Okay. Merci.
Mr. McKay.
Evidence of meeting #16 for Finance in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was genome.
A recording is available from Parliament.
Evidence of meeting #16 for Finance in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was genome.
A recording is available from Parliament.
5:15 p.m.
Liberal
John McKay Liberal Scarborough—Guildwood, ON
Just quickly, you said there were four companies that would be affected by this legislation currently.
5:15 p.m.
Director, Industry Framework Policy, Telecommunications Policy Branch, Department of Industry
That's correct, yes.
5:15 p.m.
Liberal
John McKay Liberal Scarborough—Guildwood, ON
And what's the current rule with respect to the ownership of a satellite?
5:15 p.m.
Director, Industry Framework Policy, Telecommunications Policy Branch, Department of Industry
Iit's actually the satellite company, and the rules that apply to the satellite industry are those that apply generally to all telecommunications carriers. And in the legislation there are effectively three requirements: the company that is the carrier has to have no less than 80% voting shares held by Canadians; the board of directors must be composed of 80% Canadians, as a minimum; and the company must be controlled in fact by Canadians.
5:15 p.m.
Liberal
John McKay Liberal Scarborough—Guildwood, ON
So if we take out the 80% controlled by Canadians, 80% of Canadian shares, and 80% Canadian directors, and eliminate that entirely, that's what the effect of this decision would be.
5:15 p.m.
Director, Industry Framework Policy, Telecommunications Policy Branch, Department of Industry
That's correct.
5:15 p.m.
Liberal
John McKay Liberal Scarborough—Guildwood, ON
And presumably if you do that, you list yourself.... Are any of these companies listed on the Toronto Stock Exchange?
5:15 p.m.
Director, Industry Framework Policy, Telecommunications Policy Branch, Department of Industry
Not that I'm aware of. They're all privately traded, as I understand.
5:15 p.m.
Liberal
John McKay Liberal Scarborough—Guildwood, ON
So the owners of these companies would then dress themselves up, get on the Toronto Stock Exchange, and issue shares, presumably.
5:15 p.m.
Director, Industry Framework Policy, Telecommunications Policy Branch, Department of Industry
Obviously what they do or don't do is going to be a private business decision. Mr. Goldberg has indicated that one of the options they may pursue is an IPO, but as I said, that will be the company's choice.
5:15 p.m.
Director, Industry Framework Policy, Telecommunications Policy Branch, Department of Industry
I'm sorry, he's the CEO of Telesat, the largest provider.
5:15 p.m.
Liberal
John McKay Liberal Scarborough—Guildwood, ON
Okay, so Mr. Goldberg could in theory have the company listed on the Toronto Stock Exchange. It would be one option, in theory, just an entire sale of the shares to pretty well anybody.
5:15 p.m.
Director, Industry Framework Policy, Telecommunications Policy Branch, Department of Industry
As I said, you'd have to ask Mr. Goldberg what his intentions are.
5:15 p.m.
Liberal
John McKay Liberal Scarborough—Guildwood, ON
No, I'm not saying “ask Mr. Goldberg”, but this is in theory.
So does the test of whether it is of significant benefit to Canada apply?
5:15 p.m.
Director, Industry Framework Policy, Telecommunications Policy Branch, Department of Industry
Yes. I'm not an expert in the Investment Canada Act, but I can tell you that the Investment Canada Act would apply if the assets of the company were above the threshold that is in there.
5:15 p.m.
Liberal
5:15 p.m.
Director, Industry Framework Policy, Telecommunications Policy Branch, Department of Industry
I believe that's correct, yes--$298 million, as I recall.
5:15 p.m.
Liberal
John McKay Liberal Scarborough—Guildwood, ON
I have no idea what any of these companies would be worth, either on the private market or on a public market like the TSX. So if in fact they're worth less than $300 million or whatever the threshold test might be, there would be no issue as to whether the sale of this particular company or companies would be of significant benefit to Canada.
5:15 p.m.
Director, Industry Framework Policy, Telecommunications Policy Branch, Department of Industry
As I've mentioned, Telesat's CEO did give testimony this week, and I believe, based on his testimony, their asset value is above that threshold.
5:15 p.m.
Director, Industry Framework Policy, Telecommunications Policy Branch, Department of Industry
Yes. I can't speak to the other three; I'm sorry.
5:15 p.m.
Liberal
John McKay Liberal Scarborough—Guildwood, ON
What is it that these companies can't do now because they don't have access to capital or whatever? What is it they can't do?
5:15 p.m.
Director, Industry Framework Policy, Telecommunications Policy Branch, Department of Industry
As Mr. Goldberg explained, they have a foreign partner—Loral Skynet—and they are more or less at the limit in terms of their ability to issue shares to non-Canadians. They are seeking the flexibility to potentially acquire other smaller companies through share exchanges. For example, if they wanted to acquire a smaller satellite provider that offers service in the Middle East, where they actually have a gap--Telesat is not in a position to offer service there--they could do a share swap. Right now they can't because they would not be able to offer shares to foreigners.