Evidence of meeting #18 for Canadian Heritage in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was newspapers.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Bob Cox  Chair, Canadian Newspaper Association
Bernard Lord  President and Chief Executive Officer, Canadian Wireless Telecommunications Association
Louis Audet  President and Chief Executive Officer, Cogeco Inc.
Joseph Volpe  Publisher and President, Corriere Canadese

9:10 a.m.

Chair, Canadian Newspaper Association

Bob Cox

Yes. The newspapers aren't simply printed things anymore. Newspapers are news organizations. We encouraged our reporters to go into digital, and we insisted, in many cases. Many of them would have loved to stay in print and to be able to have long lunches and file by four o'clock. We want them in digital, because as a news organization we may be digital, we may be print, and in most cases we will be video as well.

The idea that there's TV, radio, and print is outdated. Now there are news organizations on various platforms.

9:10 a.m.

Conservative

Kevin Waugh Conservative Saskatoon—Grasswood, SK

We had Transcontinental here at this committee a month ago, and when I mentioned that the inserts in the newspapers are the revenue of the newspapers, I remember the gentleman scolding me over that.

Little did we know. Yesterday Transcontinental sold all their newspapers in Saskatchewan. Probably the reason he scolded me was that they were in negotiations with Star News. Now we've lost 30 jobs in Saskatchewan. Their printing press is down, they've sold the newspapers, and they're out of Saskatchewan.

What are your thoughts on that?

9:10 a.m.

Chair, Canadian Newspaper Association

Bob Cox

Large media companies aren't the best at owning newspapers, especially in small communities. One of the reasons my company, FP Newspapers, has been a success is that we're managers of the company. We have a few community newspapers, we have a couple of daily newspapers, we care about our communities, and we live in our communities. If something happens to the newspaper that affects the community, it probably affects my life too, so we understand it very well.

I can't make excuses, nor can I speak for any large company in the decisions they make, but they usually make decisions based on how much money they can make, whether they're making enough money, and that sort of thing.

That isn't the basis for all the decisions that are made. People like Roger Holmes, who bought the newspapers yesterday in Saskatchewan, care about communities—

9:15 a.m.

Conservative

Kevin Waugh Conservative Saskatoon—Grasswood, SK

I hope so. He bought them.

9:15 a.m.

Chair, Canadian Newspaper Association

Bob Cox

He's willing to invest, so let's make the rules better for people like him so that he who cares about those communities can invest in them.

9:15 a.m.

Conservative

Kevin Waugh Conservative Saskatoon—Grasswood, SK

We wish him well.

Mr. Lord, wireless users, as you said, are at an all-time high in this country, yet I think we pay the highest fees in the world.

9:15 a.m.

President and Chief Executive Officer, Canadian Wireless Telecommunications Association

Bernard Lord

That's incorrect.

9:15 a.m.

Conservative

Kevin Waugh Conservative Saskatoon—Grasswood, SK

Okay, so where are we in the world in terms of fees? Everybody who has one of these devices claims they're paying more than they'd pay in the United States or Europe.

9:15 a.m.

President and Chief Executive Officer, Canadian Wireless Telecommunications Association

Bernard Lord

I would refer you directly to the United States. The CRTC does a market analysis every year, and our prices on average are lower than those in the U.S., according to the last study by the CRTC.

One thing you have to keep in mind is that service and quality of service are very different in different parts of the world. In Canada we have among the fastest, most robust, and reliable networks you can find anywhere.

The most recent study on speeds of networks shows that Canadians enjoy the second-fastest networks of all the 190 countries in the world. That's really good. You're buying access to a network. We see in Canada that Canadians love using their devices more. We are—

9:15 a.m.

Conservative

Kevin Waugh Conservative Saskatoon—Grasswood, SK

Like that.

9:15 a.m.

Some hon. members

Oh, oh!

9:15 a.m.

President and Chief Executive Officer, Canadian Wireless Telecommunications Association

Bernard Lord

Like that. It never stops.

I couldn't time that any better. Thank you. You know, we have staff listening to this, and they call in when it's time.

In Canada we are the fourth heaviest users of data, and that's where it's moving. I remember the first phone I bought was really just to make calls, and then we started texting, and now it's all about data consumption. These are portable computers that we use once in a while to call. In terms of data consumption , Canadians are the fourth-heaviest users of data online, and that's what you're buying.

We also like the most sophisticated device. If you look around this room or you go into most homes in Canada, Canadians love the best devices, the robust devices with a lot of memory, and that costs more. When you package all that, that's the value we get.

We know we have more than 29 million subscribers in Canada, and they're consuming more than ever. However, the one thing that we're concerned with today, and the reason we're here—and what I'm saying is in support of what Mr. Cox is saying—is the fact that there is an uneven playing field when it comes to taxation.

9:15 a.m.

Conservative

Kevin Waugh Conservative Saskatoon—Grasswood, SK

I've heard that. Yes, keep going. You, above everyone else in this room, know that consumers don't want to pay more.

9:15 a.m.

President and Chief Executive Officer, Canadian Wireless Telecommunications Association

Bernard Lord

Absolutely. Canadian consumers are smart, and they will go and find the best value. Frankly, business owners in Canada are also smart. If they can advertise the same product in a similar format and get a 15% rebate because they don't have to pay sales tax, versus advertising in a digital format and paying a 15% or a 13% sales tax, and they feel they'll get the same outcome, they'll take the one that costs less.

If you're home one night and you can watch a movie, and you can do it through a Canadian provider or you can do it through an American provider, and you're watching the same movie and it's the same price—$6.99—but one will charge you sales tax because they're Canadian and the other one won't because they're not Canadian, which one are you going to pick? Most people will pick the one that doesn't charge sales tax, because they get exactly the same product, exactly the same service at the same time, the same experience. The only difference is that they don't have the enjoyment of paying the sales tax.

9:15 a.m.

Conservative

Kevin Waugh Conservative Saskatoon—Grasswood, SK

That's the GST or HST. I understand that. Do you want government to tax them, then?

9:15 a.m.

President and Chief Executive Officer, Canadian Wireless Telecommunications Association

Bernard Lord

Well, there's more than one option here.

9:15 a.m.

Conservative

Kevin Waugh Conservative Saskatoon—Grasswood, SK

What are the options, then?

9:15 a.m.

President and Chief Executive Officer, Canadian Wireless Telecommunications Association

Bernard Lord

The option is either to tax foreign digital services or untax Canadian digital services. That's the choice. That's a public policy position, but I think it's clear that we need to level the playing field.

9:15 a.m.

Conservative

Kevin Waugh Conservative Saskatoon—Grasswood, SK

How much if we don't tax Canadian—

9:15 a.m.

Liberal

The Chair Liberal Hedy Fry

Time is up, actually. Maybe Mr. Lord can finish his thought. A quick thought, Mr. Lord.

9:15 a.m.

Conservative

Kevin Waugh Conservative Saskatoon—Grasswood, SK

How much would it cost if we didn't tax these companies in Canada?

9:15 a.m.

President and Chief Executive Officer, Canadian Wireless Telecommunications Association

Bernard Lord

We don't have that number.

9:15 a.m.

Liberal

The Chair Liberal Hedy Fry

Thank you.

Next is Mr. Nantel, for the NDP.

9:15 a.m.

NDP

Pierre Nantel NDP Longueuil—Saint-Hubert, QC

Good morning, everyone. Thank you for being here.

I think this conversation is really fantastic. Mr. Lord, I think it's too bad you don't have any figures concerning this policy. I understand. It's definitely a fly in the ointment everyone is trying to ignore. Everyone is looking for their raincoat and saying they will make no decision on the issue.

International companies are offering their services under the table. In English, the term “over the top” is used, but in reality, it's under the table, as there are no taxes. Housekeepers and mechanics who change our winter tires are criticized for asking us whether we want to pay taxes or not. They do that openly, and nothing is being done on the issue. It's the same thing for anything virtual, such as when we order software on the Internet or anything of that sort. The Canadian government must show some backbone and consult its international peers to make a decision on the matter, as this is a very serious problem.

I'm happy that you are here. We don't know how long you will keep your job. You were talked about a lot over the weekend. As you are a unifying force, we will ask you a bunch of questions.

As you said, everyone wants more and more wireless services. We agree on that. At the same time, we have a love-hate relationship with our provider. The people in the group you represent have very different behaviours. Some of them are pretty difficult. Some know it all, some are entrepreneurial and resourceful, and some are small new players with animal images. They're all very different.

Telus recently announced an end to unlimited data plans. Can you tell us what that means? You are saying that Canadians are increasingly consuming wireless Internet services, but Telus is putting an end to unlimited data plans.

Will this lead to increasing competition for data and larger and larger networks that will require increasing amounts of spectrum to provide those services? Ultimately, it will not be profitable. So should Canadians expect to pay more?

9:20 a.m.

President and Chief Executive Officer, Canadian Wireless Telecommunications Association

Bernard Lord

That's an excellent question. When it comes to plans, both the members of our association and associate and affiliate members set their own prices. We don't hold discussions amongst ourselves to determine how or why the price of a given plan is set as it is.

In fact, this is an evolving industry. To answer your question, I will show how the evolution is ongoing in the wireless world.

A few years ago, it was extremely rare for someone to consume 1 gigabyte per month in Canada. However, the average today is 1.5 gigabyte a month, and it is rapidly increasing. It is rare for those under the age of 40 to consume less than 1 gigabyte.

In reality, we use our devices to read news online, watch videos, watch a hockey match, do research or do business. We are increasingly heading toward what we call the Internet of things. More and more devices will be interconnected, and that will lead to more data usage. So we will have to have networks capable of supporting that growth.

Imagine that we now have a four-lane road capable of meeting our needs, but it's announced that, in five years' time, that road will have to have 24 lanes. That's exactly in line with the reality. Our networks of today will have to be six times more efficient and larger in five years.

Let's come back to the taxation issue. You are using the example of Canadian workers, such as mechanics or people who work in the service industry, who decide not to impose GST. That's a good analogy. We currently have a system in Canada that enables foreign companies that are among the largest in the world—you can see that by looking up their value on stock markets—not to impose sales taxes when they sell their products. We are not talking about short-lived U.S. boutiques, but about very large companies capable of selling their services in Canada.