OTTAWA – In Wednesday’s Speech from the Throne to open the latest, much delayed, session of Parliament, the federal government has committed itself to allow more foreign investment in telecom and satellite in Canada.
While saying the government “will launch a digital economy strategy to drive the adoption of new technology across the economy. To encourage new ideas and protect the rights of Canadians whose research, development and artistic creativity contribute to Canada’s prosperity,” and that “our Government will also strengthen laws governing intellectual property and copyright,” (Read: Yet another stab at copyright reform, sigh…) the speech also said the feds will:
“(O)pen Canada’s doors further to venture capital and to foreign investment in key sectors, including the satellite and telecommunications industries, giving Canadian firms access to the funds and expertise they need,” read Governor-General Michaelle Jean.
There was no specific mention of the broadcast sector however, so one wonders how this may or may not affect broadcasters – or cable companies (which are governed under both the Telecom Act and Broadcasting Act). Expect them to demand equal treatment, though, should the rules be altered for telecom companies – wired or wireless.
Foreign ownership of Canadian telecom companies has been front and centre for many in Ottawa and beyond since December when the Minister of Industry, Tony Clement, overturned a CRTC decision which said Globalive, operator of the newly launched Wind mobile brand in Canada, was not Canadian controlled as our laws call for, and was in fact owned by Egyptian wireless company Orascom.
Critics have noted that while the CRTC’s process was at least a public one, no details have been released on how or why Clement’s ministry made its decision to reverse – and that there surely should be serious debate on changing the rules on foreign investment in telecom in Canada so everyone knows what the rules actually are.
Many believe the foreign investment restrictions are outdated and in dire need of overhaul – and that the industry here can’t function properly in the climate of uncertainty created by such one-off reversals of CRTC decisions as the Globalive re-ruling. More foreign investment would lead to better service and increased competition, say many.
Most of the Canadian telecoms (new wireless and older incumbents) contacted by Cartt.ca reserved comment on the feds plans until Thursday, when it’s expected Finance Minister Jim Flaherty will release more details during his budget speech.
However, in a release, Winnipeg-based MTS Allstream welcomed the Throne Speech. "Elimination of the foreign investment restrictions is a key ingredient to building a truly competitive digital economy characterized by the early offer and adoption of new technology across the economy," said Chris Peirce, chief corporate officer.
“We have consistently supported liberalization, most recently recommended by the Wilson Competition Policy Review Panel. As a company committed to offering choice and innovation to Canadians and Canadian businesses we believe removing barriers to investment will make Canada more competitive and bring new opportunities for investment and faster innovation to the Canadian economy. We look forward to learning the details on how the government intends to move forward with this important initiative."
Others, however, were not quite so positive…
“If telecommunications and satellite companies, which are in direct competition with cable, are permitted to be owned and controlled by foreign interests, then cable monopolies will demand equal treatment and sell out to the highest bidder,” claims a press release from Friends of Canadian Broadcasting.
“In mid-December, the federal government overturned a CRTC decision and granted a license to Globalive, a company which the CRTC determined is Egyptian owned and controlled, to operate a wireless service throughout Canada,” continues the release.
“We believe that Harper’s decision with respect to Globalive is illegal because the Telecommunications Act makes clear that all communications companies must be effectively owned and controlled by Canadians.”
The Communications, Energy and Paperworkers union played the “privacy and security” card, calling the speech from the Throne “yet another attack on Canada’s sovereignty,” in a release.
“Today’s announcement also has direct implications for broadcasting. As the telecommunications industry is now integrated with the broadcasting industry, the separation between telephones, Internet, music and broadcasting has all but disappeared. Allowing foreign ownership in one industry paves the way to foreign ownership in the other,” concludes CEP.
– Greg O’Brien
