Evidence of meeting #45 for Industry, Science and Technology in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was crtc.
A recording is available from Parliament.
5:05 p.m.
Conservative
5:05 p.m.
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
Thank you again, Mr. Minister.
I have just a couple of quick ones, actually. As we know, local phones are the only part of telecommunications that are still regulated.
A little earlier I touched on long distance deregulation, which happened many years ago--a little bit of background. I'm wondering if you can help us with that transition and how that benefited Canadians.
Then, why do you feel so strongly regarding this reform, about the benefits that will be similar to long distance deregulation? If you could give a couple of comments, that would be appreciated.
5:05 p.m.
Conservative
Maxime Bernier Conservative Beauce, QC
Thank you very much.
As I said, the data I referred to with respect to lower pricing for long distance service in Canada beginning in 1998 are from the CRTC's 2001 Annual Report. I'm referring to chart 4.7. It's a diagram showing average long distance rates in Canada, and it clearly shows how prices dropped when deregulation occurred. The CRTC says that resale of long distance services began in the late 1980s, and facilities-based competition in 1992, but it was in 1998 that rate regulation diminished.
It is very important to make a distinction between rate regulation and the arrival of new market players. New players began to enter the long distance market in 1992. Despite the fact that there were new players operating in the market, rates remained relatively high at about 25¢ to 30¢ a minute. Now that there has been price deregulation—that is what we have now; we can make the comparison—we have new players in the market place which are the cable operators. Cable companies are able to offer local telephone service and secure market share previously held by former monopolies. So, we have new players who have been operating in the market for quite some time now.
We have now reached the point where it is time to deregulate prices, just as the CRTC did back in 1998 with long distance service. That was when we saw the impact on consumer pricing, and I hope we will see the same kind of impact on the pricing of local telephone service, so that consumers have better choices and benefit from more competitive prices. Based on the example we have with long distance service here in Canada, I am optimistic and I do believe we will see more competitive pricing in the coming months.
5:10 p.m.
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
Mr. Minister, this whole process that we're going through is actually very much about the consumer and trying to provide a service that we use at a better value and a better price, with quality service for the consumer. I'm wondering what feedback you've been receiving from the stakeholders on the policy directives you've put out.
5:10 p.m.
Conservative
Maxime Bernier Conservative Beauce, QC
We've seen a lot of feedback on the policy direction. After we made our proposed policy direction in Parliament in June 2006, we received 71 submissions. It was very useful for us, because in the end, if you compare the first policy direction that we issued last March and the one that is in force right now, that we put in force last December...we made some technical modifications to make sure we are in line with what the industry and the consumers of Canada want. Overall, the recommendations and the advice we received from Canadians was very positive. They want us to do what we must do as a government to issue policy directives to the CRTC and to use the power that we have under the legislation, and we did.
Also, I want to inform you that we did a consultation, but my department also did a consultation with the CRTC to be sure the CRTC would understand what we mean with the policy solution that is in force right now. I think it was useful for us to consult the CRTC. We made some technical changes to the policy direction after that, and also consulted all Canadians on it. So now we have in front of us a policy direction that is in force and that is in line with all the concerns we received.
What we want to do with the forbearance decision is the same thing. The forbearance decision received 175 submissions from people in 30 days, and we also received comments from the industry after this consultation. But you also received a lot of interested groups here before you last week and the week before. What we want to do is take that and be sure that when it will be time to decide on the forbearance decision, we'll have all the input necessary to be sure we're going to put something forward that will always be in the best interests of Canadian consumers.
5:10 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Thank you, Mr. Chairman.
The report was tabled in March, 2006. One year later, on March 1, will you be in a position to table an amended Telecommunications Act?
5:10 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
So, you have had the report for a year now, all kinds of recommendations have been made, including about 50 relating to legislative amendments, and yet you still are not ready to propose corrective action.
5:10 p.m.
Conservative
Maxime Bernier Conservative Beauce, QC
No, and I do want to take advantage of the input that will be forthcoming. I know that the Committee will be studying this over the next few weeks and that there will be a report on comprehensive telecommunications reform. I want to look at those recommendations and that input before starting to prepare a bill.
5:10 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
That is rather surprising. The usual process is for the government to table a bill, which we then examine in committee and invite witnesses to appear. In this case, it was urgent to take action in the telecommunications industry, but one year later, there is still no bill ready to be tabled, based on what you just told me.
Would that not justify the inclusion of a sunset clause with respect to local telephone service, because recommendations 3-5 and 9-4 of the Report both talk about the need for a specific timeframe? In recommendation 9-4, it talks about a comprehensive review of telecommunications policy every five years, and in recommendation 3-5, it refers to a transition period of between 12 and 18 months. Considering that only one part is being changed, would it not be logical for your policy direction to remain in effect for a limited period of time?
5:15 p.m.
Conservative
Maxime Bernier Conservative Beauce, QC
I really like recommendation 9-4, which reads as follows:
The Minister of Industry should be mandated by legislation to undertake a comprehensive review of telecommunications policy and regulation every five years.
That is a power the government has under various pieces of legislation.
5:15 p.m.
Bloc
5:15 p.m.
Conservative
Maxime Bernier Conservative Beauce, QC
I could make a commitment right now to include such a clause in a bill, because it is an important clause. We have the same thing in major pieces of legislation, such as the Bank Act, the Insurance Act, and a number of other Government of Canada statutes. I think it would be a very good idea to have a clause such as that in future legislation, thereby ensuring that policy and regulations are up to date and meet the requirements of both industry and Canadian consumers.
5:15 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
With respect to local telephone service, would it not be preferable to consider this type of measure, considering that the Act is not going to be amended? This new approach would not last for ever. It would only apply until the next legislation is amended. By then the situation might have been corrected.
Otherwise, we're just throwing a ball up in the air and have absolutely no idea where it's going to land.
5:15 p.m.
Conservative
Maxime Bernier Conservative Beauce, QC
I agree with your proposal that the Telecommunications Act include a provision like the one suggested in recommendation 9-4, so that there can be a debate every five years. You also referred to recommendation 3-5.
5:15 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
My question relates to local telephone service.
5:15 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
These are recommendations we will be making. If we were to suggest including a sunset clause, would you be open to that idea?
5:15 p.m.
Conservative
Maxime Bernier Conservative Beauce, QC
It is worth looking at. In this case, we are amending a CRTC decision pursuant to the powers we have under Section 12 of the Act. Consequently, I can only take action in relation to what the CRTC says in its decision. We are trying to ensure consistency with what came out of the CRTC hearings when it made the decision. In any case, your idea warrants further study.
