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Olympic women’s boxing match lasts 46 seconds after male competitor lands heavy blow

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From LifeSiteNews

In a disgraceful display at the 2024 Paris Olympics, an Algerian man named Imane Khelif, who calls himself a woman, defeated Italian woman Angela Carini in a boxing match in the women’s 66-kilogram weight class after Carini abandoned the fight in just 46 seconds following a substantial blow to the head.

Video footage of the Thursday match shows Khelif, a 25-year-old man, striking Carini, a 25-year-old woman, hard in the jaw to start the lopsided fight.

Following the heavy blow, Carini landed a counter-strike on the male Khelif, at which point he appeared to complain to the referee, motioning to the back of his head. The fight concluded after just 46 seconds, with Carini abandoning the match and appearing to refuse to shake the man’s hand after he was absurdly declared the victor.

Following the match, a previous interview with Carini began to be shared online. In the pre-Olympics interview, Carini, through tears, talked about her dedication to training and the role her late father played in helping her persevere in competition.

https://x.com/i/status/1819002043836571776

Despite Khelif being male, the Olympics Committee ignored biological reality and approved him, along with a Taiwanese man, to be allowed to compete in the women’s boxing division based on his false assertion that he is female. In fact, Khelif was one of a number of men who had been previously disqualified from female competition by the International Boxing Association (IBA), after president Umar Kremley announced Khelif and others had failed “a series of DNA-tests” and “were trying to fool their colleagues and pretend to be women.” 

The match between Khelif and Carini quickly drew backlash online.

“Inclusion. Brought to you by the International Olympic Committee,” sarcastically quipped American female athlete Riley Gaines, who is known for her opposition to men in female sports.

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Crime

Project Sleeping Giant: Inside the Chinese Mercantile Machine Linking Beijing’s Underground Banks and the Sinaloa Cartel

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U.S. surveillance image shows one of Sai Zhang’s top lieutenants crossing into Mexico with a money courier for the Sinaloa cartel. The photo revealed critical ties between Zhang’s transnational money laundering and drug trafficking operation and one of North America’s dominant fentanyl distributors.

Sam Cooper's avatar Sam Cooper

Former senior DEA official describes covert global financial ecosystem tying Chinese students, Sinaloa fentanyl sales, cartel cash collection, and PRC state-linked infrastructure deals.

In January 2021, a grainy black-and-white surveillance photo quietly accelerated one of the most consequential geopolitical investigations in recent times — a case with influence over border security, trade policy, and tariff disputes shaping our era.

Captured at the U.S.-Mexico border, the image showed a thick-set Chinese man wearing a COVID-era face mask driving alongside a Mexican man — a key money launderer for the Sinaloa cartel. The Chinese man turned out to be a senior operative working for Sai Zhang, a younger Chinese international student living in the United States on a student visa.

To a small group of U.S. federal agents, the photo revealed a thread they had been painstakingly unraveling since 2018, part of an ongoing investigation known as Project Sleeping Giant.

The overarching task force, launched by senior DEA agent Don Im — whose career was built on decoding China’s paramount role in global money laundering and supply of chemicals used to produce methamphetamine and fentanyl — aimed to bring cases against Latin cartels working with Chinese money launderers.

This photo was the first concrete step toward proving a direct, operational bridge between Chinese underground banking networks and the blood-soaked heart of Mexico’s most notorious cartel.

While evidence of Sai Zhang’s commanding role in orchestrating Sinaloa fentanyl cash flows was stunning, the involvement of Chinese student networks followed its own curious logic, Im explained in an interview.

“Chinese banking networks were operating in the U.S. long before Zhang linked up with the Sinaloa cartel,” Im said, describing the system in which Chinese buyers bid on pools of drug cash collected in cities worldwide, paying a premium to receive laundered dollars in American locations and investments of their choosing. “The buyers were mostly wealthy Chinese seeking dollars for real estate or tuition in America. Payments were made in yuan through Chinese accounts. In return, Mexican cartels received goods or cash.”

In exclusive interviews, Im revealed in unprecedented details the breathtaking complexity of China’s global drug money laundering networks — a system of Byzantine paths that Sleeping Giant helped map and penetrate. The troubling implications help explain why Washington is now imposing trade sanctions targeting China and countries deeply entwined with its export-driven economy.

At the heart of it, Beijing’s centralized economic apparatus and the Chinese Communist Party’s regional governors knowingly align with global drug barons — channeling fentanyl cash, reintegrating it into China’s factory output, and exporting drug-funded “legitimate” goods worldwide. Meanwhile, Chinese immigrants and travelers access the other side of this narco-banking system, using it to bankroll overseas investments and strengthen the reach of the Chinese diaspora.

It is a system that works for China’s government and citizens alike — on the micro level, it pays for tuition and housing for Chinese students in America; on the macro level, it helps fund Xi Jinping’s Belt and Road infrastructure projects abroad, designed to bind other states more closely to China through trade, debt, and ultimately elite corruption. According to Im, the chemical precursors fueling the production of fentanyl, methamphetamine, and ecstasy in parts of Europe — as well as in countries like Canada and Mexico — are woven into this Belt and Road system.

“Their Belt and Road Initiative is now in over a hundred-and-some-odd countries — with ports, airports, shipping lanes, roads, highways, trains. And all of China’s precursor chemicals are being offloaded,” Im said. “Right now, China’s economy is in dire straits, and they’re looking for capital to pay off debt, fund projects, make investments, or transfer wealth out of China. And that’s huge business. It involves provincial authorities engaged in various organized crime activities, including bribery, intimidation, kickbacks, and providing tariff breaks to known illicit drug and chemical suppliers.”

Don Im has testified on these findings before Congress, and related U.S. government investigations have shown that Beijing provides tax incentives to fentanyl factories.

As Sleeping Giant revealed, a critical cog in Beijing’s Trojan horse system is the Chinese student visitor — exemplified by figures like Sai Zhang.

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The Student Banker

Sai Zhang arrived in the United States on a student visa. By the late 2010s, he had quietly transformed himself into a key broker in a vast underground banking network centered in Southern California. His customers were wealthy Chinese nationals circumventing Beijing’s strict $50,000 annual foreign exchange cap.

Zhang’s operation was deceptively elegant. He tapped into the surplus of U.S. dollars held by Mexican drug cartels from opioid-ravaged eastern states such as North Carolina to cartel-influenced streets in Los Angeles. The Sinaloa drug barons, flush with cash from fentanyl, meth, and cocaine sales, needed a discreet and cost-effective way to convert their U.S. dollar profits back into pesos in Mexico.

Zhang’s network — as is true for all Chinese money brokers — clipped both sides of the ticket, offering direct or indirect services to Mexican cartels, Chinese factory producers, Chinese diaspora retailers across Europe and the western hemisphere who sell Chinese goods, and Chinese citizens seeking to import their yuan-denominated wealth, receiving non-traditional banking payouts in American cities.

So Zhang bought the Sinaloa cartel’s fentanyl cash dollars at a discount, resold them at a premium to Chinese buyers, and closed a loop that turned violent, street-level drug cash into fuel for China’s GDP.

But for U.S. prosecutors working alongside DEA street teams, what had long been known by detectives since the landmark case of Mexican-Chinese methamphetamine baron Zhenli Ye Gon—that is, the deep integration between Chinese and Mexican narco networks—still had to be painstakingly proven in court.

For Sai Zhang, this meant cutting through a labyrinth of protective layers carefully constructed to shield elite money brokers from exposure.

As described in voluminous U.S. court records—and corroborated in detail by Don Im—Zhang relied on a sophisticated chain of cash couriers, brokers, and money mules to keep himself insulated from street-level narcotics transactions. DEA surveillance teams tracked network operators to numerous cash stash houses and clandestine parking lot exchanges, often coming tantalizingly close yet narrowly missing opportunities to link Zhang’s cash directly to drug shipments.

One example is detailed in the affidavit of lead investigator Steven Gonzales. Surveillance teams tracked Xuanyi Mu and Hang Su from the “Naomi Avenue” stash house in Arcadia to a parking lot, where they met Elizabeth Sevilla-Mendoza, a known narcotics courier. Su collected an orange tote bag from her before returning to her black Mercedes-Benz. Officers then directed a traffic stop and deployed a K-9 unit, which alerted to the scent of narcotics on the bag. Inside, agents discovered $34,000 in foil-wrapped cash, neatly stacked and bound with rubber bands.

But within 48 hours of seizing this cash, Zhang’s team shut down the Arcadia stash house, leaving DEA investigators without the drug seizure they needed and cutting off a valuable surveillance node.

The first major break came on October 18, 2022. Acting on a tip from DEA agents in Charlotte, North Carolina, investigators in California zeroed in on a supermarket parking lot in San Gabriel. A wiretap on a Chinese suspected narco in North Carolina named “Mimi” indicated that Sai Zhang had arranged to pick up a $300,000 drug cash payment outside the San Gabriel grocery. Hours later officers watched as a woman in a sleek blue Maserati leaned out and took a black bag — containing about $300,000 in cash — from the driver of a white Ram truck, a Hispanic man.

Gonzalez was well prepared, having spent months quietly briefing local police departments across Los Angeles County on the finely honed clockwork of the Chinese student’s network.

When the DEA called for backup, San Gabriel police launched. They tailed the big Ram truck for hours, weaving through LA’s dense murk until the truck finally stopped in a Compton parking lot. There, the driver transferred two boxes from a silver sedan into his truck. Moments later, officers swooped in, seizing 50 kilos of cocaine — concrete proof that the Chinese money trail led directly to narcotics.

Meanwhile, Steven Gonzalez, DEA’s lead detective, shadowed the blue Maserati east, far from Compton’s industrial edges, finally arriving in Temple City — a quiet suburban enclave in the western San Gabriel Valley, known for its large Chinese community and discreet residential streets. There, a person emerged with a bag and passed it to two women waiting in a car. When officers stopped her car, they found $25,000 in cash — dollars procured through Sai Zhang’s underground WeChat-based cash exchange.

The DEA team ultimately traced the white Ram truck — along with the same silver sedan that had delivered 50 kilos of cocaine to the Ram’s driver — back to a drug stash house in Rowland Heights. In December 2022, they intercepted another driver leaving that residence, seizing $500,000 in cash.

The next link in the Chinese-Sinaloa drug money chain closed the circle—from, in a sense, the Chinese student boss, Sai Zhang, down to his foot soldiers: Chinese exchange students in the United States, lured by the promise of easy spending money, and recruited through WeChat message boards to serve as money mules for organized crime.

These same students come from a vast pool of families whose North American tuition payments are themselves financed with laundered drug proceeds, weaving them even more tightly into fentanyl’s financial web.

A cinematic moment came on April 10, 2023. In the evening dusk officers watched a grocery bag of cash drop from a balcony belonging to one of Sai Zhang’s lieutenants. A Chinese man seen nervously pacing the sidewalk waiting for the bag drop scooped it up and drove off in a black Range Rover.

The Range Rover wound through Los Angeles, stopping at another pickup before heading to a quiet house in North Hills. There, the driver handed two bags to a tall young Chinese man — notable for his studious wire-frame glasses — waiting at the door.

Around midnight, officers knocked. An older woman nervously answered and led them to a bedroom. She told the officers she offered boarding to international exchange students. Under the bed, they found two grocery bags stuffed with $60,000 cash. The room belonged to a Chinese high-school student boarding in the home — a ground-level player in a global money chain, perhaps only vaguely aware, if at all, that their willingness to take “easy” money jobs in a parallel Chinese economy is driving overdose deaths and an overdue crackdown by American lawmakers.

In his affidavit, Steven Gonzales boils down the transnational model exposed by Zhang’s case in these terms: One method by which a Chinese businessman might purchase real estate in Los Angeles—while evading China’s strict currency export controls—involves acquiring U.S. dollars through an underground exchange. To do so, the businessman effectively “buys” dollars from a broker like Zhang who supplies drug cash already circulating in the United States.

In this arrangement, the Chinese investor transfers an equivalent amount of Chinese currency into a designated account in China controlled by the Mexican cartel. Once secured, those funds can then be used—legitimately on the surface—to settle debts owed by the cartel to Chinese manufacturers.

“The money in that account in China can legally be used to pay off legitimate debts to Chinese manufacturers who ship goods to Mexico,” U.S. court filings in Zhang’s indictment say.

The goods are shipped to Mexico, the DEA affidavit continues, where they are sold in the local market. The resulting pesos represent the final value of the drugs initially smuggled and sold in the United States, thereby closing the loop on the cartel’s illicit earnings and providing the Chinese investor with clean dollars to invest in U.S. assets.

Through this intricate scheme, the Chinese businessman successfully acquires the dollars needed to finance his Los Angeles property, while the Mexican traffickers are reimbursed for their American drug revenues.

Gonzales says that this scheme, known as trade-based money laundering, exploits legitimate international trade flows to conceal the movement of criminal proceeds—allowing transnational crime networks to move drugs across borders and launder and reintegrate illicit gains under the appearance of lawful commerce.

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The Belt and Road Driver: Don Im’s Analysis

For Don Im, the story of Zhang is far from new — just another chapter in a book he knows better than almost anyone. “We saw this going back to 2007, during the Zhenli Ye Gon era,” Im said. “It’s a bidding war. Whoever offers the highest price gets the drug dollars from North America and Europe.”

After listening to Don Im in hours of taped interviews, a metaphor suggests itself. China’s grip on the global economy — its underground and aboveground systems at work — is unimaginably complex. Black and white appear divided, but in fact are not. Like an Escher image maze, cash flows up, down, sideways — enters, exits, integrates, vanishes, reappears, reiterates. No exit, no end. A labyrinth of lies.

For this deep-dive story — to help explain the consequences to Western lawmakers, business leaders, and citizens affected by the fentanyl death crisis — Don Im provided sensitive details illustrating the scale and depth of money laundering and financial integration stemming from this narco economy.

“So you’re not seeing a direct, linear transfer of drug proceeds directly into China. You’ll see bulk cash being shipped. You’ll see money that’s placed and laundered within Canada or in the United States through local businesses. Then those funds are pulled into other accounts or investment vehicles—cryptocurrency, other so-called high-value assets, businesses, brick-and-mortar companies. And then they’re all sold again—homes as well.

And what’s that done? It’s offset with transfers of commodities that are equivalent to the millions of dollars or euros that are shipped from various companies in Guangzhou, where now you have, in those regions, thousands of Mexicans, Panamanians, and Colombians living and operating as their own diaspora with those Chinese manufacturing companies. Those companies are receiving orders from the Chinese businessmen in Mexico, Canada, Panama, Vancouver—requesting shipments of textiles, clothing, electronics, everyday products that the Chinese manufacture and we buy here and throughout the world.

And those are all equivalent to the amount of drug proceeds that the Chinese businessmen are buying in drug consumer countries. When I say North American consumer nations, I include Canada. Vancouver probably has the highest per capita overdose death rate in the world—the policy is insane there. So it’s essentially an indirect, asymmetric transfer of funds and value that has no direct correlation with, or link to, the drug proceeds that are generated off the streets—the heroin, the cocaine, the fentanyl, the marijuana, the methamphetamine.”

“They’ll deposit it into businesses and restaurants, and they’ll deposit those funds commingled with the legitimate funds they generate daily from restaurants, gas stations, convenience stores. And those will be deposited into numerous banks. Then the real drug proceeds—the profits—are transferred into a number of core accounts and pooled there. At that point, the owner in Mexico, Colombia, or Panama will decide where to send the money—to other accounts he controls.

Then he’ll go on WeChat and essentially enter one of those rooms—an auction for dollars. He’ll say, “Hey, listen, I’ve got a million in Vancouver, a million in New York, a million in Chicago—who wants to buy these?” And then you have Chinese citizens in China who are looking for dollars… to get their wealth out, or to pay off debt, or to get their kids into school elsewhere, or even to buy U.S. or Western products to ship into China. So they’ll bid—and they’ll pay a premium. Because what they’re doing is getting instructions to buy, say, a million dollars’ worth of commodities valued in Mexico, but in China it’s worth $800,000.”

Then the next time the cartel guy comes in and says, “Hey, I’ve got a million euros in Milan, Italy,” guess what? The Chinese businessman has the pesos to transfer to the cartel. So the Chinese businessman will pay $1.1 million—or a million dollars’ worth of renminbi or yuan—to ship internally in China to the manufacturing companies for all the commodities to be shipped to Mexico.

And once that’s shipped and the Chinese-Mexican businessman is satisfied with what he got, then he’ll say, “Okay, what do you want to do with the money in New York City?”

The Chinese businessman goes, “I want to look at a bunch of properties. I want you to send $200-some-thousand to New York University under the name of my son or nephew or niece.”

For those who might believe that China’s leaders are unaware of the global WeChat cash brokerage system — and its direct inputs into the Chinese factories powering Beijing’s mercantilist economy — Don Im offers a sobering set of facts.

“I brought it all together because I was running DEA’s money laundering operations at Special Operations Division, supporting undercover ops across the agency. DEA agents and analysts going back to the 2000’s tracked Mexicans and Colombians selling dollars to Chinese buyers. And they shared evidence with China law enforcement in circa 2012-2014.”

Im described even traveling to Beijing himself to brief the Ministry of Public Security.

“I personally went to Beijing in 2017, briefed top Ministry of Public Security officials. They listened when I explained how Chinese citizens use WeChat to buy drug dollars and then pay manufacturers in China to ship goods to brokers in Mexico. That was how the exchange happened.”

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The Most Powerful People in the World

On June 26, leading Mexican cartel reporter Ioan Grillo posted this message to X: ‘You follow drugs, you get drug addicts and drug dealers. But you start to follow the money, and you don’t know where the f—k it’s gonna take you’ — from The Wire,” Grillo explained, “but also relevant to the historic orders by the U.S. Treasury against three Mexican banks, issued yesterday.”

Under the leadership of Treasury Secretary Scott Bessent, the U.S. formally sanctioned CIBanco, Intercam Banco, and Vector Casa de Bolsa on June 25, designating them “financial institutions of primary money-laundering concern.” The move effectively cuts these banks off from the U.S. financial system, citing their roles in laundering millions of dollars on behalf of Mexico’s most powerful cartels and facilitating payments for fentanyl precursor chemicals imported from China. The designations mark the first major use of new powers under the Fentanyl Sanctions Act.

For Don Im, this kind of action is long overdue — and, in his view, could probably go much farther and higher, into very discomforting areas for some world leaders.

A file called “Operation Heart of Stone” is illustrative. Im says he designed and ran this U.S. undercover operation targeting Horacio Cartes, Paraguay’s former president, who was accused of deep involvement in drug trafficking and money laundering. A 2010 U.S. State Department cable — leaked by WikiLeaks and derailing Heart of Stone’s momentum — labeled Cartes as the head of a major drug trafficking and laundering network. But, as Im points out, “we still got HSBC and hit them with a $1.9 billion fine.”

Speaking about this case and his decades spent infiltrating the world’s most dangerous criminal and financial networks, Im offered a set of opinions that — while carefully worded — amount to a kind of manifesto on who should be held accountable for opioid death tolls, and how to confront the system enabling them.

“Throughout the 1980s and 1990s, the DEA and US Customs (HSI) and IRS, had conducted numerous undercover money laundering operations against the drug cartels. Massive cash generated on the streets of North America and Europe were being deposited into thousands of banks,” Im said. “As a result, numerous anti-money laundering legislation efforts were implemented costing banks billions of dollars in compliance. At the same time, DEA, IRS and US Customs agents, established these money laundering operations by posing as money launderers and bankers to infiltrate the drug cartels.”

“These operations allowed law enforcement a door into the global underground banking system,” he continued. “DEA, USCS, IRS agents were able to track drug proceeds into the murky world where dirty cash was being cleaned by a global network of banks, businesses, law firms, NGO’s, corporations, offshore havens, philanthropic organizations, and reappearing into the accounts of corrupt government and politicians, millionaires and billionaires and their families.”

According to Im, it was DEA operations such as Swordfish, Pisces, Green Ice, Polar Cap, Casablanca, as well as Heart of Stone, Titan, and Green Treasure, that helped law enforcement capture evidence and intelligence into how the global system operates — with Sleeping Giant and Sai Zhang’s Chinese student and Sinaloa Cartel nexus being the latest sweeping case proving Im’s point.

“These investigations and similar investigations, led DEA to better understand how Chinese Money Laundering Organizations were leveraging trade, commerce, banking, technology and corruption to create a system of global bartering and unofficial banking,” Im said. “By using money to lure bad guys, and following the money upstream, DEA was able to seize billions of dollars of drug cash, seize and forfeit billions of dollars in assets purchased with drug proceeds, and even fine major banks such as Bank of America, Citibank, HSBC, Standard Charter, TD Bank, Wells Fargo, and many more. However, less than a handful of bank executives have ever been indicted and sent to prison.

Even with evidence, bankers, lawyers, accountants and politicians skirted prison sentences, while the low-hanging fruit drug traffickers were indicted and arrested. The judicial system is discriminatory when it comes to wealth, status and political convenience.”

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The Digital Services Tax Q&A: “It was going to be complicated and messy”

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A tax expert on the departed Digital Services Tax, and the fiscal and policy holes it leaves behind

It’s fun, and fair, arguing whether Mark Carney “caved” in suspending the application of Canada’s Digital Services Tax to revive broader negotiations with the Trump administration. But I figure there are other dimensions to this issue besides tactics. So I got in touch with Allison Christians, a tax law professor at McGill University and the founding director of the Canadian Centre for Tax Policy.

In our talk, Christians discusses the policy landscape that led to the introduction of the DST; the pressure that contributed to its demise; and the ways other countries are addressing a central contradiction of the modern policy landscape: without some kind of digital tax, countries risk having to impose costs on their own digital industry that the overwhelmingly US-based multinationals can avoid.

I spoke to Christians on Friday. Her remarks are edited for length and clarity.


 

Paul Wells: I noticed in your social media that you express inordinate fondness for tax law.

Allison Christians: You will not find a more passionate adherent to the tax cult than me. Yes, I do. I love tax law. Of course I do. How could you not? How could you not love tax law?

PW: What’s to love about tax law?

Christians: Well, tax law is how we create our country. That’s how we build our society. That’s how we create the communities that we want to live in and the lifestyle that we want to share with our neighbours. That’s how: with tax law.

PW: I guess the goal [of tax policy] is to generate the largest amount of revenue with the smallest amount of grief? And to send social signals while you’re at it. Is that right?

Christians: I don’t think so. Tax is not about raising maximum revenue. Tax is about deciding what society you’re trying to build and what portions of that society need to be made public, and what can be left to private interests which then need to profit. So we have decided in Canada, as a country, that basic minimum healthcare cannot be a for-profit enterprise. It has to be a public enterprise in order to make sure that it works for everybody to a certain basic level. So tax is about making those decisions: are we going to privatize everything and everyone pays for their own health care, security, roads, insurance, fire department etc. And if they can’t pay, then too bad? Or are we going to have a certain minimum, and that minimum is going to be provided in a public way that harmonizes across the communities that we have. And that’s what tax is about. It’s not about extracting revenue at all. It’s about creating revenue. It’s about creating a market. It’s about investing in a community. So I just object to the whole idea that tax is about extracting something from me, because what tax is doing is creating a market for me to be able to thrive. Not just me, but all of my neighbours, as well.

PW: Let’s jump forward to the events of the past couple weeks. Were you surprised when the Prime Minister suspended the Digital Services Tax?

Christians: I think “surprise” is probably too strong of a word, because nothing any political leader does to cope with the volatility of the United States would surprise me. We are dealing with a major threat, a threat that is threatening to annex us, to take our resources, to take our sovereignty, to take our communities and rip them apart and turn them into a different way of being. And that’s a serious threat. So nothing would surprise me in response to that. Disappointed, of course. But not disappointed in our Canadian response. More disappointed in the juggernaut that Trump has been allowed to become by his base, and that they’re pulling the rug out from under everyone that’s cooperated with the US agenda for decades, including us.

PW: What’s your best understanding of what the Digital Services Tax was designed to accomplish? And is it unusual as taxes go?

Christians: So to understand this, you really have to be a policy wonk, which isn’t much fun. So I’m gonna give you an example that might make it clear from the perspective of Canada. Why we might have a Digital Service Tax or might want something like it.

I want to preface this by saying that the Digital Service Tax is by no means the only way to do the underlying things we want to accomplish. Certainly other countries have been collecting DSTs and have been collecting billions of dollars, and US companies have had reserves for paying that Digital Service Tax. So we just left money on the table. But let me try to explain why we want to do the thing without getting too “tax nerdy” on you.

So I’m sure you can come up with the one Canadian company that’s streaming content on television or on digital devices.

PWCrave?

Christians: Yeah, that’s the one. Crave is owned by Bell Media and is a Canadian company. And Crave pays taxes in Canada. Crave has to compete against Netflix, which does not have to pay tax in Canada. Netflix just simply doesn’t have to pay the same way that Crave does unless we force them to pay. Crave has to compete with US and foreign content streamers. We may get to a point where we can get Netflix to collect some sales tax on the GST, for example. But if Netflix itself stays out of Canada, physically, but it’s still getting all those customers that otherwise Crave would have access to, then Crave is at a structural disadvantage.

Now tell me which Canadian provider competes with Google.

PW: I can’t think of one.

Christians: Exactly. There isn’t one. How are we supposed to get a homegrown competitor when our competition simply does not pay taxes, and any one we would grow here in Canada has to pay tax here? So we have to understand the Digital Service Tax as simply our response to the fact that we normally do not tax a company unless they are physically located in Canada. But now we’ve got to go into this digital space and say: you’re still here, even if we can’t see you and talk to you, you’re still here. You’re doing something in our market. And that’s what the Digital Service Tax was trying to deal with.

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PW: Now, how are companies likely to respond to this Digital Services Tax? It seems to me the likeliest outcome would be that they would pass those costs on to their customers.

Christians: Yes, that is what companies have said they would do. Google talked about passing those costs on to the customers. And their customers obviously are advertisers. I want to point out that advertisers in Canada used to advertise in local newspapers and media. Now they advertise on Facebook, owned by an American-headquartered Company, Meta. Right now, they advertise on those foreign platforms, so we don’t have those advertising dollars here. Advertisers might have had to pay the Digital Service Tax if Google, or whoever, had passed it on to them. I think it’s fair to say, that Canadians advertising on those foreign platforms would have faced a gross-up to cover that tax.

PW: So, the net effect is that it just becomes more expensive for Canadian consumers. I’ve seen it argued that all this tax would have succeeded in doing is making Netflix more expensive.

Christians: Okay, that’s possible. I mean, that assumes the supply is totally elastic: you can increase the price of Netflix, and people will still pay it indefinitely. Right? So that’s the assumption in the short term. But the long-term assumption is that Crave becomes more competitive — because its competitors are paying the same tax that it is paying. The Crave subscription price may or may not respond, but if you put pressure on the foreign service providers in the same manner that’s on the Canadian providers, it might cost more, but we’re also getting the tax.

PW: I believe the Prime Minister, in an interview with the CBC said that he was thinking of getting rid of this thing, anyway. [The quote I’m reaching for here is: “Look, what we did this week is something that I think we were going to do anyways, in the end, for the deal.” At 1:07 in this video. — pw] Why do you think he would have been leaning in that direction? And do you think that absent a Truth Social post by President Trump, he actually would have gotten rid of the thing?

Christians: I can’t speculate too much about the politics of this, because I’m not talking to many of the people that make policy, but I know the complaints about the DST, and I don’t dispute them. It was going to be a complicated tax to collect and it was going to be messy in terms of compliance. There’s a lot of uncertainty around the tax and I know there’s always an enormous amount of pressure to reduce all taxes. There’s always going to be that segment of society that sees taxes being thrown down the drain and not as an investment in the society that we want to live in.

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American companies are famous for investing their money on lobbying and not in taxes. They spend their money convincing us that it would be bad for us to tax them, and they can spend a much smaller percentage of their money on lobbying and get us to believe that narrative. And the narrative is that somehow, if we tax Google, Google will go away and we won’t be able to use it. That Google won’t innovate. It’s nonsense, but it’s a story that resonates nonetheless. Was Prime Minister Carney pressured to get rid of the DST? Undoubtedly. And maybe he personally thinks there’s a better way to tax these companies than with an excise tax. I don’t fault him for thinking that. I have even written that there are better ways for Canada to collect this tax than the Digital Services Tax.

PW: I’m going to want you to tell me about these other ways. But I assume that if a Canadian government attempts any of these other ways, then the companies we’re talking about know that all they have to do is hit the Trump button and the pressure will be right back on.

Christians: That’s correct. There are a couple of [alternatives to the DST]. We could, like some other countries have done, redefine the types of income that we subject to withholding taxes in Canada. It’s a complicated technical idea, but basically any payments that go from our advertisers to Google, we could impose a withholding tax simply by expanding a couple of definitions in the Income Tax Act that would then carry over into our treaty. Now, people will push back on that, and say that you’re changing a deal, and people will object to that. And we can have an argument about that, but that possibility exists. That withholding tax is the most straightforward way to do this and we should probably already be thinking about it.

Another one that’s kind of fun, which I really enjoyed learning about when I came to Canada, is Section 19 in the Income Tax Act. So, Canadian advertisers are paying Google now, instead of a Canadian newspaper. Well, Section 19 basically says that whenever someone makes a payment for advertising to a foreign, non-Canadian media, that payment’s not deductible.

Now that provision seems to violate Free Trade rules because it changes, depending on who you make the payment to. But it’s a provision in law. The US objected to it when we adopted it by imposing a reciprocal tax on US advertisers paying Canadian outlets, which doesn’t seem to bother anybody.

PW: But the application of that will be very asymmetrical, right?

Christians: Yes, for sure. And I’ll tell you what the Canadian media noticed when we started paying for digital newspapers online: that they’re not subject to Section 19 — only print and traditional media are subject to this denial of deduction — and Canadian media advocated for this denial of deduction for online publications as well.

All you have to do is look at the wording of Section 19 — and you don’t even have to change the words — and all of a sudden all those payments to Google are not deductible. But if the payments were to Crave, they would be deductible, and if they are to the Globe and Mail, or other Canadian companies, they would be deductible. That is a different kind of advantage for the Canadian competitor that’s a little less susceptible to Trump’s understanding, and a little less susceptible to the politics that surround the Digital Services Tax. But it’s technical. You have to explain it to people, and they don’t believe you. It’s hard to understand it.

PW: Theoretically a two-time central-bank governor could wrap his head around it.

Christians: Yes, I think he could fully understand it, for sure. You’re absolutely right. Will he want to do it, though? I just don’t know.

PW: You said that there are other jurisdictions that continue, today, to successfully tax the web giants. Who are you thinking of?

Christians: Well, Austria’s been doing the Digital Service Tax since the beginning. The UK has the Diverted Profits Tax that they’ve been using. Australia has one that’s been enforced. Austria stands out because I think it was 2017, in Trump’s 1st term, and it was part of a group that Trump threatened to retaliate against, but they just quietly kept going and they’re still collecting it. Part of the narrative is that we, Canada, came too late to the DST party. We just weren’t part of that initial negotiation. We came in too late, and then it was too obvious, and people were able to isolate us from the pack.

PW: My understanding is we’re looking at a hypothetical $7.2 billion in revenue over 5 years. And that represents a shortfall that’s going to have to be found either in other revenue sources or in spending cuts, or in greater debt. Aside from the DST, do you think Canada could use a general overhaul of its tax code?

Christians: Always. Yes, absolutely! Taxes are funny, right? Because they come into every single political battle, and what ends up happening is that politicians treat the Tax Act and the tax system as a present-giving machinery, and not as a clear policy deliverance system.

I am, every day, surprised at how complicated the Canadian tax system is. It’s way too complicated. You can’t even fill out your own tax return in this country. You’re going to make mistakes because it’s just too ridiculously written. It’s too confusing. It’s too messy. So it’s time to take another look. But you need a commission [like the 1962 Carter royal commission on taxation]. You need to be bipartisan. You need to spend money on that. You need to think that the things that you do have long-term effects, and this takes political courage. And basically it requires upsetting a bunch of people and resetting things, and we just might not be at the right time politically to be doing that because people feel vulnerable to volatility from abroad. So it may not be the time to push that.

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