Industry Committee on April 20th, 2010

[Alek Krstajic]

We finished our process with the CRTC, the papers have flown back and forth, and we're waiting for the announcement to come out. We believe we are in compliance. We're waiting for the final, official notification. We don't have to go through a hearing because we didn't have anywhere near the same level of foreign capital.

My issue, sir, is that I was told that I needed to go out and get more Canadian capital. I worked hard to get that Canadian capital. That changed the amount of the company that I own, the terms under which.... It changed the number of board seats and all of those things that come along with an aggressive Canadian investor who says “I'll give you this money, but this is what I want.”

My colleagues next to me did not have to do that. They have one fundamental source of funds, Naguib Sawiris, out of Egypt. It's a very different situation.

Had I been able to go out and get foreign capital the way they did, if I ignored the rules, pushed the rules, I might have been in a different situation. Now looking back on it, given that the Conservative government decided to change the laws--which is essentially what they've done--I look at it and say maybe I should have done that. But I followed the rules.

[The Chair, Conservative, Michael Chong]

Thank you very much, Mr. Scarpaleggia. Thank you very much, Mr. Krstajic.

We're going to go now to the last member for our committee today, Mr. Van Kesteren.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you, Mr. Chair.

Thank you for coming, Mr. Krstajic.

Montenegro, is that on the Adriatic Sea, right underneath--

[Alek Krstajic]

It's right on the Adriatic Sea.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Yes.

What does that mean? I'm just curious.

[Alek Krstajic]

Montenegro?

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

No, your name.

[Alek Krstajic]

I'm not sure.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

I have somewhat of an interest in linguistics.

I have to say something to you: I love what you've been saying, and I love your style, but you know, that statement about a “right”, that just blows me out of the water.

[Alek Krstajic]

Why?

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Well, you've got to be careful when you start talking that way, because the next thing you know, you'll get governments that will mandate that people have to have cellphones.

I read the other day in the paper that in Europe they've decided that vacations are a right now, too.

But let me just continue. Listen, like you, I'm a fierce defender of the capitalistic system, because I've seen the alternative, and it's not pretty.

You know what? Alexander Graham Bell--the guy who we claim invented the telephone--was incensed when people called him during the day and for any other reason than an actual emergency or something else that was important. We have come a long way. And I'm not saying we've gone in the wrong direction, but things change.

Last week--you're an economist, and I'm glad to hear that--I talked about Adam Smith. I like Adam Smith, because he made it pretty easy to understand. He understood why, or the motivation...you know, who has the most gold. He talked about the baker, and how it was not for his benefit that.... But you know all that stuff.

I guess in light of that, I want to ask you, would.... I think I know what your answer is going to be, and it's a good answer.

[Alek Krstajic]

Before I've given it?

[Voices]

Oh, oh!

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

For the most part, you've been straight on the money. I certainly like your style.

If we opened it up to foreign ownership, do you think there really would be a flood of foreign ownership? Would there really be companies like yours that would set up shop?

I understand where you've come from. They're my roots too. You see an opportunity because you know how to take advantage of what larger companies can't take advantage of any more.

In opening up the foreign restrictions, are we going to see a flood--the kind that we see in the fears from the NDP and the Bloc--of foreign ownership?

[Alek Krstajic]

Look, you won't see a flood that changes the landscape overnight. The reason you won't is that the gating factor on the opportunity is the ability to have a licence. The government still controls auctions, the rules around those auctions, and the licences that are granted.

So I don't think you're going to see a flood. I think what you're going to do, though, is over time allow more capital to flow to entrepreneurial ventures like ours that will ensure our success.

Again, I'm happy to say leave the status quo rules in place, but then leave them in place for me and them and everybody else. All I'm saying is that I want to go on the ice and play with five players against five players. That's it.

Now, the right: I have to just address that. Look, you'll have to forgive my previous gaffe on the conservative thing and the right thing. The right is the concept--not that you mandate it, but that people should have an ability to buy it because it's affordable. That's it.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

They should have an ability to buy anything, you're absolutely right, and the only system that's going to guarantee that is the capitalistic system.

[Alek Krstajic]

A 100% free market--I'm with you. I'm with you.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Absolutely.

So I caution you when you say things like that, because they're going to pick up on that, and the next thing you know, you're going to have more regulations.

[Alek Krstajic]

You know what? You've made me realize the error of my ways. I will....

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

The last point I want to make is that, you know, the rules haven't changed. We have a different interpretation, but the rules haven't changed.

I guess the point I'm making is that even though that's the case, you're able to enter this market because we haven't made restrictions, because we haven't made it too hard for you.

You're going to do well, I can tell you that. You're going to do just fine. The ones that won't do fine won't do fine because they just haven't instituted the proper techniques that you've demonstrated you've done.

In closing, I congratulate you. I think you're doing a great job. Keep it up--

[Alek Krstajic]

Thank you very much.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

--under the capitalistic system.

[The Chair, Conservative, Michael Chong]

Thank you very much, Mr. Van Kesteren.

I want to thank our witnesses from the two different companies we have in front of us today for appearing here.

We thank you very much for your testimony. It will be helpful for us as we conclude our study on the telecom sector.

Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

With regard to Mr. Van Kesteren's comments, if the U.S. has universal access rights and also consumer rights, could we maybe get some research on the difference, a comparison between U.S. and Canadian consumer rights? I think it would be beneficial for us, if there's the capability for that.

[The Chair, Conservative, Michael Chong]

We'll get the research analyst to prepare that for all members of the committee.

Mr. McTeague.