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.
4:50 p.m.
Independent
André Arthur Independent Portneuf—Jacques-Cartier, QC
Mr. Shaw, if it is going to take one more year to give you people a chance to compete with Bell Canada, how much money will that have cost the Canadian consumer?
4:50 p.m.
Chief Executive Officer, Shaw Communications Inc.
How much will it cost to wait an extra year?
4:50 p.m.
Chief Executive Officer, Shaw Communications Inc.
We're bringing great value now, and that's why Canadians are moving over. They're the telco's customers to lose. If they were to come with a great offer to all Canadians right now, there would be no competitive business. But that's not the case. If their service levels were high and Canadians were happy, they wouldn't come and sign up with me or COGECO, Rogers, or Vidéotron.
4:50 p.m.
Independent
André Arthur Independent Portneuf—Jacques-Cartier, QC
But there will be an answer from the federal level when you—
4:50 p.m.
Chief Executive Officer, Shaw Communications Inc.
There will. What you're asking me--
4:50 p.m.
Independent
André Arthur Independent Portneuf—Jacques-Cartier, QC
At that point, the price will come down, and the difference will have been an enormous cost in the meantime for the Canadian consumer.
4:50 p.m.
Chief Executive Officer, Shaw Communications Inc.
Right.
Then what you're asking us is to commit a large number of capital dollars to deploy in markets that will never, ever have competition if the prices drop. If you take a small town in any province in Canada, with prices dropped under deregulation we will not be able to afford to go in to spend the capital money, because we have shareholders too; we will not be able to afford it.
There is a timeframe from the start to the finish. I'm saying a shorter timeframe; my colleagues probably would like a little longer timeframe. But I think one year is the minimum and that it's very reasonable. I think it's a good approach for the committee.
Do you agree with that?
4:50 p.m.
Executive Vice-President, Corporate Affairs, Quebecor Inc., Vidéotron Ltée
But, Mr. Arthur, we can reverse the argument. I recognize the talented interviewer that you have always been. First, for 125 years, consumers have not received much for their money. Second, the act we're interested in was passed in 1993. Until very recently, two years ago in fact, 98.5% of the market in our areas was served by a monopoly. And the third argument I'm going to give you is that the biggest drop in cost to the consumer in the telephone world occurred when we entered the market. It's as simple as that. So the argument can be...
4:55 p.m.
Independent
André Arthur Independent Portneuf—Jacques-Cartier, QC
And the next drop will be even bigger when we deregulate telephone services. The companies will cut their prices to compete with you and we as consumers will benefit from that. So, in your opinion, we should wait until you say you're satisfied with what you have before we consumers can get a price cut.
4:55 p.m.
Conservative
4:55 p.m.
Executive Vice-President, Corporate Affairs, Quebecor Inc., Vidéotron Ltée
I don't think the word “satisfied” is appropriate. It's not a matter of satisfaction, Mr. Arthur.
4:55 p.m.
NDP
Brian Masse NDP Windsor West, ON
Thank you, Mr. Chair.
Mr. Mayrand, you mentioned—and I don't blame you for feeling skittish on this—political interference or decision-making as part of the process, given that the minister tried to reverse or suggested reversal of CRTC's advice over the Internet protocol decision. Unfortunately, since those appointments of a panel would be political themselves, I'm not sure we'd escape that trap.
I would like to start by asking, though, about the current process. What gives me a little concern is if this goes through as currently.... If it goes through without a piece of legislation, do you believe—and this is to the rest of your colleagues—Canadians will have a full say about deregulation of the industry, and also your shareholders?
4:55 p.m.
Vice-President, Corporate Affairs, COGECO Inc.
Well, let me react in this way.
The big concern we would have at COGECO with this direction is that it's not going to be very obvious, whether to Canadians in general or even to the commission itself, that it has more clarity and focused guidance on how to implement this transition from regulation to complete deregulation of local services. I really have difficulty seeing how, through this exercise, which obviously, as you suggested in your question, has a very limited lifespan, because we're all headed for a new telecom act.... And we support that. We support the effort of the TPRP report and totally acknowledge that the law has to be reformed.
Whether Canadians will get a better sense out of this direction about what has to occur and how their interests are better fulfilled in the meantime is certainly up for debate, but I wouldn't vouch for it.
4:55 p.m.
NDP
Brian Masse NDP Windsor West, ON
We heard the suggestion that the strategy of switching as a corporation to an income trust can lead to increased availability of resources for infrastructure, and a series of things. But also, among the concerns I hear from consumers is that it also could be that you'd have further purchasing of companies and further vertical integration of the industry.
I throw this out to you. If this were to happen very soon, what would happen if we lost a couple of the major players in the market? Would competition increase or would it decrease?
4:55 p.m.
Chief Executive Officer, Shaw Communications Inc.
I've been pretty vocal on income trusts. While it looks right for a telco scenario, it does not look correct for a cable or a growth-economy company. We have to use most of our capital to redeploy, to do telephone, business telephone, HD, VOD, SVS, PD, pay-per-view, everything. We continue to bear that load, so it'll be a long time before we get into what I'll call a TELUS or BCE situation. I don't see that happening.
The one thing that might happen is this. They have a currency now that's valued high, based on the monthly dividends, so they could use their currency, which is their shares, to go and buy other companies. But other than the two of them going together, there's probably not a lot they could buy. Buying Manitoba Tel or MTS or SaskTel probably wouldn't make a big difference in the Canadian landscape. I think you're talking across the table to the only major competitor in telephony that's going to be serious on the business and residential side. It's these four companies.
5 p.m.
Chief Executive Officer, Shaw Communications Inc.
We'll just get it on the record. We're not for sale, but we need access to capital. I was before the committee once before, and some of the members were there. We said that capital gets harder to get all the time in Canada. You could go to a Canadian bank and they'll say, “Oh, yeah, I've got lots of money for you”, but then you'll ask, “What's the rate?” Well, if the rate is 10%, we don't want it. But now, with rates a little lower, capital is a little easier. But as things tense up, it gets tighter. So if I go to the investment side of a checklist with, let's say, Fidelity, they could give money to me, someone over here, someone over there. They go, “Foreign ownership? Oh, what's that? Ooh....” So I get Xed off the list.
All I'm saying is we need capital to build and deploy, and I think all the companies here have the same issue all around the world. As COGECO and others expand around the world, it becomes more obvious that we need more capital, not less.
