Evidence of meeting #21 for Industry, Science and Technology in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was competition.
A recording is available from Parliament.
6 p.m.
Conservative
The Chair Conservative James Rajotte
Mr. McTeague, that's not a point of order. That's a matter for debate. The question was asked by Mr. Arthur. It was answered by Mr. Janigan.
Mr. Arthur, you had ten seconds left. Okay, thank you.
I know we've imposed on your time--we've gone past time--but I would like to finish the first round of questions if it's okay with you. We will finish with Mr. Masse.
6 p.m.
NDP
Brian Masse NDP Windsor West, ON
Thank you, Mr. Chair. I just have a couple of quick questions. A lot of them have already been answered.
With regard to the issue of income trusts, I believe this is a new part of the equation of what could happen with deregulation. I'd like to have your comments on what you might see with regard to companies moving into income trusts, and the changing nature of their business in terms of how they can use capital assets in the market, whether for infrastructure or for purchasing other companies. How could that complicate things right now?
6 p.m.
Executive Director and General Counsel, Public Interest Advocacy Centre
I'm not certain what the use of an income trust is, specific to actual deregulation. As a matter of fact, this week, in the price cap proceedings, we visited this issue for both TELUS and Bell Canada, and it seems clear that the income trust instrument is capable of being used by them in the context of a price cap that was to be applied to their regulated services. It was essentially an innovation or a productivity enhancement that they chose to use with respect to their company, and they were effectively able to do so.
If the issue of income trusts is to be looked at in terms of an overall public policy--and there are particular elements that are disturbing, particularly the disincentive to invest--then I think it has to be looked at in a tax context and whether, from the standpoint of tax policy, you want to deal with it. I don't necessarily think it's a matter of telecom regulation per se.
6 p.m.
Chair, Telecom Committee, President, Mountain Cablevision, Canadian Cable Systems Alliance
I have two really quick comments. The first is that I'm a little concerned about Janet Yale's response on income trust where she inferred that the tax efficiency they render at TELUS gives them more money to spend on capital, which means it gives them more money to compete with the competition that's trying to come into the market. I'm hoping that's not the case, that it actually might go the other way.
The second is that I can pretty well guarantee that none of my members is going to become an income trust. That's about all I can say.
6 p.m.
President and Chief Operating Officer, Primus Telecommunications Canada Inc.
I think it's a function of how the income trust is structured, what the payout ratios are and how much you retain for capital investment.
Certainly there is a concern that the motivation is to maximize and to continue to increase payout, and over time you may find that the amount available for investment may decrease. I don't think that's an initial step. I don't think the companies that are looking at income trusts would do that if they felt it restricted their flexibility to invest in Canada.
6 p.m.
President, Enterprise Solutions, MTS Allstream Inc.
I would agree with Ted. I think that's where the cheese will get a little bit binding, when it starts to restrict the investment in capital and keeping networks modern, for example.
Certainly, when you listen to both Bell and TELUS, they are indicating that it's a separate decision from their actual strategy. The strategy continues to be as it is and the investments continue to be as they are.
I find it hard to imagine that the conversion to a trust will result in more capital expenditure, though.
6 p.m.
Analyst, Telecommunications, Broadcasting and Information Highway Policies and Regulation, L'Union des consommateurs
I don't know enough about the mechanics of income trusts to be able to say how that might influence the regulatory framework currently applicable to the old monopolies.
6 p.m.
Spokeswoman, President, Inter.net; Chief Operating Officer, Universe Communications Corporation, Quebec Coalition of Internet Service Providers
In our minds, the way the companies are structured financially isn't important. The incumbent companies are still investing in infrastructure. In my view, the restrictions on those funds, the way in which these people can make the infrastructure operate in the future are what should be taken into consideration above all. As some of my colleagues have said, neither the Bell people nor the Telus people told us that this would have an impact on their intention to invest in the future.
6:05 p.m.
NDP
Brian Masse NDP Windsor West, ON
But that substantiates what we don't know. I think the long-term effects are very important, because decisions have to be made about rural and other types of market expansions that require that capital.
Those are all my questions, Mr. Chair.
6:05 p.m.
Conservative
The Chair Conservative James Rajotte
Thank you very much, Mr. Masse. I appreciate that.
Thank you very much for being with us, and I appreciate you responding to the time limits. I know it was very pressurized, but I appreciate that from all of you. Thank you for your comments.
If any of you have any further comments you'd like to make, you can certainly submit them to the clerk and we will ensure that the committee members get them.
I understand I have a couple of issues, a motion and a question to the chair. So I would like to thank you at this point for your time, and then I think we'll continue with our meeting, even though I understand members have to get back to the House.
I've imposed on members' time, so perhaps we could make this very brief.
Mr. Crête gave me notice first.
6:05 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
I request the committee's unanimous consent to agree to the motion of which you have all received copies, and which reads as follows:
[...] it is proposed that the permanent Committee of Industry, Sciences and Technology recommends to the government to offer a further six months delay to the application of instructions in regards of policies on telecommunications indicating to the CRTC to rely further on free market in order to allow, in respect to the complexity of the subject and its implication, to carry out a thorough study on the impact of this deregulation as well as to hear more witnesses, and that the adoption of this motion be reported to the House as soon as possible.
I know that, failing unanimous consent, 48 hours' notice must be given. I therefore request unanimous consent so that we can debate this motion immediately.
6:05 p.m.
An hon. member
No.
6:05 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
So we'll submit it within the 48-hour time period.
6:05 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
Mr. Chairman, if it's in order, I'd be curious to know if the consumer protection branch of the Department of Industry was consulted in the drafting of this direction, and if so, if their advice can be shared with the committee.
6:05 p.m.
Conservative
The Chair Conservative James Rajotte
I'm not aware of that answer, but we can certainly put that question to the department.
Thank you very much. We're going to adjourn until Tuesday.