Evidence of meeting #13 for Industry, Science and Technology in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was satellites.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Daniel Goldberg  President and Chief Executive Officer, Telesat Canada
André Bureau  Chairman of the Board, Astral Media Inc.
Sophie Émond  Vice-President, Regulatory and Government Affairs, Astral Media Inc.

9:35 a.m.

Conservative

Mike Wallace Conservative Burlington, ON

Who did you buy the licences for that space from?

9:35 a.m.

President and Chief Executive Officer, Telesat Canada

Daniel Goldberg

Two of those satellites are licensed to us by the Federal Communications Commission in the U.S. We have one orbital location through the Government of Brazil, and their regulator is called Anatel. We have one through the Government of Tonga, which has gotten itself into the business of filing for orbital locations and dispersing them to other companies.

9:40 a.m.

Conservative

Mike Wallace Conservative Burlington, ON

Based on the evidence you've given, you're obviously in favour of opening up the market to foreign investment. Based on what you said, it's for you to be in the acquisition business, or it would help you to be in the acquisition business, out shopping or looking for other satellite companies that are already in existence that you may be able to partner up with or acquire. Is that an accurate statement?

9:40 a.m.

President and Chief Executive Officer, Telesat Canada

Daniel Goldberg

It is for two things, and that's one of them. One is to have a stock currency we can use to acquire other companies, because not all selling shareholders just want cash. If you bring satellite companies together, you create value. Oftentimes, the selling shareholders want to be part of the value you create in the more efficient, larger organization. That's one.

The other is that we'd like to be able to raise additional funds. Already, today, we have approximately $3 billion in debt. We have an asset value of $5 billion. We had to fund it somehow. That's how we funded it. Two of our larger competitors are publicly traded companies. In the future, when they need more money, they can raise debt or they can issue more equity. We would like to be able to go to the global equity markets. We might take Telesat public at some point. We need access to the global equity markets to raise additional funds.

9:40 a.m.

Conservative

Mike Wallace Conservative Burlington, ON

You mentioned that you have competitors in this space that talk to your customers. Are they required to meet the same Canadian content? You seem to have rules in terms of how much Canadian customers need to have or in terms of Canadian signals. I don't know what the definition is. Do they have to face the same restrictions you do?

9:40 a.m.

President and Chief Executive Officer, Telesat Canada

9:40 a.m.

Conservative

Mike Wallace Conservative Burlington, ON

You have to face those conditions because you are Canadian.

9:40 a.m.

President and Chief Executive Officer, Telesat Canada

Daniel Goldberg

It is the latter. It is a very anomalous situation. Our U.S. and European competitors come to this market to compete with us, and we lose business to them all too often, including from DND. We recently lost some attractive business there.

Our competitors come in and they don't have to pay Canadian licence fees. They don't have to cover all of Canada. They're not subject to the same rules we are at the CRTC, which can drag back our capacity for other applications.

9:40 a.m.

Conservative

Mike Wallace Conservative Burlington, ON

They don't face any of that.

9:40 a.m.

President and Chief Executive Officer, Telesat Canada

Daniel Goldberg

No. Zippo. For a decade now, they've been authorized to come in and compete with us, and they do. We have 12 satellites. Industry Canada has licensed 75 foreign satellites to come in. They cream-skim the bottom of the country....

9:40 a.m.

Conservative

Mike Wallace Conservative Burlington, ON

How many satellites are floating around up there?

9:40 a.m.

President and Chief Executive Officer, Telesat Canada

Daniel Goldberg

Do you mean commercial--

9:40 a.m.

Conservative

Mike Wallace Conservative Burlington, ON

I mean for commercial use.

9:40 a.m.

President and Chief Executive Officer, Telesat Canada

Daniel Goldberg

Communications satellites? There are a few hundred.

9:40 a.m.

Conservative

Mike Wallace Conservative Burlington, ON

Is that right? I would never have known.

9:40 a.m.

President and Chief Executive Officer, Telesat Canada

Daniel Goldberg

I told you that Intelsat has 56 today. They have eight more under construction. The bigger guys are getting bigger and bigger and bigger than we are every single day.

9:40 a.m.

Conservative

Mike Wallace Conservative Burlington, ON

Is there a risk, then, if this change doesn't happen, that you will just be...?

9:40 a.m.

President and Chief Executive Officer, Telesat Canada

Daniel Goldberg

We will be increasingly marginalized. Absolutely.

9:40 a.m.

President and Chief Executive Officer, Telesat Canada

Daniel Goldberg

Absolutely.

9:40 a.m.

Conservative

Mike Wallace Conservative Burlington, ON

Do other countries have rules like we do in terms of restrictions?

9:40 a.m.

President and Chief Executive Officer, Telesat Canada

9:40 a.m.

Conservative

Mike Wallace Conservative Burlington, ON

You haven't faced it anywhere else where you've had....

9:40 a.m.

President and Chief Executive Officer, Telesat Canada

Daniel Goldberg

Mexico has restrictions. Outside of Mexico, our larger competitors are Intelsat, Eutelsat, and SES. None of these guys face these restrictions.

9:40 a.m.

Chairman of the Board, Astral Media Inc.

André Bureau

First, a little correction. We don't produce. Our philosophy is to work with independent producers, so we buy programming.

The fundamental issue is the second part of your question. Suppose that tomorrow morning Verizon is authorized to come into Canada and it buys Rogers. All of a sudden, we're negotiating with Rogers, first to have access to Rogers and second to be promoted by Rogers. Third, they package our services with whatever they want. That's the role of the BDU at the present time; they package. They pay us what they think is the value of our service. They charge to the consumers. We have absolutely no access to the consumers. We don't even know who our subscribers are. The BDU controls all of that.

We're saying that they're not just pipes; they're not simply common carriers. Common carriers do not interfere with the content. The BDUs, cable and satellite, like ExpressVu or Shaw, do have an impact on our content because they decide where they will carry us, how they will carry us, whether they will give us a digital slot or only an analog slot, whether they will allow us to be packaged with interesting services or with very low-penetration services. They have the right of life and death over us. That's why they are part of the broadcasting system, because they are intimately linked to our operations and success. They're not just carriers. That's why we say the mere regulation of the broadcasters is not enough. We need to have them considered as part of the broadcasting system and controlled or supervised by the same authority. Otherwise, we could end up not being able to have access to them and we would be left in the cold.

9:45 a.m.

Conservative

The Chair Conservative Michael Chong

Thank you very much.

We'll go to Mr. Masse.