Evidence of meeting #62 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was work.
A video is available from Parliament.
5:45 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
You believe that these changes will ultimately lead to more competition. Do you believe generally that more competition will lead to lower pricing?
5:45 p.m.
Director General, Telecommunications Policy Branch, Department of Industry
Since 2008 we have had new entrants into the marketplace and also different brands brought in by the incumbents. We have seen that pricing improvements have occurred.
5:45 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
Is there not also, though, an issue in telecommunications—certainly it's been in the U.S.—that deregulation and more competition don't necessarily lead to lower prices for consumers universally, but it leads to prices moving closer to costs? This will mean that, in a larger centre where there's some level of cherry-picking, this will to lead to lower prices in cities, but as companies try to make up for the loss in margins, it could actually lead to increases in prices in rural communities.
5:45 p.m.
Director General, Telecommunications Policy Branch, Department of Industry
We did look at that question, and it was actually quite interesting that the prices have mirrored in urban and rural areas. We looked at some of the major new brands that have come in, some of the pricing packages, and the pricing benefits have been shown in the rural areas as well.
5:45 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
That wasn't the case in the U.S. Actually, I'd be very interested if you could provide that to my office and to committee, because as a rural member of Parliament, that would be important for me to know.
5:45 p.m.
Director General, Telecommunications Policy Branch, Department of Industry
Sure.
We've generally seen different types of service plans of more consumer choice come into the market and some positive impacts on pricing.
5:45 p.m.
Director General, Telecommunications Policy Branch, Department of Industry
Yes.
5:45 p.m.
Conservative
5:45 p.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
I will not dwell on the fact that the question I asked earlier was entirely different from the one asked by Mrs. Glover, since I have another question.
We are talking about an amendment to the Telecommunications Act. Is it not the usual practice, when a bill is introduced separately, that is, when it is not part of a budget implementation bill, to have it examined by the relevant committee, in this case, the Standing Committee on Industry, Science and Technology?
5:50 p.m.
Director General, Telecommunications Policy Branch, Department of Industry
This would come under the industry committee, yes.
5:50 p.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
If it were a bill separate from Bill C-38, An Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012, and other measures, it would have been examined by the Standing Committee on Industry, Science and Technology, is that not correct?
5:50 p.m.
Director General, Telecommunications Policy Branch, Department of Industry
Yes.
5:50 p.m.
Conservative
The Chair Conservative James Rajotte
I have to follow up on the 10% issue. I certainly support the measures in this budget in terms of allowing more foreign investment in this sector, but I'm going to refer you to a 2003 report from the industry committee, which I sat on. In its second recommendation, that committee recommended allowing foreign investment for all carriers in the sector, which I will confess is my instinctive position. So I just wanted to get more of a rationale as to why we would distinguish between the different carriers in this sector. For instance, do we do this in any other industry, do we apply a 10% rule or another type of rule to different industries or different companies in that sector?
5:50 p.m.
Director General, Telecommunications Policy Branch, Department of Industry
Go ahead, Allan.
5:50 p.m.
Allan MacGillivray Special Advisor to the Director General, Telecommunications Policy, Department of Industry
Actually, I'm not an expert, but there is a two-tier system in banking as well, in terms of schedule A and then other banks, in terms of the widely held rule, which applies only to the major banks.
5:50 p.m.
Conservative
The Chair Conservative James Rajotte
But in terms of foreign investment...? The widely held rule applies to all types of investors.
5:50 p.m.
Special Advisor to the Director General, Telecommunications Policy, Department of Industry
That's the closest parallel. I was just trying to address your question. Yes.
5:50 p.m.
Director General, Telecommunications Policy Branch, Department of Industry
But this is a targeted measure that is specifically targeting a capital area for small companies. The larger companies have no shortage of capital. They have ample sources of capital, and they're not near their limits, so therefore they're not in need of this change. It's targeted to the companies that actually need it.
5:50 p.m.
Conservative
The Chair Conservative James Rajotte
So if three companies are not in shortage of any capital and would not take advantage of any foreign...?
5:50 p.m.
Director General, Telecommunications Policy Branch, Department of Industry
They are in a position of being incumbents. If you're an incumbent, you have advantages. You have the customer base. You have your sunk investment. They're an attractive investment target, whereas new entrants have very high risk and very high leverage. They're similar to what you would find in a start-up company in having the very high-leveraged and high-risk type of investment. Not all investors want to invest in that type of company.
5:50 p.m.
Conservative
5:50 p.m.
Director General, Telecommunications Policy Branch, Department of Industry
We're not experts on the other sectors per se. That would be a question—