Evidence of meeting #7 for Industry, Science and Technology in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was content.
A recording is available from Parliament.
9:45 a.m.
Conservative
The Chair Conservative Michael Chong
Thank you, Ms. Parker.
We're now going to go to the next member to ensure that everybody gets a turn.
Mr. Lake.
9:45 a.m.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
Thank you, Mr. Chair.
I think I will start with a point of agreement.
I think I heard you acknowledge, Mr. Pineau, that competition is just one piece of the puzzle and regulation is another. I think you'd get some agreement from our side on that. I think we definitely have to find the balance, and that's the approach that the government has taken.
Certainly any company that operates in Canada is going to be operating under Canadian law. We have to remember that. We control the laws in this country, and any foreign company that is operating in Canada is going to be following Canadian law as it relates to anything, including broadcasting.
I've heard a lot of arguments. A lot of things have been thrown up against the wall here. One that caught my ear was the issue of spectrum. Just to clarify, we license the use of spectrum, and the licence is the asset in bankruptcy matters, not the spectrum itself. Spectrum use must follow the Broadcasting Act and other legislation. In the case of a foreign owner who goes into bankruptcy, spectrum sales are still subject to the Investment Canada Act, the national security net benefit reviews, all of those things. So I'll make a clarification there.
I want to go to something that I believe Mr. Murdoch was talking about as it related to foreign investment.
You said that with any new research and development that a foreign company undertakes in Canada, consumers might at some point benefit from it. But the foreign companies will hold the patent rights to this technology, not Canadians.
Would you also say that the converse is true? If a Canadian company is operating in another country, would Canadian companies benefit from that? Is that fair to say?
9:45 a.m.
Vice-President, Media, Communications, Energy and Paperworkers Union of Canada
If I understand your example, you're asking, if a Canadian company in California invents product A or technology A, would Canadians benefit from that?
9:45 a.m.
Vice-President, Media, Communications, Energy and Paperworkers Union of Canada
I suspect they would. But I guess--
9:45 a.m.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
You also talked in your presentation about Canadian leaders, Canadian champions. We know that in terms of foreign direct investment, while there may be some impression of...the words “hollowing out” come to mind, as used by the opposition. The fact of the matter is that Canadian companies are doing more in terms of foreign direct investment in other countries than the converse, to the tune of about $130 billion in the last year that numbers are available. It's a very significant amount.
So to turn your argument around, the reality would be that if the converse is true of what you said, Canadians should be benefiting. We have these champions, and if we make changes to our law, open up to foreign ownership and change the rules, it means that we'll also have more opportunities in other countries and Canadians will benefit from that.
9:45 a.m.
Vice-President, Media, Communications, Energy and Paperworkers Union of Canada
I am aware that we invest more than they do here. I'm aware of that. I would venture to say, though, specifically we're talking about some very key industries here; I'll mention that later on. These are different industries. This is not a furniture company. This is essential to our national identity and to our national strategy, to our security. So there is a difference in the companies. We would want to protect this more than perhaps any other.
The other thing is that, yes, Canadians could benefit from a patent that was done in California. Our concern now is that in this particular industry, there is a kind of whimsy, if you will, on the part of the owner of that patent who can say either that he will allow you to benefit from it or he will not. And in this industry, which is very key and certainly in the past 10 or 20 years the fastest-growing industry, you would see that it could become a matter of national security.
Our concern would be that somebody would say, yes, we invented that in Orillia, but you know what? It's going to stay here in Wisconsin.
So the patent-holders have the ability to make that decision--as we would, you're absolutely right--but because these industries are so key, we say leave them alone from that kind of whimsy.
9:50 a.m.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
I think the point, though, is that Canadians would benefit. I think what I hear is a real underestimation of the value of Canadian companies, the skill sets of Canadian companies, the ability of Canadian companies to compete, and that bothers me.
One of the things we have heard through this global slowdown on the whole, economically, is that Canada, among developed countries, is going to come out of this slowdown in the most competitive position compared to when we went in. Virtually every commentator is saying we're going to come out more competitive than we went in. It's because of our openness to trade, our openness to the global environment in everything. I think it's no different in telecommunications.
Let me assure you, I hear your concerns, all of your concerns, about broadcasting. Any company operating in Canada is going to be subject to Canadian laws, and we control the laws of Canada. But we can't shortchange our consumers, and our consumers are being shortchanged under the rules as they stand right now.
We talk about technology as it relates to rural areas. One of the things that openness to trade and openness to investment and this international sharing of knowledge does is bring in new technologies. Really, the answer to the problems faced by rural areas in terms of access to broadcasting and everything else relates to technology. As we increase our access to that technology, our rural areas are going to be better served.
Again, please don't come back to the question of culture and broadcasting. We can protect that using the laws we have--
9:50 a.m.
National Director, Canadian Conference of the Arts
No you cannot. You're not listening to what we're telling you.
I'm sorry--
9:50 a.m.
Vice-President, Media, Communications, Energy and Paperworkers Union of Canada
Alain, just hold on a minute.
First of all, we don't know for sure, by the way that...and you're right, all the commentators are saying that this country, thank heavens, is going to come out of the recession in excellent shape. I don't know whether that's because of foreign investment; I think it's because we've had a very well regulated, and, if you will, fairly conservative view in our banking system. Regulation is what has protected our financial community.
So when we move from regulation and what it can do for an economy, and compare that to telecommunications, where we have in cable...with 51% profit margins, and making enormous amounts of money, with completely unregulated for the consumers for their rates.
Regulation is what's going to help us, not foreign investment.
9:50 a.m.
Conservative
The Chair Conservative Michael Chong
Okay, thank you, Mr. Murdoch.
Mr. Pineau, and then we will go to our next member.
9:50 a.m.
National Director, Canadian Conference of the Arts
I apologize for my outburst--
9:50 a.m.
National Director, Canadian Conference of the Arts
--but you keep saying, “What I'm hearing”. Well, what you're not hearing is that....
I disagree fundamentally with both you and Mr. Garneau. We're not talking about the Telecommunications Act here. We're talking about the Broadcasting Act. You cannot erect a firewall between the two--that's what we're telling you--for a number of reasons, including the trade negotiations you are talking about, the trade agreements we have in place. Mr. Neil outlined what the implications were from one side of the firewall to the other. They're very clear and they're very real, and I ask that you consider this.
9:50 a.m.
Conservative
9:50 a.m.
Executive Director, Writers Guild of Canada
I'm not really sure what to add other than to say, you know what? We're not afraid to compete. We compete every day in a very hard business. There's nothing harder than working in a creative industry where you don't often get paid and there's very little appreciation. So just to let you know, we're really good with competition.
Where we don't agree with you is that we don't think this is going to solve your problem in terms of access. Granted, there is a problem. Let's figure out how to solve that problem. We don't think opening up foreign ownership regulations is the way to solve it.
I'm just going to leave it at that. There's a lot at play here. These protections—I don't even like using that word, “protections”—or these laws were brought into place for a reason, and if you are thinking that they don't work or we need to remove them, then you have to examine all the ramifications and find out if this is an actual way to solve your problem of accessing remote regions and higher speeds. I don't think it's going to get you where you want to go.
9:50 a.m.
Conservative
The Chair Conservative Michael Chong
Thank you very much, Mr. Lake.
We're going to Mr. Garneau on a point of order.
9:50 a.m.
Liberal
Marc Garneau Liberal Westmount—Ville-Marie, QC
I just want to say that both the Bloc and Mr. Pineau have lumped me in with the Conservatives, and I take exception to that.
9:50 a.m.
Voices
Oh, oh!
9:50 a.m.
Conservative
The Chair Conservative Michael Chong
That's not a point of order, it's a point of information, but it stands on the record.
Mr. Masse, go ahead. You have the floor.
9:55 a.m.
NDP
Brian Masse NDP Windsor West, ON
Seeing that you're actually supporting the Conservative budget anyway, it's easy to have that confusion....
Well, whether you're supporting or not supporting it, I don't know; it depends.
At any rate, I think one of the interesting things that has happened, and you hear it here today, is that Canadians are supposed to celebrate the fact that Canadian companies are getting record tax cuts right now. The government's position on this is, “Well, yes, we should allow foreign ownership to happen here, it's okay.” The way to rebuff the argument is to say that Canadian companies are investing abroad.
So we're supposed to celebrate that Canadian companies are deciding to invest overseas and into other foreign markets as opposed to Canadian companies and Canadian jobs. It doesn't do me any good in Windsor West, where we have an official unemployment rate of 15%, probably about 25% in total. We're supposed to be happy with the government's position to say it's terrific because Canadian companies are investing in Asia, Europe, and anywhere else—the southeast, and even in Michigan—and not in Ontario and elsewhere.
There's one thing I'm really interested in hearing a comment on. Right now there are no limitations on foreign investment; it's controlling shares. I agree with some of the discussion that has taken place here with regard to the content. I want to hear a little bit more, though, about the integration of the industry between the Internet, television, and even the airwaves. One of the things we've seen is this convergence, which is not dissimilar to other areas. Look at the oil and gas sector. You don't need to have collusion, because there's no competition due to the vertical integration of the industry. And that's what I'm concerned about.
I saw Mr. Wallace joke about how fewer reporters on the Hill would be a good thing. At the same time, though, we would--
9:55 a.m.
An hon. member
Hear, hear.
9:55 a.m.
Voices
Oh, oh!
9:55 a.m.
NDP
Brian Masse NDP Windsor West, ON
I was just joking--I'm not pointing it out to be negative toward Mr. Wallace--but the point is that you would then have less diversity in the types of stories and the interest, and then you would see the same thing happening. We all do this as members of Parliament: we check our hits in terms of where we've been. If you get in a certain chain, it then goes across the whole field, but in my opinion, you would then have less discussion about Canadian content, because we're all part of the same food chain.
So I'd like to hear more about that integration and the concerns about that, because I think that is important. And I do like to talk about Canadian content.
9:55 a.m.
Conservative