BC Distracted Driving Law vs UBER & Canada’s Digital Services Tax
Imagine being penalized for a simple screen touch while trying to make a living. Michael Mulligan of Mulligan Defence Lawyers joins us to unravel the outdated distracted driving laws that put gig economy drivers in a bind. Our conversation sheds light on how these regulations, which only permit screen interactions for phone calls, fail to consider today’s work environment for gig workers like Uber Eats drivers. We highlight a noteworthy case where a driver was convicted for accepting a delivery, underscoring the urgent need for legislative reform. You’ll also hear about some amusing quirks in the law, like the allowances for CB radio microphones, which highlight the disconnect between current laws and modern work practices.
Switching focus to international trade, we explore the strategic dimensions of Canada’s Digital Services Tax Act. This 3% levy on Canadian revenues of major US tech firms, such as Facebook and Amazon, is not just a tax—it’s a diplomatic tool. We examine how this legislation fits into the larger geopolitical puzzle, especially in light of past US tariff threats. Conversations veer into the fascinating implications of raising the tax rate, arguing that these companies could still find profitability despite a higher levy. Moreover, we look at how other nations might follow suit, using similar measures to navigate trade tensions with the United States.
Legally Speaking with Michael Mulligan is live on CFAX 1070 every Thursday at 10:30 a.m. It’s also available on Apple Podcasts or wherever you get your podcasts.
Legally Speaking Jan 23 2025
Adam Stirling [00:00:00] Legally Speaking with Michael Mulligan from Mulligan Defence Lawyers. Morning, Michael. How are we doing you?
Michael T. Mulligan [00:00:05] Good morning. I’m doing great. Always good to be here.
Adam Stirling [00:00:07] Some really interesting items on the agenda. I know this is one I’ve always thought about and I’m glad that we have to get to have the conversation today. It’s the gig economy and Uber Eats Driver convicted for touching his screen to accept a delivery. How did distracted driving rules work around this practice?
Michael T. Mulligan [00:00:26] Well, the problem is that the legislation is just out of date and doesn’t accord with modern reality and what people might be touching their phone for. The background of this particular case is an appeal decision from traffic court. And the background is that a police officer said that he saw a man touching his screen and the officer said twice, although the man at trial in traffic court testified that he’d only touched the screen once and the judge believed him. It preferred his evidence, the evidence of the police officer and the JP in traffic court, Justice of the Peace or Judicial Justice acquitted the man on the basis that he had only touched the screen once. Now, after he did that, the police officer who was there, there’s no crown counsel in traffic courts or say, well, hold on, hold on, you haven’t heard my submissions. You can only touch the screen to answer a phone call.
Adam Stirling [00:01:24] hmm.
Michael T. Mulligan [00:01:24] And the JP said, well, too bad he’s acquitted. The crown appealed that. And the judge, the Supreme Court judge who’s hears, heard the appeal, found that the police officer was right, and the police officer is right. The problem is that the legislation just doesn’t contemplate things like delivery apps. And the way the legislation works is that it prohibits people from using or holding in a position that could be used, an electronic device. It does it in very broad language and then provides for the regulations to be made of regulations or like rules made by cabinet, basically the government, that sort of provides more detail for how legislation is to work. And there are some exceptions settled in those regulations. And the exceptions include what amounts to allowing you to, as long as various other requirements are met, like the phone has to be installed in accordance with the regulations like firmly affixed to something. So it’s not like falling on the ground and you’re not rummaging through your seat for your phone or securely on somebody’s body. Then allows people, as long as they have their full licence, that it doesn’t apply to people with their ‘N’ or ‘L’ to touch the screen wants to like answer or to initiate the call or to answer the call by voice. It’s considered like the answer phone or something and it picks up.
Adam Stirling [00:02:56] Yeah.
Michael T. Mulligan [00:02:57] The trouble is, that’s the only reason you can touch the screen once the one touch rule only applies to phone calls, nothing else. And so that’s the reason why this legislation is just out of date with modern reality. What it means is that every single Uber driver is committing an offence when they touch the screen to accept a delivery.
Adam Stirling [00:03:26] Yeah.
Michael T. Mulligan [00:03:27] And that’s how it works. And the judge in this case said that is how it works. There was evidence from this driver.
Adam Stirling [00:03:32] Yeah.
Michael T. Mulligan [00:03:33] The thing would pop up saying, hey, will you accept this delivery from McDonald’s or wherever? Right. Here’s where it’s coming from. And the driver has to take such. Yes. If they don’t touch. Yes. Within five seconds, it goes on to the next possible Uber delivery driver or Uber driver.
Adam Stirling [00:03:48] Yeah.
Michael T. Mulligan [00:03:49] And so effectively, the way the regulations are currently written makes it impossible for somebody who’s an Uber driver or likely in some cases, taxi drivers to do a job without constantly committing an offence under the motor vehicle act. And the judge on the appeal pointed out that the driver found to be very credible that he was trying to do his job as safely as he could. Found that the legislation simply doesn’t permit one touch for any purpose other than a phone call answering and said quite correctly, this is the judge. “I am required to uphold the law as it’s written.” And so that’s true.
Adam Stirling [00:04:30] Yeah.
Michael T. Mulligan [00:04:30] It’s not a judge’s job to fix legislation which is out of date or causes people to be doing, you know, be convicted of things. And I should say this really matters because if you wind up with two of these convictions, if you’re touching your phone twice, which may while happen if you’re an Uber delivery driver driving around all the time.
Adam Stirling [00:04:48] Yeah.
Michael T. Mulligan [00:04:48] You’re driving licence is prohibited, you’re going to be prohibited from driving and therefore unemployed.
Adam Stirling [00:04:56] Hmm.
Michael T. Mulligan [00:04:56] And we’ve seen in B.C. the NDP government saying. Yes, we’re very concerned about delivery drivers and in, before the election, adding effectively a higher minimum wage for them. They are now paid, it’s mandatory something in excess of 20 bucks an hour doing that work.
Adam Stirling [00:05:11] Yeah.
Adam Stirling [00:05:12] There are. And so they possess to have considerable people in that gig economy. But by leaving this legislation the way it is, it means that they simply can’t perform their job without violating the Motor Vehicle Act. And hopefully somebody is listening to this, it wouldn’t take much to fix. It would be an amendment to a regulation. We don’t even need to call the legislature back into session, which they seemed not to want to do.
Adam Stirling [00:05:37] No.
Michael T. Mulligan [00:05:37] This can simply be done by a change to the regulation. I am the judge who heard this appeal was very clear that this was unfair. The judge just can’t fix it. Right? It’s not the judge’s job, I should say. There are some other amusing exceptions that are in there. Give you some idea of the age of this thing. Like there’s an exception in here for using hand microphones.
Adam Stirling [00:05:58] hmm.
Michael T. Mulligan [00:05:58] Which is like a CB microphone it’s got to be a.
Adam Stirling [00:06:01] Oh, yeah, yeah.
Michael T. Mulligan [00:06:02] microphone which can only transmit or receive at one time. So if you want to be holding your CB mic, talking to your good buddy in the other truck, that’s the exception for those hand microphones. Also, they’ve worked in exceptions in the legislation itself. They exempt things like police.
Adam Stirling [00:06:19] Yes.
Michael T. Mulligan [00:06:19] And fire personnel. Police are constantly typing on their computer in their car.
Adam Stirling [00:06:23] Yeah.
Michael T. Mulligan [00:06:23] They have a full laptop set up mounted in their car, which, you know, they need. Dispatches come up on that. They’re typing things or typing a license plate number. Searching for people’s names, typing, literally typing as they’re driving down the road.
Adam Stirling [00:06:37] Yeah.
Michael T. Mulligan [00:06:37] You know, they realise that, you know, we exempted that. They realised, I guess after the legislation passed, other people should be exempted. They exempted various other sort of similar people, sheriffs and so on that might not have been captured there. But this whole thing just cries out for some modernisation. And at the very least, if you’re allowing somebody to touch the screen once, which certainly seems less distracting than holding a microphone or typing away with one hand, as you’re driving your police car down the road or something.
Adam Stirling [00:07:08] Yeah.
Michael T. Mulligan [00:07:09] It certainly seems reasonable to expand the permission to touch the screen once of a securely mounted phone to accept your delivery order. And we shouldn’t be putting these people in jeopardy of delivery drivers of being convicted, and having their driver’s license prohibited and becoming unemployed because the legislation is 20 years out to date. So hopefully that’s listened to. It’s a very clear message from the judge. And this is a quick fix. It should be fixed because the current state of affairs is just completely unfair.
Adam Stirling [00:07:38] I’m just thinking it means the entire business model is probably unviable on the text of the law because you mentioned if a driver fails to accept that offer of a delivery within five seconds or something similar goes to another driver, I suppose the legal response would be that when the driver sees that offer being made that they should pull over and I guess stop the car to accept the order. But that would probably take more than five seconds to do safely. So they would lose.
Michael T. Mulligan [00:08:03] Correct.
Adam Stirling [00:08:03] So that would go to the next driver who would then try to pull over and then lose it while trying to pull over. And it would go to the next driver who would lose it while trying to pull over. So if we had lawful operation of a motor vehicle, this entire business model ceases to function.
Michael T. Mulligan [00:08:15] Yeah, it just it just doesn’t accord with modern reality. The legislation is out of date. You know, there’s a good reason we don’t want people typing only on their phones, driving on the road and so on. Right. But the idea of a securely mounted phone and that’s also a requirement, by the way.
Adam Stirling [00:08:29] Yeah.
Michael T. Mulligan [00:08:29] You know, if you have your phone just like sitting on the seat next to you or something, you cannot touch it even once to answer the phone. Right. That’s important to know. So it’s got to be securely mounted to your body. Like I guess you’ve got it strapped onto your wrist or arm or something. Or securely mounted to the car. And the idea there is you don’t want something. You don’t want the thing flying around the cabin or somebody struggling to find the thing. So that’s understandable, right?
Adam Stirling [00:08:52] Yeah.
Michael T. Mulligan [00:08:52] But whether you’re touching, you want to answer the phone or wants to accept your delivery, we just shouldn’t have a state of affairs where one of those people is just required to commit an offence to do their job. I mean, you may have people that lie about, guess that’s going to be a prosecutorial probe. Why did you touch it once I was answering the phone. Well, good luck to you. This fellow, the judge, by the way, was extremely credible. The reason why there was clear evidence of why he touched it once was that he testified and explained that he touched it to accept the thing and explained that he only had five seconds. And I guess that’s going to create another danger if you want to have Uber drivers, taxi drivers and so on, slamming on their brakes.
Adam Stirling [00:09:31] Exactly, yeah.
Michael T. Mulligan [00:09:31] At the side of the road, that’s great.
Adam Stirling [00:09:34] Yeah.
Michael T. Mulligan [00:09:34] You know, and you’ve accepted, but it’s safe to touch the phone. Once you answer the phone call, then you’re talking this you’re just clicking and touching at once.
Adam Stirling [00:09:41] Yep.
Michael T. Mulligan [00:09:41] So you’ll be very easy. Just delete the requirement that the single touch before the purpose of a phone call still requires it to be mounted. It doesn’t decrease safety in any way. Right. We’re allowing that phrase; you can do that exact same action in exactly the same way for a different purpose. Lawfully.
Adam Stirling [00:09:59] Yeah.
Michael T. Mulligan [00:10:00] And so this just needs to be fixed. That wouldn’t take much. And it’s because that’s going to affect thousands of people every day. And it’s just really unfair that it stays the way it does. There’s been a clear message sent from the judiciary and hopefully the government does its duty and gets this up to date. So people are losing their employment for trying to touch the screen, once to accept their delivery, which they could lawfully do if they’re making a phone call. So it seems like an easy fix.
Adam Stirling [00:10:24] All right. We’ll take our first break here. Michael Mulligan with Mulligan Defence Lawyers, Legally Speaking, will continue right after this.
[00:10:31] COMMERCIAL.
Michael T. Mulligan [00:10:31] All right. We are back on the air here at CFAX 1070, Michael Mulligan for Mulligan Defence Lawyers as we continue our agenda for today. Up next, Michael says digital services tax and Trump, Canada’s Digital Services Tax Act. What’s the story?
Michael T. Mulligan [00:10:45] So this is the interesting thing, both from the context of the current threats by Donald Trump to impose tariffs on exports to the United States from Canada. And it reveals what another potential response by Canada would be to that, which, like what we talked about previously, the reduction in U.S. patent and intellectual property protection would have the advantage of raising money for Canada while imposing disproportionate pain on U.S. companies. I should say, on the issue of patent protection, there was a good editorial in The Globe and Mail yesterday by Richard Gold as a professor from McGill, advocating for that as a response and explaining the provisions of the Canada Patent Act that would allow the Canadian government to respond to U.S. tariffs in that way, saving potentially huge sums of money for Canada while, punishing the United States to the tune of billions of dollars. This is another interesting approach, and I should say this Canadian piece of legislation, the Digital Services Tax Act, was one of the things that was referenced in the various documents you might have see Trump signing various executive orders. On his first day, he was so concerned about it. He was in that ordering the Treasury and Commerce Departments to examine extraterritorial taxes imposed on U.S. companies.
Adam Stirling [00:12:17] hmm.
Michael T. Mulligan [00:12:17] Which would be list from his perspective. I must say that’s an interesting thing given as well that Trump is proposing setting up a department of external revenue to try to collect money from other countries to pay U.S. bills.
Adam Stirling [00:12:30] Yeah.
Michael T. Mulligan [00:12:30] But that aside, here’s what that is. So this was a new piece of legislation passed by Canada in June of 2024, and it came into effect order in council June 28th, 2024. And what it does is it imposes a 3% tax on digital service revenue exceeding $20 million per year earned in Canada. The idea is this, and I should say it only applies to very large companies like companies that have a global revenue from all sources in excess of €750 million. Is basically this is a tax on X, Facebook, Amazon, and other large U.S. companies. That’s really what it amounts to.
Adam Stirling [00:13:15] hmm.
Michael T. Mulligan [00:13:16] And the idea there is that it would be a 3% tax on revenue. They’re earning some activity in Canada. So, for example, things like many of those services, Facebook, and others, may not even charge a fee, but they would have things like online advertising, social media platform of online advertising. They make money by selling your personal information for advertising. Really, as they say, you know, you’re not the customer. You are the product. You’re using some of those things. Right. And also online marketplaces like eBay, Amazon, all of those things. And it requires those large companies that are making money from Canada to register and then pay this 3% tax on what they’re making from those sources of revenue in Canada, causing the U.S. to have a bit of a coniption; Biden was too. Because at the moment that’s not taxed by Canada. So if you have, you know, Facebook or X or any of those things making money on advertising in Canada, the U.S. gets to collect all of the tax revenue Canada gets none, which they don’t like. And so, first of all, it sounds like this may be one of the really serious points of contention that may be leading to Trump’s, you know, tirades about how they’re subsidising Canada. But the flip side of that is that if Trump does impose tariffs like the removal of patent protection and intellectual property protection for U.S. companies, this will be another opportunity for Canada to extract disproportionate pain on the United States without adding costs to Canadians, which is what a reciprocal tariff does. The tariff is just taxing your own people for things they’re buying elsewhere.
Adam Stirling [00:14:59] Yeah.
Michael T. Mulligan [00:14:59] I mean, the sellers don’t like that. You’re just taxing your own people. And we’re a small country in relation to the U.S. so taxing our own people and us stuff is probably not going to be too effective.
Adam Stirling [00:15:08] Indeed.
Michael T. Mulligan [00:15:08] This kind of thing would be. And so this is currently at the rate of 3%. And bearing in mind that the marginal cost of providing an online service like Facebook or X or eBay or various things, so the next marginal customer, the cost of providing that service is next to zero. Right. It’s one of the reasons why that and you know, software is such a good business. Once you make something, you can just sell as many copies of it or have as many users as you want. Each additional user costs next to nothing.
Adam Stirling [00:15:38] Yeah.
Michael T. Mulligan [00:15:38] But it’s profitable now.
Adam Stirling [00:15:42] yep.
Michael T. Mulligan [00:15:43] It’s currently 3% of the rate of this tax. Seems to me you could raise this to, let’s say, 75% of the profit made by any those companies in Canada, you’ll still leave them 25%. And when your cost of producing the service is zero, effectively, the marginal cost of another Facebook user is almost zero. A rational company would continue to offer the services 25% better than 0%, which would be their alternative.
Adam Stirling [00:16:08] Yeah.
Michael T. Mulligan [00:16:08] And so this is another opportunity for Canada to respond if there isn’t some agreement reached in addition to, you know, no Patent protection, generic drugs cheaply and all of that. This piece of legislation, the rate of tax on what amounts to these large U.S. companies to go from 3% to pick your number, whatever the highest number is, that wouldn’t cause the company to think rationally, I’m going to start providing services in Canada to the extent you care about that. Do you think it’s important that we have Facebook access here? You probably wouldn’t want to put it at 100% because a company would rationally stop providing service. Why would they bother?
Adam Stirling [00:16:46] Yeah.
Michael T. Mulligan [00:16:48] But you could raise this to, you know, extract virtually all of the profits from U.S. Companies. And it would be you can just imagine what the response would be amongst the, you know, cadre of people, if you watch the US inauguration, these sort of tech billionaires lined up at the inauguration, you could just imagine the response from, you know, Mark Zuckerberg or somebody.
Adam Stirling [00:17:12] Yes.
Michael T. Mulligan [00:17:12] The effective rate of tax for all money earned in Canada is going to be 75%. And maybe other companies would like it, or other countries would like it to, maybe if you’re the U.K. or you’re the EU and you want to respond to U.S. terrorist threats without costing your people more. Maybe you’ll just extract virtually all of the profit made by those large U.S. companies. And it’s just a great example of how a smaller country can use this sort of smart, leveraged approach. And rather than punishing yourself to get at your opponent, you could do things which are very advantageous to you. Lots of extra tax revenue in Canada, devastating to the other country and companies there, and something which you can just do entirely domestically. And there it is. You can just imagine what the response would be, much like the immediate and swift response of every company in the United States that has any intellectual property, which is frankly much of what the U.S. exports. You know, one of the US concerns is that their manufacturing is modest. Many things which are U.S. products or U.S. companies are not, in fact, manufactured in the U.S. at all. And what the U.S. is selling amounts to intellectual property, copyrights, and permission to do something, copies of software and so on. And so the U.S. is very vulnerable to this. And the value of U.S. companies much of their exports, Apple computers is not making anything in the United States. All of the physical stuff is coming from elsewhere.
Adam Stirling [00:18:53] Yeah.
Michael T. Mulligan [00:18:53] Really, what they’re selling is their copyright. You know, Nike. Nike, who doesn’t have a single factory? All they have is a design and the ability to extract money from that sort of intellectual property. Your brand.
Adam Stirling [00:19:07] Yeah.
Michael T. Mulligan [00:19:08] And if you just take that away, they’re not worth anything. I mean, there was something in terms of what they can sell in the United States, but as anyone can just put a swoosh on their shoes and anyone can, you know, brand their product wherever you want. Many U.S. companies have really very little value. And so it just is a really great opportunity. This is well to keep in mind and hopefully our response, if it comes to that, isn’t just a knee jerk. Well, I’m going a dollar-for-dollar tax or people to just show those Americans, how expensive we can make orange juice or breakfast cereal, the orange juice, the breakfast cereal people don’t like it but hardly bringing them to their knees. This sort of thing could bring them to their knees. So that’s the digital services tax. It’s front and centre and if nothing can be negotiated, hopefully we consider this. As well as one of the responses to punish Trump in the U.S. to what the proposed.
Adam Stirling [00:20:04] Michael Mulligan with Mulligan Defence Lawyers. Legally speaking, during the second half of our second hour every Thursday. Michael, out of time. A pleasure as always.
Michael T. Mulligan [00:20:11] Thank you so much. Have a great day. All right.
Adam Stirling [00:20:13] You, too.
Automatically Transcribed on Jan 30, 2024 – MULLIGAN DEFENCE LAWYERS