OTTAWA – It remains to be seen how far Canada will crack open the door to foreign investment for our telecommunications companies.
Despite hints from Governor-General Michaelle Jean during Wednesday’s throne speech that the Government would loosen regulations around the entire telecom industry, Thursday’s new Federal Budget only mentioned Canada’s satellite telecommunications sector by name.
“Consistent with the recommendations of the Competition Policy Review Panel, the Government is acting in Budget 2010 to remove the existing restrictions on foreign ownership of Canadian satellites”, it reads. “This will allow firms to access foreign capital and know-how and to invest in new and advanced technologies. The removal of restrictions will also allow Canadian firms to develop strategic global relationships that will enable them to participate fully in foreign markets.”
What that means for wireless and Internet providers is unclear. The Government also said that allowing foreign companies to buy Canadian satellites would result in lower costs for consumers, though exactly how is also unclear at this point.
The Public Interest Advocacy Centre (PIAC) said that consumers were not provided with lower prices and more choices by the major Canadian telecommunications players as promised when they were deregulated three years ago through the actions of then Industry Minister Maxime Bernier in response to the lobbying of the big telephone companies.
“New foreign entrants may make for more competitive telecom markets with more efficient pricing and choice, particularly in markets where there is largely a duopoly between the old telephone company and the incumbent cable provider”, said executive director Michael Janigan, in a statement. “But if relaxation of foreign ownership rules leads to takeovers and mergers of existing Canadian firms, we won’t get there. As well, more foreign competition won’t solve the problem of the need for enforceable rules ensuring consumer friendly standards and conduct by providers.”
The Budget also made reference to government investments that support artists and cultural organizations, including “stabilizing funding” for the Canada Media Fund.
But this was not enough for the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), who accused the Conservatives of ignoring the economic potential of Canada’s film, TV and digital media industry.
“The government missed a prime opportunity to capitalize on the potential of the film, TV and digital media industry – which alone generates $5 billion to the Canadian economy and creates over 125,000 good jobs”, said ACTRA’s national executive director Stephen Waddell, in a statement. “Furthermore, their plan to sell off our telecommunications sector to foreign conglomerates could result in loss of Canadian jobs and threatens Canadian culture.”
