Finance Committee on May 5th, 2010

[Jonathan DeWolfe]

That's right.

[Mike Wallace, Conservative, Burlington, ON]

So any budgetary change that happens before June of that current year, of the year we're in, is included in last year's piece.

[Jonathan DeWolfe]

Sorry. Let me be clear. The funding agreement with Genome Canada had to be and was concluded before March 31.

[Mike Wallace, Conservative, Burlington, ON]

It was concluded.

[Jonathan DeWolfe]

That's right, but to recognize that--

[Mike Wallace, Conservative, Burlington, ON]

Just to recognize the agreement....

[Jonathan DeWolfe]

—the BIA would need to be passed before June 30.

[Mike Wallace, Conservative, Burlington, ON]

Right. So if the agreement had been signed and concluded after March 31, even if it's in this section of the budget and the budget still passed before June 30, would it have applied in this year or would it apply in next year, if the agreement was signed after the 31st?

[Jonathan DeWolfe]

It would not be possible to record the $75 million in 2009-2010 if the funding agreement was concluded after March 31.

[Mike Wallace, Conservative, Burlington, ON]

Thank you very much. I think that clears it up.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Wallace.

I want to thank you for being with us here this afternoon.

Colleagues, we will move on to part 23, dealing with amendments to the Telecommunications Act, which makes “a carrier that is not a Canadian-owned and controlled corporation eligible to operate as a telecommunications common carrier if it owns or operates certain transmission facilities”.

We have with us Mr. MacGillivray, from Industry Canada.

Mr. McCallum.

[John McCallum, Liberal, Markham—Unionville, ON]

Before we get into this, can I just say, because I think we have bells at 5:30—

[The Chair, Conservative, James Rajotte]

We have bells at 5:30.

[John McCallum, Liberal, Markham—Unionville, ON]

—and we have to talk about subsequent meetings and witnesses, might we have such a procedural discussion in approximately ten minutes?

[The Chair, Conservative, James Rajotte]

Ten minutes from now?

[John McCallum, Liberal, Markham—Unionville, ON]

Well, that would give us ten minutes.

[The Chair, Conservative, James Rajotte]

Okay.

I have two members who want to ask questions on this part.

Monsieur Paillé, s'il vous plaît.

[Daniel Paillé, Bloc, Hochelaga, QC]

Mr. Chairman, I'm aware of the fact that time is passing, but I would like to say two things. First, we won't let ourselves be pushed around when it comes to asking questions. And when the bell rings, we won't continue sitting and pretend we don't hear it. Consequently, we won't agree to sit if the bell rings. We're here to do a good job.

With regard to Part 23 and competition, satellites are being excluded from the review and from any control over Canadian ownership. Is there an analysis, a model of an impact study that was done at the Department of Finance or within government on the financial impact that this amendment could have on the government or the Canadian economy?

[Allan MacGillivray, Director, Industry Framework Policy, Telecommunications Policy Branch, Department of Industry]

This change will itself be permissive; that is to say, it doesn't follow that there's necessarily going to be any impact. It's just permissive. If passed, this provision will allow the four Canadian satellite companies, if they so choose, to increase their foreign ownership. But they are still required to operate in Canada under other regulatory requirements of the government. So it's not clear that there's any financial impact of this change on the Government of Canada.

[Daniel Paillé, Bloc, Hochelaga, QC]

Is there an impact study for the Canadian economy? Is a possible decline in prices anticipated? Is there a model at the Department of Finance to justify this kind of decision?

If there's no impact on the Canadian economy, why do that?

[Allan MacGillivray]

I think the rationale for this change has been best expressed by Canada's largest satellite company, which is Telesat. Just on Tuesday the CEO of Telesat, Mr. Goldberg, testified before the Standing Committee on Industry on the benefits of changing the foreign investment restrictions as they applied to his company. He explained the situation as the fact that Telesat is the fourth-largest company in the world in terms of satellites, but it is actually much smaller than its three largest competitors. So their concern is that unless they have the opportunity to enter into equity-based alliances with other competitors in the marketplace, they're going to become increasingly marginalized in the international marketplace.

[Daniel Paillé, Bloc, Hochelaga, QC]

I understand that this is the official line of the Department of Industry. Unless I'm mistaken, you work at the Department of Industry. However, we are before officials from the Department of Finance and before the Standing Committee on Finance.

During the reading of the Throne Speech, the Governor General announced, on behalf of the government, that Canada's door would be open to venture capital and foreign investment in telecommunications. In the budget, that was limited to satellites. However, the Minister of Industry has made a decision on Globalive. In one fell swoop, he cancelled the administrative decisions.

Do you believe that this little part announces the opening up of all telecommunications sectors? If so, is it also the government's unavowed intention to open the entire broadcasting field to foreign ownership?

[Allan MacGillivray]

You're quite correct that the Speech from the Throne did make a general commitment--I believe the words were to the effect of opening the doors of the telecommunications industry to further foreign investment.

This particular amendment to the Telecommunications Act deals with one narrow portion of that commitment--that is, as it would affect the satellite sector. The Minister of Industry has yet to indicate his intentions more generally as to how he intends to address the more general commitment that was in the Speech from the Throne.

I would say that issue is actually being reviewed by the industry committee. They have had hearings this week and I think will again tomorrow.

[Le président, Conservative, James Rajotte]

Mr. Paillé, a brief question.

[Daniel Paillé, Bloc, Hochelaga, QC]

In the case of Globalive, he has already shown the direction. You're not required to answer me.