Industry Committee on May 2nd, 2013

[Geoff Regan, Liberal, Halifax West, NS]

Thank you, Mr. Chair.

Welcome, ministers.

I appreciate the fact that you did not use the 10 minutes you were both allotted.

We've already had mention today of the changes in the budget implementation bill, Bill C-60, to the Investment Canada Act. That is interesting, but I know of at least a thousand Canadians and their families who would prefer to see you enforce the current law, and I'm referring of course to the U. S. Steel situation. From what I understand and what I've heard, the workers in that plant consider your claim that this is only a provincial labour dispute to be an insult.

So why haven't you forced U. S. Steel to live up to its commitments to maintain jobs in Canada? Why aren't you enforcing the existing Investment Canada Act?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

When you say it's an insult, it depends on whether you take a demagogue approach or not. I think, with all due respect, you are taking a demagogue approach. You know exactly how the law works. First of all, you have sensitive commercial issues. You cannot put the deal in front of the public; otherwise nobody would come and invest here. So you have some sensitive commercial issues that you have to keep confidential.

That being said, when U. S. Steel acquired Stelco, we had solid requirements. When it was not compliant, we did not hesitate to sue. It was the first time a government did that. Our Conservatives did that. The Liberal government never did that before.

[Geoff Regan, Liberal, Halifax West, NS]

But they aren't maintaining the jobs now. So what are you doing about the situation now?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

I'm getting to that point. Now, as you said, this is a labour dispute under provincial jurisdiction. What we have to do here is fully assess the situation to make sure. We expect they will negotiate in good faith. This is what they have to do, and this is what we expect them to do.

[Geoff Regan, Liberal, Halifax West, NS]

Let me go on to the spectrum auction in November. How much has the government set aside, in the main estimates, for the cost of conducting the spectrum auction in November? Will any of those proceeds be used by Industry Canada to foster more competition in the wireless sector?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

It's part of the internal operations. It's part of the budget. There's no special envelope for that. This is part of the hard core mandate from the department.

[Geoff Regan, Liberal, Halifax West, NS]

So you can't tell us how much you expect it to cost to run that auction.

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

We put in the necessary resources, as we did in 2008 and it worked. It comes from the operating budget, and I see the CFO saying the money is there and we have all the resources needed to do it.

[Geoff Regan, Liberal, Halifax West, NS]

That's great, but we're reviewing the estimates, so the idea is to know or be able to find out what the numbers are.

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

I agree, but you have the numbers here. This is part of the operating budget.

[Geoff Regan, Liberal, Halifax West, NS]

But we don't, actually, in relation to this issue.

Let me go on. As you probably heard, there's a feeling among industry analysts that the auction this fall will not provide adequate competition for the big three incumbents. In fact, in Barcelona, you acknowledged that the hoped-for injection of cash from foreign companies or elsewhere hasn't yet materialized.

You urged foreign telecommunications companies to invest in our telecommunications or in our wireless sector. There have been reports that the uncertainty around the rules regarding the transfer or sale of spectrum is a major hurdle to getting foreign investors on board.

What will happen this fall if players like Mobilicity and Wind Mobile, decide for one reason or another not to participate in the spectrum auction? Do you have a plan B?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

We are confident we will get four players. The reason is quite simple. We put a cap, and the incumbents cannot get the fourth paired block. Somebody will go and bid on this. This is a no-brainer. We think this policy works.

Just to go back, in terms of numbers, I told you today in the House of Commons that the prices dropped down by 18% on average from 2008. I said that was StatsCan data, but I want to correct that. It was not from StatsCan but from a Wall Communications report.

[Geoff Regan, Liberal, Halifax West, NS]

Who?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

Wall Communications, it was commissioned by Industry Canada and the CRTC. I just wanted to clarify that on the record.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you. Are you suggesting that, if you were to go out on the street right now and talk to people walking by, they'd be satisfied that we have low cell phone prices in Canada?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

I would tell them that now, when we compare—

[Geoff Regan, Liberal, Halifax West, NS]

What would they tell you? That's the question.

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

I would tell them that, when we compare with our peers, we are in the middle average. We dropped down by almost 20%, and this is a work-in-progress. We will continue. We are dedicated to having a fourth player, and we will do whatever we can in terms of policy to achieve this. Frankly, so far time has given us reason—

[Geoff Regan, Liberal, Halifax West, NS]

Wind Mobile said that the limited amount of spectrum available to them and to the smaller players makes it tough for them to bid in the auction in November.

In fact, we have a situation now where all three new entrants are in financial distress or up for sale. For instance, business people like Newton Glassman, of Catalyst Capital Group Inc., have said that if you really want a fourth provider, you need a clear wireless policy. Obviously, he doesn't think that you have one. Mr. Glassman would also like to see you start to enforce the rules on issues like access to towers and domestic roaming.

Why have you failed to put in place, or to enforce, the strong policies that markets are demanding?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

First of all, I think we’ve succeeded. We announced the spectrum outlook, which is the road map for the next five years. When you ask the smaller players what we can do to help, the matter-of-life-and-death to them is cash, it's capitalization. When they know that spectrum is coming, it is easier for them to capitalize. This is why we launched this road map here, which was appreciated.

[Geoff Regan, Liberal, Halifax West, NS]

There's no sign of it.

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

I want to point out that if you go business to business, one by one, they will each tell you a different version. They feel that the role for government is to have a balanced approach. When you announce a policy and nobody is cheerleading and nobody is very angry, it means that you have struck a balance, and this is exactly—

[Geoff Regan, Liberal, Halifax West, NS]

When nobody is investing in these companies, it's not a very good sign. These companies are in financial distress and nobody seems to want to invest in them.

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

There were investments and there are new players, and prices went down by 18%. They will continue down this road.

When you talk about the roaming and the tower sharing, we announced broader measures, and if we have to intervene more, we will. For now, the measure that we proposed came.... These are solutions and comments we received from the industry—

[Geoff Regan, Liberal, Halifax West, NS]

I'm hearing from industry—