Recommends government ensure all conditions are enforceable if it does
OTTAWA – The merger between Rogers and Shaw should not proceed, the Standing Committee on Industry and Technology says in a report presented to the House today.
The committee recommends that if it does go through, however, the government should ensure “all conditions attached to the merger approval are fully enforceable and that resources are available to enforce them.”
According to the report, the committee, chaired by Liberal member of parliament Joël Lightbound, is unconvinced of the merger’s merits and has taken issue with the enforceability of the commitments Rogers has made related to the proposed merger.
“The Committee is puzzled by the arguments of Rogers and Shaw,” the report reads. “Rogers has linked a number of commitments to the merger that the government has no way to enforce. The Committee therefore doubts Rogers’s promises to rural regions, as the size of a company does not change the profitability of a region.”
The committee, which heard from 28 witnesses about the merger last spring, notes in the report it is “deeply troubled” by the state of competition in the telecommunications sector in Canada and says it is especially worried about how the merger will affect it.
According to the report, most witnesses the committee heard from “raised serious concerns about the proposed transaction, particularly its effects on competition in Canada and, in turn, on the affordability and accessibility of telecommunications services,” the report says.
The committee itself expresses concern about the Competition Bureau, ISED and the CRTC, which will each need to approve the merger for the deal to close.
In particular, the report indicates a concern that the Competition Act does not provide the Competition Bureau with the tools it needs to prioritize Canadians.
The committee also questions the direction the CRTC (and ISED) have taken recently. The report raises concerns about their impact on affordability and accessibility, highlighting the CRTC’s 2021 decision to reverse its 2019 wholesale rates decision as an example.
As a result of these concerns, the committee “is also worried about the effects this regulatory approach could have on their review of the proposed merger,” according to the report.
Given this, the committee recommended the government immediately review the Competition Act, ensure the Competition Bureau has enough resources and, when reviewing the proposed merger, “take measures to ensure that affordability and accessibility for all Canadians take precedence over all other considerations,” the report says.
The committee suggests the importance of Shaw’s Freedom Mobile as a fourth operator should be emphasized, and that the government bodies involved in reviewing the merger consider how the CRTC’s recent decisions impact the regulatory environment.
Yesterday, Minister of Innovation, Science and Industry François-Philippe Champagne issued a statement, which said he would not permit Rogers to acquire all of Shaw’s wireless assets.
In response, Rogers and Shaw sent out a joint statement saying they are continuing to work with the government and with regulators and continue to expect the deal to close in the first half of 2022.
To access the Standing Committee’s full report, Proposed Acquisition of Shaw Communications by Rogers Communications: Better Together?, please click here.
