> Yeah. I well I mean I know this is probably like a long longer conversation but to sort of pull on that thread I do sort of wonder about like how much of this is setting up for an era where you're going into AI you're seeing and it's so early right but you're seeing more and more obviously like yes there's a lot of like fake news out there but like deep fakes that are created through AI and these personas on I think that's going to be really interesting to to to sort of how you govern like a modern society where you you You can create content at the click of a button and it's hard to tell how do you verify what is real, what is not real.
>> It's exceptionally you know what I'm just going to pick up on that. It is it's exceptionally difficult and and that is I think a legit threat. I and I don't know that we've got great answers.
I I'm just coming off teaching an intensive course for students from several different universities. And one of the things that we do as part of that course is have the group the students from different schools together to do presentations based on Black Mirror episodes from the the Netflix show. Uh and in in one instance the students created a voice clone of my voice and created a fake podcast, one of my lawyes podcasts using my voice about the episode which I mean well I knew it was AI because I knew I hadn't done it but for the average person listening to the extent to which they sort of just kind of you know distractedly listening you would completely think that this was real. And so, you know, to me that that really crystallized some of these challenges that we're going to face over time in terms of identifying what's real and what isn't.
>> Um, Professor, thank you again for your time. We really appreciate it. Um, you know, keep up the good work on Twitter and on your podcast. If you want to plug anything, now's the time. I just want But before we go, is there anything like regular people can do about this? I mean, do we write letters to our MPs to get our metadata tracked? like uh you know what what do what what can regular people do about sort of the infringement of our basic rights online?
>> Yeah. No, that's a great question. I get asked that a lot and I would say especially in the context of, you know, decisions that are still in the process of being made. Bill C-22 that we were just talking about is a good example of that. Contacting your member of parliament really is the best way to to deal with it. And it it can be a bit of an exercise of frustration. You're right. you're not sure if anyone's paying attention. U but I can tell you that having talked to me many MPs, they themselves have essentially metrics that sort of that inform them what issues are percolating amongst the electorate and you know it doesn't take that much interestingly enough to get on an MP's radar screen because most people don't take the time to even do that. And so if you take the time to write to your MP and you know we're getting closer and closer to summer now u and so we'll find ourselves soon enough in this the proverbial barbecue season where MPs are back home they're in the they're in their constituencies or their ridings.
The truth is raising these issues is exactly the sort of thing that doesn't guarantee a change but when they come back and start talking suddenly they start realizing you know what we're we're out of step with where our constituents are. Maybe there's a need to course correct.
>> Professor G, thank you so much for coming on Lunar Lunar Hour. Thank you for entertaining our conspiracy theories. Uh it's been uh No, it's been super enlightening to have you on. I think it's just uh it's a very like sort of niche topic that I think obviously a lot of Canadians aren't paying attention to. So hopefully, you know, this conversation has enlightened those to to do a little bit more research. what's the best way that they can sort of keep up with everything that's happening pertaining to these bills and and obviously your work.
>> Yeah, thanks for asking. So, there's a few different ways you can go. Just go to my website, Michael Gist, mic hi s.ca.
Uh, but I also have a podcast called the Lobites podcast that you can find on Spotify or Apple. I've got a Substack.
Uh, and I've got even on my even on my link even on my LinkedIn uh there's a weekly digest that comes out.
>> Yeah, you're a busy guy. you're pumping out more content than Looney are.
>> There is a lot of stuff that comes out and part of it's a repurposing because people are on different platforms, but at least right now, man, there is a lot to do and a lot to say.
>> Awesome. Thank you so much. Hopefully everybody enjoyed that conversation. I know it's one that doesn't probably get a lot of airtime.
I don't think most people are really thinking about, you know, streaming laws and, you know, tracking your metadata.
Um, I don't think most people really know or pay attention. So hopefully this conversation gets a few shares and raises raises the awareness.
I think it's an asymmetrical conversation and the asymmetry is that it is such a an incredibly important issue for not only Canadians but wherever you are in the world that your your privacy should be respected. You should the government should not have the ability to track you when you're doing if the asymmetry with it is that so few people are aware of how important it is and that it's happening. So there there isn't that big conversation about it.
>> Keith, I do agree with you in terms of like tying it all together, which is to say like society is sort of coming apart in terms of, you know, you really have this growing divide. You know, we talk about the K-shaped economy and you know, people are falling behind further and further and you know, inflation is just eroding everyone's currency and purchasing power that it's becoming more difficult to manage society.
Um, and so I think obviously controlling some of the narrative around the media and the news and what can be said online, I think obviously makes sense when you when you tie it all big picture. Um, I'm not sure if necessarily Professor G agree, but I I definitely think there's a correlation there.
>> Yeah, I'm just worried about big I totally agree with both of you. I mean, I I'm not going to add too too much. I just think this is part of a like pay attention people. This is part of a bigger trend in Canada where our basic rights and freedoms are being whittleled away. Um, and of course it's, you know, they always say it's for the greater good. you know, you have nothing to worry about. But that's not the basis of our western democratic legal system.
>> Well, like a lot of it had to do with like, you know, if you overlay this with like the central bank digital currency, which has been kind of >> USD.
>> Yeah. It's been kind of pushed to the side a little bit, but it's all like it's all it's all tied together. Um, >> universal ID.
>> You're completely correct, Steve. You're you're absolutely correct.
>> Yeah.
>> Yeah. Anyways, it's funny because you kind of sound like a conspiracy theory when you talk about them just kind of reality.
>> But they this is Okay, pause for a second. I know we have to move on, but they literally told us what they want to do with digital bank uh central bank digital currencies, right? They've told us exactly what they want to do with uh digital IDs, right? This is just we're all I think we're just listening to what they're telling us. But anyway, >> yeah. No, fair fair. Uh which is funny.
Anyways, but uh friend of the show who originally started Bill C11, Steven Gilbo, who I once uh quoted back in the early days as the most dangerous man in Canada, uh has uh stepped down. He has resigned as a uh member of parliament.
>> So, um basically, >> did he actually resign? I saw the story he was thinking about. So, he did. He's gone.
>> Done. Yeah, >> he's done.
>> Um >> there she was piping. This is clipping some uh music.
Someone get the violin out.
>> So, okay, as of 19 minutes, no.
>> So, he will uh as of 19 minutes ago, we're recording here on a Wednesday today, but uh Steven Gilbo announces he will resign his seat this summer. Um he'll remain as an MP until then. So, this summer once the barbecue season kicks off, he will be stepping down. Um and and it's all related to >> Oh, so to be clear then, he is not stepping down. He's just leaving the Liberal party to remain as independent.
He's still going to retain.
>> No, he's leaving. He's done.
>> There's going to be a bi-election.
>> So, there will be a bi-election then, >> correct?
>> Yeah.
Here's your chance, Rich.
>> But, uh I don't know. Yeah. Anyways, it's due to his his uh he's not happy with the direction that the Carne government is taking the energy file.
uh obviously going away from the Trudeau era to some extent anyways around uh fossil fuels and clean energy. So he's he doesn't align the eco uh the guy that was climbing the the towers and about fossil fuels doesn't align with with obviously what we're seeing which speaking of kind of drags us into the next conversation uh Rich because um we were told that uh there was no business case for Canadian LG to Europe, specifically Germany. Um, but Canada is set to announce a deal to supply Germany with LG from a planned export facility uh here in BC, which is the new one that uh >> Hooray. Yeah. I mean, you know, I I basically hate everything that Steven go Gilbo stands for and represents. Uh, but I actually kind of respect the guy for bailing and leaving. I in a weird screwed up way, I actually kind of respect him for being >> he has his own morals and he's stuck to them. Unlike another person who wrote an entire book on destroying the energy industry and then conveniently ignored all of that. Uh I kind of give the I give Ste Gilbo credit for for sticking with his uh his morals.
>> You guys are so naive. It's all part of the plan.
>> Anyways, okay. So back to this thing.
>> So we know that Germany, so Ukraine was invaded by Russia. Um Russia used to be the main purveyor of natural gas to Germany via a bunch of pipelines. One of them mysteriously blew up in the middle of the Baltic Sea. Um, and Germany um has tried to stop completely, although they can't fully. Um, Europe in general has tried to stop importing Russian natural gas. They've done, you know, some countries like Spain do it more than others. But anyway, um, Germany, I think, did not have any import facilities. And in an incredible feat of engineering, uh they built an import facility in like 194 days a couple years ago, which was totally cool. And then obviously they came hat-in- to Canada to beg for energy. A couple other countries did. Poland and Greece and Japan. Justin Trudeau in his infinite wisdom uh basically refused uh to let that happen.
Um and now there's been a vault fast.
And I think we have to recognize that that is it is a meaningful step in my view in the right direction.
>> One question, how does it get how does it going to travel from BC to Germany?
What is the route?
>> Oh, that's a good question. I don't know.
>> Are they going through the Arctic or down through the Panama Canal? Like how is this LNG >> I being transported?
>> We should know.
>> Crickets from the Looney Hour experts.
>> Uh we'll find out right now. I'm doing my research, but uh the proposed deal is $10 billion. Um the proposed $10 billion LG facility um is planned obviously north of Prince Roupert.
>> David 10 million. That's it.
>> 10. It's a10 billion project. Um but the actual agreement I don't have the exact figures in front of me, but um >> yeah, it is from the West Coast, Keith.
>> Yeah, >> I know it's from the Of course it is, Rich. again. How is it going to move from the west coast?
>> It's going to be on a boat.
>> Okay. Which route is it taking?
>> Oh, probably the Panama Canal.
>> Okay. The route apparently is from I'm not going to be able to pronounce this this First Nations name.
>> Sound it out. Go slowly. Sound it out.
What's the first letter?
>> I'm It's Solisums.
>> But it's got like three K's and two upside down U's. Um, Kumar. Uh, so anyways, go from Pacific Ocean down the West Coast through the Panama Canal through the Caribbean Atlantic over to Europe.
>> Yeah.
>> And then arriving at the German LG import terminal.
>> Cool.
>> That's a long way to go, man.
>> Yeah, but liqufied natural gas tankers are so cool. They burn their own fuel.
It's amazing. The condensate is they burn the condensate. Like anyways, it's freaking amazing. Just go Google.
>> Tell us more. No.
>> What's the science behind that, Rich?
>> No, you guys are not nice to me.
>> But remember, the most important thing was the Looney was right again because in 2022, the Trudeau government said there was no business case. Uh, and you know, it's funny, right? Because people like, well, you know, nobody could have predicted the wars. And it's like, well, there was always a there was always a there was always a risk. you know, anyone that was >> that's what business is. Let let the business community decide or >> instead of the government deciding.
>> Yeah. It's like it's not for this anyways. It's it's like let's not dwell on let's not cry over spilled milk. The point is I think we're going to see a lot more of these. I think that this is uh there's an inevitability to this.
Natural gas is like one of the is like is a really really important feed stock obviously to fertilizer ura all the stuff we talked about and as a fossil fuel I think it'll just be continue to be used all over the world. So, >> we're going to see I know you have your gripes, but this is this is good news.
>> This is good news. There's >> it's unequivocal.
>> Um, a change in direction. You know, anytime a guy like Steven Gilbo steps down, I have to assume that we're moving in the right direction. So, >> yeah, it's true.
>> Speaking of which, another thing the Looney was right on. Um, man, we should just have all these sound bites over the years. There's an article this week in the Global Mail. Tim Hortons who dial back use of temporary foreign worker program aims to hire 10,000 locally.
>> What?
>> I thought there was nobody there.
>> You can't say that online, Steve.
>> It's unbelievable.
>> So, what happened? There was more to it though, a little bit, right?
>> Uh it's just funny because they're trying to like obviously there's so much bad press I think around Tim Hortons these days. Uh their quote is quote, "We have not lobbyied the government since last year and we won't be lobbying them on >> five months ago.
>> We won't be lobbying them on TFWs anytime soon given our commitment to hire locally everywhere possible," says Duncan Fulton, chief corporate officer of restaurant brands, Tim Hortons. Well, it means that the all the bitching on Twitter and everything else is definitely they're definitely feeling it because >> he says at the end of the day, our owners would prefer to hire locally almost 100% of the time. It's >> such an obvious lie.
>> So, they they didn't prefer before.
Like, what? This is a really hard sale, guys. This is tough.
>> Yeah. It's also because I think I think Dunkin Donuts is apparently re-entering uh the Canadian market and there were some pretty funny uh memes.
>> Go for it.
>> This is a backstory.
>> I sat down once uh for a conversation with then immigration minister Mark Miller and we were chatting, you know, talking and I don't really know what the point of the conversation was to be honest. I think they were just trying to sort of get me on board with their their angling or you know trying to get me to be a supporter per se. But I remember him saying and always stick with me. He's like you know Canadians are complaining about their immigration and the numbers but he's like but everybody wants their cheap Tim Hortons.
>> Yeah, that's a fundamental misunderstanding.
>> And I always stuck out to me. I was like, "Ah." I was like, "Well, I mean, I suppose you're not wrong, but yeah, it's uh anyways, we know that uh that's the reality is I think they were one of the biggest abusers of that program."
And uh there we go. So, we have a an about face.
>> Yeah.
>> Last week, Tim Horton says announced plans to build 80 new locations by the end of 2027 and to renovate 400 in that same period. Uh the hiring campaign, which aims to create 10,000 new jobs, will take place through numerous local job fairs across the country. Uh so we'll see. We'll see.
>> Well, youth unemployment is at a 30-year high for if you if you normalize for participation rates. So, they've got they're going to have plenty of people to go work there and um and it'll be interesting, >> which is crazy because I don't know, they're like, "Oh, like like locals or Canadians don't want to work these jobs." I I I don't think that's true, man. And I think if you're like 16 years old and you're looking for your first job, like it's a very decent spot to start, >> of course. But also, no, but it's also I think if it's a shame Ben's not on this second because he Ben will tell us that there's it's to do with the Lima, the LM Lima program, and the way that it's structured where a lot of these workers are tied to that specific role. So if they're mistreated or whatever, like not only do they pay to get that job effectively, but they're like stra they're like, you know, tied to that role. So if you're a giant faceless corporation like Tim Dim Hortons, what would you rather have? A kid who could go away or a kid who can't, you know? I mean, so it's Yeah, there was there's a let's just put it this way. There's a lot of shenanigans going on in the immigration scheme. Um we we've chatted about it numerously. you know, the the the the fake diploma mill colleges, the immigration scandals where they're charging these people, these immigration consultants charging an arm and a leg, um, you know, pay me $50,000 and I'll get you a job set up and then, you know, meanwhile that job gets set up and then what happens is the employees end up the employers end up kicking a portion of that back to the immigration consultant um or or the worker does. So instead of getting paid $10, they're actually getting paid six because a chunk of it's going back to those consult. It's all just it was like this underground system that uh really has plagued our society.
>> So it's good news guys. We've now kind of you know changing direction a little bit again. So this is positive.
>> Yeah. You know I like to naively think the Luna h looney hours had a small say in it. I think so. I think so.
>> Well, our metadata is being tracked all the time, so that's for sure.
>> Check the group chat logs. Anyways, what else? Um, Rich, markets, I know we're getting close to wrapping up here, but >> we got to talk about it.
>> Maybe just give us your overall synopsis.
>> Well, it's just, you know, the markets just keep going higher and uh, you know, it's just, and yes, some people might say, well, it's not equal. It's not equivalent. Not every single sector is going up. Um but you know the S&P broad market which has been driven by technology specifically hardware continues to make basically new highs.
Um and it's just it's really quite remarkable. Um there's and you know now the question there's what's really fun and it just it's sparked it's sparking this like online debate. Um you know there's the the Mike Mike Bury what's his name? The guy from uh >> Mike Bur the big short guy. big short guy who's saying you know that that's a bubble. There's other people like the um a really really good analyst which I forget his name now but from Bank America Maril Lynch who you know publishes wonderful amazing part chart packs and he's sort of convinced that there's a bubble and of course there's other people who say nope this time is not is different and but nevertheless the S&P 500 continues to make new highs.
Markets in general are quite buoyant and it's it's interesting. So to that point, this is Keith. I kind of want to get your opinion on this. Like I think you see a lot of these guys like Michael Bur and obviously very smart, super successful, but like everybody like that continuously like keeps calling it a bubble. Like you look at the valuations, you're like, "Oh, there's a lot of signs that this is getting really frothy." But like again, if you exited, you know, eight months ago or or whatever, like you haven't participated. And so Keith, I kind of I guess my question is you is from like a portfolio management perspective, like how do you go about like sort of tiptoeing around this market? Like you obviously just I mean if you sold and went to cash, I mean you're getting obliterated today. Um so how do you how do you rationalize this?
>> I think it's just exactly what you said.
So a nonprofessional money manager, they're always thinking in absolutes.
You're all in or you're all out. Could you just reference I sold um now in into cash you know a professional manager you're going to manage your exposure so if anyone is concerned now that you know we we have this so-called bubble you know that everyone's referencing okay what do you do with this you know you you're you're slowly reducing your exposure so whatever percentage you have exposed to this market you know maybe you're taking off 1 or 2% every time you reach a new high and then over time, you know, you're able to reduce it, you know, maybe it's 10, 20, 30%. Like that that's what a professional would do in terms of like is it a bubble? Is it the top? A lot of like a lot of very successful money managers who've called tops in different markets, whether it's the equity world or gold world or crypto or real estate, you name it. You know, if if you look back even Michael Bur for example, you know, they're about two years early on it. And if you go back to say like the 99 2000 tech bubble, you know, people who were concerned then, you know, they were 15 18 months early as well. And for those 15 to 18 months for the professional, you know, they're sticking their neck out and, you know, they're reducing exposure. You know, they're getting it, you know, they're getting it from everywhere. and it's not fun for them. But then with hindsight after it happens, everyone's going to say, "Yeah, of course that was a bubble.
Everyone can see it. Everyone sold at the top." Which is a lie, of course, cuz no one sells at at the top. But it is one of these fascinating experiences right now. I think most people are aware there's a very small number of stocks that are really pulling everything else higher and then you know you have passive index flows are coming into the marketplace and by default the program is you buy like it has to buy so it's buying all of the stocks and because there's a higher waiting to these bigger stocks that keep getting reweed you know it's sort of self-fulfilling and you it keeps going until it so-called runs out of energy But then in between though you're you're getting these huge uh divergences between say like these bigname stocks and rich for example you shared with me this morning uh the consumer staple sector I think if you look at like the the mining sector energy sector commodity related and the discrepancy it's enormous of how much they diverge relative to where they should be. So if you start reversing that trade now, you know, maybe you're wrong the next 6 to 12 months, but over the next 5 to 10 years, you look back on the chart and say, "Wow, what a great timing move that was." And as as a professional manager, you're looking for extremes in markets. And again, you're never going to get the call perfect on the top or the bottom. If you're, you know, if you're early by two years, it's it's not a big deal. But because a professional is not going to go all in or all out, you know, you're going to control it.
>> So to that point, there's been like a conversation this week around the Canada Pension Plan.
Uh there's an article written in the global mail by Andrew Coin basically saying that um CPP Canada pension plan has uh spent more than 50 billion over 20 years to lose about a hundred billion relative to what it might have earned for an equal amount of risk had it just bought relevant index indexes.
And so I'm kind of curious your perspective on this because we had an internal debate in the Looney Hour group chat there and and I I know your perspective but maybe you can share with the audience. I think it was sort of I think there's a misconception amongst the general public about the CPP and how they should be managing money like obviously Keith I mean should the CPP just be buying broad indexes?
>> Well the answer to that is no because it's because a lot of markets you want to invest in it doesn't have an index.
So we'll talk about that. Uh that Globe and Mail article, you know, it was I think I I share with you guys, it's positive that the conversation's been introduced. There were some correct statements in the article and then some incorrect statements as well. And then to sort of, you know, overlay on top of all of this, the the institutional pension fund industry, it's a blob. It is an enormous blob. you have to be a part of the uh the group to participate in it and the blob gets bigger and fatter every year because every time you get a paycheck up you know 5% 8 10% of your paycheck is going into it and there there's is an enormous amount of money the pie is big and everyone's taking a little piece like the bonfire or the vanities you know book from back in is it 80s I think like with the bond market you take a little piece of crumb all the and it adds up. Um, so there is is a lot of incentive for the group to stick together with a lot of things. I don't know if the reference that the article u will reference I think you mentioned like uh 8515 was that what it was rich for equities fixed income.
>> No, no, no, no. I had way more fixed income than that. It >> it was something weird when I read it and I didn't go back to research to see whether this is correct or not. Um but a pension fund it it's going like for example you're investing in infrastructure.
>> Yes that's you're in all kinds of private markets where there's no benchmark to reallocate that towards. So it's not correct that for just make a blanket statement they were better off if they just bought index and and the other thing yeah just may just finish for a second here and um the the other interesting thing I'll share know the story with you. So, back in the uh '90s, I worked for one of the big banks here in Canada back then and uh we had a US equity fund we're using for our private clients at the time. So, it was late '9s and the performance wasn't awesome. So, Rich, it was not keeping up with the S&P 500, sort of similar what's going on today. like it was always lagging behind and each week this would go on and then months you know clients are not happy because they're seeing shares of Cisco systems go higher and and stuff and we're not participating cuz he was way behind this benchmark. So they they sit the manager down in in the guy who's in Toronto at the time say, "Hey, what's going on here? You're lagging your benchmark." Anyway, they come to the agreement that to fix this, do you know what they did, Steve?
They could have fired the guy to hire a new manager to manage towards the S&P 500, or they went with plan B, which was rich. They just simply changed the benchmark. So instead of using the S&P 500, they changed this benchmark to the S&P 400, which is more midcap stocks. So all of a sudden then the performance looked really good.
>> So I share this story because this is kind of what the Canada pension plan just did. They retroactively change the benchmark to show actually yeah, we're doing well right now. Um but again, I just want everyone to understand like I'm not in support of it or I'm not supporting it. It's it's a bit more complicated, but make no mistake, this is a giant blob. Um, we are not inside that blob. I wish we were because it would be, you know, make a lot more make a lot more money. Of course, >> make more money.
>> We'd have to pedal ESG if we'd make more money. We'd have to pedal ESG if we're in the blob.
>> Yeah, absolutely. And again, it's it's it's a bit more complicated than what that article everyone's not bad and everyone's not good in in that world.
It's a bit it's a bit different. My only two my only two cents quickly is just that if in if they had done let's say like we had a little time machine or like so like a counter you know the counterfactuals if imagine if we had gone back done exactly as Andrew coin in the article has suggested and it was down 20%. they'd be be crying bloody murder. You know what I mean? So, in a way, these p these pension pens can never win. You know, if if they index everything and they did super well, then then they'd be like, "Oh, why are we paying you millions of dollars a year to manage it?" And if they index, then they did really really poorly and they'd say, "Well, you're fired." So, but another critique of this, again, I call it the blob. um all across Canada there's a whole bunch of pension fund money you know for provinces you know your big city you live in the teachers union you know the hospital group you name it and uh so I'm talking tens of billions of dollars you know for each plan uh and even at 10 billion like that's not considered a big plan sometimes but what what I what me and my my friends we talk about all the time usually the person who's in charge of that plan because of the way the compensation system works. I mean, they're usually making seven figures or more, but they're taking on no market risk whatsoever. They're not managing any money. It's all about policy. Are they meeting this requirement in that requirement? Whereas someone who's managing money, you know, you have market exposure, of course, you have client risk, you have performance risk, you know, money coming in and out. Um, so again, the name of the game in in the pension world, um, you know, you know what the rules are. You stay within stay within the, uh, what you call it, Rich, your your sidelines or stay in your lane.
>> Yeah. Stay within in the lane. So, if you have if you're if you're in charge of a big pension fund and you have a big allocation to say it's Goldman Sachs, which everyone is aware of, for example, and Goldman Sachs does incredibly poor.
Does it matter why it just happened? Are you getting fired, Steve?
>> No.
>> No. No. Because your money is with Goldman Sachs, right? Yeah.
>> If you have it with like a little small firm from like Owen Sound or something and they don't do very well, are you getting fired?
>> Yes.
>> Yes. Absolutely. So, there's a lot of stuff. So, again, for that article to come out from the Global Mail Guy, uh, right away I'm saying to myself, well, he's not part of the blob. he's not getting paid for or he wouldn't have come out with that kind of an article.
>> Yeah. Just to summarize, so the the CPP um sort of benchmarks against an 8515 portfolio, so 85% global equities and 15% government bonds. Uh and it goes on to basically say that if you sort of zoom out further back, uh over a 10-year period, the fund CPP has earned an average of 8.8% annually, 8.8. Uh but that 8515 portfolio has earned 10.7%.
So nearly two full percentage points more on average every year. Uh meanwhile the blob um is obviously charging what's the salary is is enormous rich. I think it's like hundreds of millions of dollars. Now >> they're extremely well compensated at the CP >> but that 8515 allocation. Again I haven't looked at the CPP portfolio overall. I'd be shocked if they're even close to 8550.
>> No, they're not. They have a huge private equity like component like a real estate component. They have a huge uh private >> infrastructure is is going to be in there as well. You have CTA, you know, trading strategies that are uncorrelated to to stuff.
>> It's not the appropriate benchmark that that's what I'm >> the issue I don't disagree with you. The issue that the the article has sort of brought up is they say, well, okay, you know, over the last, for example, 10 years, they've underperformed these index. you kind of have just bought it passively. It hardly cost you any money.
And they're saying that basically the CPP uh they've gone from around 150 employees in 2006, 150 employees uh to more than 2,000 employees today.
Personnel costs now total over 1.2 billion or on average more than $570,000 per employee. Um total costs including operating expenses and management fees now exceed 5.4 4 billion. 20 years ago they were 54 million. So that's the case is that they're making of is that the blob has gotten so big. And is the blob performing?
>> That that's a fair criticism outside of the performance. I think that's an totally totally fair criticism. I think with all the technology, the account management software, the yes the ETFs, yes these thing like I think that is a completely I don't think you need 2,000 people to run that thing. I I mean I don't know much about it, but come on.
>> I think you need three guys with a shovel. That's it.
>> One one other comment though. I don't think it's Again, I'm not trying to pick one side of the other here because it, you know, it doesn't really bother me really. Um because it's a fight you're not going to win. But I don't think it's fair though to just just to quote the absolute dollar amount for expenses and fees. You do have to use it as a percentage of of the assets.
>> Yeah.
>> And a lot of these funds are hyperfocused on >> well is it eight basis points in total or 14 or or 15 you they will come up with that. Um and this stuff's going to move in cycles. You know I bet you 5 years from now they'll you know use the rear view mirror and go back and say oh actually we were going to go back. So if I'm an investment manager right now, um would I want to change from an 8515 benchmark with 15 in global government bonds? You're going to say that's what I have to beat. I'm going to say absolutely. I'll tell take that. So I think they're changing at at the wrong time truthfully.
>> Okay.
>> Yeah.
>> All right. Well, we'll uh we'll check back in in 10 years and see where things are at. But uh as always guys, we hopefully you got some value and entertainment out of that episode. If you did, all we ask that you share this episode with at least uh one friend or family member and help us continue to build the Looney Hour community. Looking forward to seeing a lot of you in Toronto on June 3rd. Uh it's going to be a great time as it always is and uh we'll see you next week.
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