Thank you, Alain.
Others have explained the interconnectedness between Canada's telecommunications and cable companies. All the big players now offer wireless and home telephone, radio and television services, and the Internet. Between Canadian cable companies and broadcasters, all the big players own services that produce, acquire, and schedule television programs and movies.
We don't have time to fully explore the international trade implications of opening up our foreign ownership rules; however, we are extremely concerned about the implications of NAFTA--notwithstanding the so-called cultural exemption--and specifically its chapter 11, which provides foreign investors with a right to sue the Canadian government and seek compensation for government actions. This includes those regulatory agencies such as the CRTC, which investors believe violate their rights under NAFTA.
So what are we concerned about here?
First, in relation to NAFTA overall, we would point out that the so-called cultural exemption is limited in scope to the cultural industries that existed at the time. Importantly, this did not include the new media sector, such as interactive television, computer games, and so on.
Second, chapter 11 rights could potentially come into play in two ways. If the rules in telecom were changed, a foreign company that decided to invest in a Canadian cable company or broadcaster could structure a deal in a way that would mirror the new telecom rules. If the CRTC were to prevent them from proceeding, they could launch a chapter 11 challenge on the basis that they were being treated unfairly in relation to a direct competitor operating in the same marketplace.
If foreign companies are permitted to enter, or force entry, into Canada's broadcasting system, existing rules and regulations relating to the production and distribution of Canadian content productions may be sustainable since the foreign company is entering the market when those rules exist. But if the CRTC or the government were to try to update the rules to reflect a new environment, the foreign company now operating in Canada might have a cause of action under chapter 11.
CCA continues to believe that some regulatory requirements should apply to all platforms with respect to the production and exhibition of Canadian programs. If such a policy were to be adopted, it might be unsustainable with respect to foreign-owned companies.
There are, of course, other reasons to maintain the current restrictions on ownership. We will leave it to others to point to the threats to Canadian sovereignty and simply note that most of our major trading partners, including the E.U. and the U.S., also maintain foreign ownership limits, particularly in broadcasting, which is deemed to be a sector of vital national interest. Subjecting Canadian communications infrastructure to foreign ownership or control presents a substantial risk that foreign national interests may dictate how we can use this infrastructure, a point that has been made clear on several occasions within the past century.
Alain.