Can surveillance pricing be stopped?

Hi, Donovan Woods here. Hey, hey, it's me Tom Power. We're here to tell you about our brand new podcast. It's called The Big Five. So, Donovan, what is The Big Five? Yeah, exactly. What is The Big Five? That's what The Big Five is all about. Every week Tom and I will sit down with a special guest and dive into new topics, debating things like, what are The Big Five Farm Animals? The Big Five types of hat. The Big Five guy's name Paul. Martin, Revere, Mezcal, McCartney, John Paul Seck. The debate is settled by a listener from somewhere across the country. It's like a game show. It is a game show. The Big Five, available now wherever you get your podcast. This is a CBC podcast. Hey, everyone. It's Jamie. Jim Balsley, the former co-CEO of Research and Motion and Blackberry, is my guest today. For years, Jim has been one of the loudest voices in the country to speak out about how data is being used to concentrate wealth and power and to manipulate the way that you and I behave. That's included helping the province of Manitoba take aim at things like algorithmic or surveillance pricing where businesses offer different prices based on consumers' personal data. Jim is also the founder of the Canadian Shield Institute, a nonpartisan organization that aims to build economic resilience and sovereignty in Canada. And we'll talk to him about that as well, including how he thinks Canada is poised to give up our digital sovereignty and more in the upcoming QCMATOX. Mr. Balsley, thank you so much for coming on to Fromfurner. Such a pleasure to be with you. It's so great to have you. So let's start with the practice of algorithmic surveillance pricing, something that the federal NDP leader Avi Lewis has been talking a lot about in recent weeks. He's calling on the federal government to ban the practice. It's a crystal clear example of why we desperately need government guardrails to protect us from the triple threat of big tech AI and corporate monopolies that dominate every sector of our economy. An emotion should do that was put forward in the house but failed. The Ontario NDP just put out a pretty slick new ad advocating for a ban. It's watching everything you do. What you search for. What you browse online. What you buy. When you buy it, it builds a profile and then it calculates what's the most this person will pay. It's called surveillance pricing. Corporations. It's also something that the province of Manitoba is targeting through legislation. I know you've been involved in that somewhat. And just first, can you talk a bit more about how algorithmic pricing works? What is it that we're talking about? Sure. And I'll draw a nuanced distinction between algorithmic pricing and surveillance pricing, which also uses algorithms. Algorithmic pricing is when you use algorithms to set prices and they've been used in coordinated fashion that are considered anti-competitive like setting grants between various renting properties using algorithms of coordination or how they use it for concert tickets and things like that. Surveillance pricing is when they actually surveil you and they know a lot about you. And if you knew, it would shudder to know how much information is captured about you every minute of the day and brokered throughout the world to these companies and then they say, okay, I know you've broken your leg and you need to get to work. So I'm going to charge twice as much for that taxi. And they've had experiences where they offer different kinds of grocery prices online, the different kind of taxi prices where if your battery's low or you're in a hurry or you've got a no other alternative and it's used for all kinds of e-commerce and they charge different according to do you have an expensive laptop or are you in a prosperous neighborhood for subscriptions or education services. So it's really efficient markets create a benefit of everybody seeing the same price and getting the same price and that's how the free market creates benefit. But Surveillance pricing charges everybody different on what they think they can get. And is this something that we are actually seeing play out in Canada right now? Like is there proof that it's happening, especially at scale? Well, a lot of it's opaque. So they back into it with coupons from a high price and a lot of these systems aren't that transparent but there's been a lot of documented cases of this happening in the US and the competition bureau in Canada has done some research on it but you have to do market studies and they've got the power to do these market studies in the US. They've recently given that power to our competition bureau. So if it's happening south of the border, you can be assured it's happening here and now that we've got the powers to research it, you can be very confident that it's happening here too. Just for people listening, this consumer report from two progressive advocacy groups in the US groundwork collaborative and more perfect union found the Instacart as an example offered nearly three out of every four grocery items to shoppers at multiple prices in an experiment. And they did this experiment involving 437 shoppers in live tests across the city and it actually found that the pricing would mean price swings of around $1,200 on groceries for the average American family. And the worst part about it is it tends to target the most vulnerable and that's the shame of it all. So when we have a cost of living crisis and we have a paycheck erosion issue, you use these surveillance mechanisms to raise prices where you can get away with it and compress vulnerable employees. And so it worsens the circumstance by breaking the free market and using digital surveillance and algorithms to do that. Just tell me more about what that means, like giving it they would pay people less money. Yes, well they use and this has been documented in research that it's not only used to raise prices on people, particularly the vulnerable but not always the vulnerable, but are precarious vulnerable. But also for workers they know how desperate they are to keep that job, how much they need that pay, how close they are to quitting or not. And they use all that and find different mechanisms to suppress their pay. And that's been researched and surfaced with very very big companies doing it. Premier Doug Ford came out against banning algorithmic pricing recently. He said essentially the banning practice would be socialism. No better way of letting people get lower costs on the matter of its cars or homes or brochures than competition. That is what we believe in. That's a capitalist society and market. The other one is socialists. And he made that argument that in a free market competition, naturally lowers prices that algorithms help a market act more efficiently and efficient markets lead to lower average prices. You have just kind of maybe argument for why you don't think that is the case. But I just wonder if you could elaborate it on that argument a little bit more. I think you're saying that a free market would mean that everybody has access to the same information. But when we're dealing with surveillance pricing, that is not the case. So it's not free. Premier Ford is wrong and I've told him personally, when you have an imbalance of power and you have an imbalance of knowledge information that's called any symmetry that breaks markets. And so this is not a free market. It's an opposite of a free market. It's a new form of tyranny. And I don't understand how he justifiably goes and regulates the work environment for workplace abuses. Why not just let the free market handle those abuses? And why would you let abuses happen in the consumer market or in this other kind of surveillance wages market? So it's absolutely 24 of the 50 states are doing this in the US. It's going to become the norm very soon. These abuses are very substantial and pernicious and consequential. I don't want to make you repeat yourself too much. But just how you would respond to the argument that we don't need these bans on surveillance pricing because we have laws on the books already. It is illegal to collude on pricing. For example, human rights codes already prohibit pricing discrimination based on say race, for example. Yeah, but is it wrong to discriminate you because you're a single mother with a desperate child? That's not race. Is that a human rights issue? Is it wrong to double your taxy rate because you have a broken leg and can't walk otherwise? So the fact of the matter, yes, we have a lot of laws on the books. But these forms of technology are pushing the edge of these or running ahead of them. And we have norms of in values we share in this country. But this medium, these digital medium are threatening pretty much most of them. And if we don't regulate this for the public good, then we will all we all are paying the price. I just want to ask you specifically about the Manitoba bill and how it would work. So as I understand it, it bans companies from using algorithms to charge higher prices. But could companies then work around that and just set all of their prices high and then deliver coupons to people? Like, is it easy to get around? I think it's my question. Well, it's a function of the details. I I suspect the way they word it will catch it. And I suspect a lot of the kinds of wording and strategies won't be dramatically dissimilar to what some of the subnational jurisdictions are doing in the US. But it's a very, very good question and how to make it effective. I think when you go at these things, you just try to shrink the problem. Can you get rid of 80% of the abuses? But don't let perfection be the enemy of moving the ball down the field. [MUSIC PLAYING] [MUSIC PLAYING] Hi, Donovan Woods here. Hey, hey, it's me, Tom Power. We're here to tell you about our brand new podcast is called The Big Five. So Donovan, what is The Big Five? Yeah, exactly. Every week, Tom and I will sit down with a special guest and dive into new topics, debating things like what are The Big Five Farm Animals, The Big Five, types of hat, The Big Five Guy's name Paul. Martin, Revere, Mezcal, McCartney, John Paul II. It is a game show. This issue of algorithmic surveillance pricing is one example of what you argue is problematic about an economy that is increasingly driven by data, right? Let me ask you about some of the other things here that you talk about a lot. Some of Canada's biggest companies are also in a way big tech firms. I think of a company like La Blas, for example, according to its 2025 annual report, it's got more than 18 million active PC-optive members. And they redeemed over $1 billion worth of points. That's a lot of user data about our shopping habits. And really, it's for nearly half the Canadian population. And just what concerns you about that data and where it goes? But of course, that there's an extensive data brokerage business and the purpose of what you're allowed to collect and the purpose for it is a critical part of what the Europeans have done in their data governance privacy. And our first two attempts were severely captured by corporate and big tech issues in the prior Trudeau government. And it's coming along imminent again. But yeah, and that doesn't stop a brochure whoever it is from brokering also in all your location data, which is very precise over the past year on your phones, all your financial data, all your other browsing data. So when you take one aspect and then places like Walgreens have been found doing biometrics in the store and they in Walmart are putting digital price tags on everything in the store. So these are comprehensive systems. Don't think it's just limited to a loyalty card. It's all agglomerated. Massive Tros with great minutia, much things like biometric and your motions and your mood and your circumstances can be fused into it. And then it says, OK, I think I can capture some more here. I can maybe even change your mood. And does that violate human rights of autonomy and transparency and reality and fair information? These are novel ways to hijack human rights. The government would not put human rights into the privacy legislation like other jurisdictions such as Europe have done that it's a fundamental human right. They took it as a balancing between consumer and corporate interest. They see it as a consumer issue because you can balance consumer issues. But violating human rights is a bit of a legal absolute. And so that's been a major issue that will the new privacy legislation finally acknowledge this as a human right. These concerns you have about Canadian privacy and safety and the need to protect our data. How is it complicated by the exponential development that we're seeing with AI right now? Canada had a view that you don't really need to build a lot of capacity for these things. You just get out of the way. And so what's happened is we're in a hole of inattention. We didn't cover in these things. And we didn't build expertise to govern these things. We let them just bleed control and prosperity bleed out of the country, particularly south of the border. So it's a hole. It's getting deeper. And yet we've not reoriented nor built capacity to it. So it can be fixed. But it begins with an orientation of governing for the benefit of Canadians in Canada and building the expertise to do it and then navigating the world as it's unfolding. And I guess on that point, the federal government and several provincial governments, too, have really been pushing this idea of data sovereignty, right? We're talking about building data centers in Canada. And what do you make of that focus? And what does actual data sovereignty look like? They're conflate dating centers with sovereignty. And that's a big mistake. Because it's a thin line between strip binding and AI and data and participating in a new factor of productivity economically and non-economically. So the government gave a big $240 million grant under sovereign compute to a US cloud company that's governed under the Cloud Act, whose owners and prosperity accrues the US. So just because it's here doesn't mean we benefit. So yes, we need access to sovereign compute. There are many things we can do to start to say, OK, we have to bring back this sovereignty. We have to bring back this prosperity, this inattention and laissez-faire-ness, Canada's paid us a veer price. And certainly the terms of the USMCA, were very dire for Canada six and a half years ago. And so now we have to say that was a mistake. We have to start to build back our country, our sovereignty, our prosperity, our security, our well-being. But it starts with a reorientation of the nation. It starts with bringing in the technical expertise, understands how this is done. I wonder if you could just elaborate for me a little bit more on what we have given up and what you think the consequences are of that. Well, a shorter list would be what we haven't given up. We call this the trade agreement, USMCA. And there were no tariffs taken down in USMCA. Yet the US put everything on the line and threatened the whole relationship if we don't sign this thing. So what is it? And fundamentally, there are instruments of regulatory remote control. They govern just about everything in Canada. Our macroeconomic strategies, our global trade agreements, our environmental programs, our health care programs, our intellectual property, and data governance, our procurement. It's extensive. And so these are realms that used to be within the democratic realm of a country. But instead, they got hijacked into a treaty ostensibly as a trade agreement, but they really weren't. And then when that happened, our prosperity plummeted. In the past five years, since that agreement, Candace had the worst economic growth of the 50 developed countries in the world. And we've had all these sovereignty vulnerabilities and all these social elements that have come forward. And that's because the trade realm, which used to be about tariffs, migrated into the democratic realm and we've lost so much of our democracy-- I just want to try and get to the crux of your argument here. Is what you're essentially arguing that we've given up so much of our digital sovereignty to the United States that we've really just become like a digital vassal state of the United States? We've given up so much of our sovereignty to the United States. And we've become very much a vassal state, digital, and more. Remember, we can't do a free trade agreement without them being OK. It says our macroeconomic policy. Policies must be OK by the US under USMCA. How we govern the environment? Environmental policies are health care policies. Our standards, our intellectual property, our data governance, our procurement. It goes on and on. If you actually read the agreement, you would find that our democratic House of Commons isn't what it was capable of before this agreement. And yet, we trumpeted as some kind of envy and success, understanding that the EU fought very aggressively, hard lines in the sand against the US on these provisions and said, no way are we going to allow you to hijack our EU sovereignty on these realms. And we happily or willingly let it slide. Well, I mean, certainly if you listen to the Prime Minister, Mark Karney and the people around him, they do say that we have the current agreement that we have is currently kind of the envy of the world, lower tariffs than a lot of other countries. Well, certainly it says the Prime Minister, right? Yeah, but that's not the world. That's one person saying it to Canadians. And have they read the agreement? Have they read these provisions? Do they agree with them? Are they going to push back in them? [MUSIC PLAYING] I want to put to you something that the Chief Technology Officer of IBM Canada said he makes the argument, that sovereignty would mean giving up lots of advantages. The more separated you are from the global cloud computing system, the more resources you have to pour into it. And ultimately, it'll make your business model less competitive. Yeah, but that's just strong in arguments. I mean, he has to do that as his corporate job. But those are strong in arguments. They say either become subordinate sucker or North Korea. and it's In fact, it's a much more technical and nuanced argument. All the countries, smart countries in Southeast Asia and Europe are navigating these things. It's not a black and white thing. Of course, you want to be connected with the world. Of course, you want to have capability, but not at any price in any way. I've heard you talk about how Canada missed the shift from an economy based on producing tangible goods, wood and oil, to an economy driven by intangible assets, IP data, and that we're now seeing Canada's standard of living steadily and decline. I just wonder if you could flesh that out for me. I'm 100%. Yeah, of course. Well, I think the original sin for Canada was in 1994. There was an orange book for an innovation economy. It was very important as they used tangible production economy, words like efficiency and cost. We've never broke from the original 1970s production economy, efficiency cost incentives model to something that's about legal frameworks to become the landlord and others be the tenant. That was the original sin. The second sin was really the data economy really began in earnest about 2010, 15 years ago. At that time, we characterize data as something that gets traded and it's not. It's something that gets exfiltrated or bleeds out. We never had strategies to manage that and capture that. It's the intention to the knowledge of IP and the intangible of data where the money and the power is never there's no data strategies. There's no sovereign compute that goes with the data. There's no intellectual property strategies. The rest of the world and especially US, but they're doing this economic state crafting Canada and we've not attended to it. What would it take to make that kind of shift? First thing is expertise. There is no expertise or it's orientation and expertise. It's 92% of how you've S&P 500. It's where the tens of trillions of dollars is. You go near it and the US puts anything on the line whether it's a digital services tax or sovereign compute or anything else like that. Let's say the Canadian government renews, QSMA generally has is the summer. They don't move on these kind of shifts that you're advocating for. What is the consequence of that? Ultimately, do you think? Well, first of all, the consequent, the erosion will continue and the price we pay will be ever more severe. We know that people have a cost of living issue. We know that paychecks under pressure. We know costs are going up. We know that there's social harms of polarization and mental health and kids and all that. These costs will just keep going. However, maybe in many respects because of where we are, Canada is a real taker, not a real maker. Then we have to start to say, "Okay, what are our red lines in this for where we really want to be day two that we're not going to manage erosion, but we're going to actually think about the future and how do we start to navigate more shrewdly within the constraints that exist?" But that assessment and navigation expertise has never done in USMCA, has not been done yet. And I've been very much on the inside in these things. I'm not seeing any evidence of it whatsoever. So I appreciate there are constraints under and we can't completely abandon where we are. And again, I'm all forgetting our resources to market our commodities. I'm all for it. And yet we have to start to orient towards where the real money and the real future is. And that, I just want to see that invoked with orientation and expertise. But it's not to the absolute exclusion of these other things. And where does Trump and this administration fit into the conversation that we're having? Did they make that harder and more complicated to do? They sure do because they're brazen out in norms. And what he does is he surrounds himself with very shrewd and very smart, very powerful business people who say, "I want this, this, this, this, and this to hijack the value chain." And so that's a very dangerous reality because it leads to a greater divergence of circumstance between us and the US. However, I have characterized that I think President Trump has overplayed the hand because it's woken Canadians up. And so if that, if we needed that hard hit on the head, well, I guess it's the blessing that we needed because it woke us up. But it's only a blessing if we take that wake up call and seize it. So if this wakes us up and say, "Now we have to move beyond commodities to these value out. Now we have to do more forms of sovereignty in this." It's not some shared destiny rules-based global order of traded goods, which is not the world we've lived in for decades. That's a blessing. But it's, oh, again, it's only a blessing if we wake up and seize it. To just that final question for you, it strikes me, you created one of the most profitable and successful companies in this country. You are part of a minority view on this. And just why is it that it seems like you're kind of swimming upstream with these positions that you're taking? Why are they so divergent from the position that the Prime Minister and other thought leaders in this country seem to be taking? Well, there's a lot of people that share my concerns. A large number from the route there, but you have to understand Canada doesn't do discourse. It does bully. And so what happens is you either submit to the narrative of the incumbents or they bully. Whatever the strengths and weaknesses of the US, they do discourse. And gaslighting is a form of bullying. So yeah, they haven't been able to capture me. They won't. I'm an electrician son who wouldn't have a home if we didn't have a union job and wouldn't have gone to university if we didn't have OSAP. So I'm not going to sell out those that I felt people planted trees that I got to sit under in those metaphorical respects. And so I'm not going to stop. I think there's a lot of good people out there. And Canada has to learn how to do discourse on these issues and actually surface expertise. But if you'd see it, it's actually a strategy to not do engagement, to not do expertise, to not do discourse is to do gaslighting. And we as civil society have to push back on that. Or the erosion is going to continue because those strategies aren't working for Canadians. But then they keep saying we're the envy of the world and we're number one in the G7. And then people in their lived experience feel must be me and it's not them. There's good people out there. There's lots of them. They're pushing this hard and I'm not alone. And they're very meaningful to me. It's a beautiful country. We all love it and feel of something it's worth fighting for. Okay. Mr. Balsali, thank you. Pleasure's on line. [Music] I'm Jamie Pusson. Thanks so much for listening. Talk to you tomorrow.