Industry Committee on Jan. 26th, 2021

[Jonathan Daniels]

I can't speak directly to the exact Connect to Innovate projects. What I can say is that we were on target and on time with all of our Connect to Innovate projects. Most of them have been completed.

You mentioned southern Ontario. That can only be a reference—just to be clear—to what we were successful in bidding for. I can assure you, we bid and lost in many of the other areas in the country. When you talk about, for example, Nova Scotia, we've been active in working with the provincial government in applying successfully for funding to build out fibre to the home there as well. We'll continue and we'll have many applications. In fact, for February 15, we are working on the UBF for a whole bunch of regions, including Ontario. We are applying to ICON this week for Ontario, and we also have applications in to the CRTC for Ontario.

[The Chair, Liberal, Sherry Romanado]

Thank you very much, Mr. Daniels.

We now move to MP Erskine-Smith.

You have the floor for five minutes.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Thanks very much.

Mr. Malcolmson, you've heard frustration from all parties now, I think, about B.C accessing the wage subsidy. I have the information in front of me but I really must be reading it incorrectly. I just want to confirm.

B.C. received $122.8 million in the federal wage subsidy. Is that right?

[Robert Malcolmson]

Yes, that's correct. If you look at the breakdown of where those funds went, $71 million—give or take—went to Bell Media.

As I mentioned, Bell Media was one of the operations that was hardest hit by the pandemic. I'll give you an example. Advertising revenues—which Bell Media is dependent upon in that media business—plummeted by over 30% just in Q2, 2020.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

I have limited time but I do appreciate that and I took the point that jobs would have been lost but for the federal wage subsidy of almost $123 million. This is where I'm a little confused. I'm reading a B.C. news release from Q3, 2020, saying B.C. has a strong financial position with $5.2 billion in available liquidity at the end of Q3; 10% Internet revenue growth; 4% growth in year-to-date cash flows from operating activities; and a 13.7% higher free cash flow, which actually translates, from my reading of the news release, to a 5% increase in the Q4 dividend.

Instead of accessing that available liquidity, instead of perhaps not increasing that dividend, did you think it best to access public funds?

[Robert Malcolmson]

No, we participated in a government program that was very well designed and intended to keep Canadians working at a critical time. We participated in that program commensurate with the impact that the pandemic was having upon our workforce.

I have to say that when you quote our financial results—and I don't do math as quickly as you do—you do have to remember that to build Canada's networks, to invest in 5G, to have fibre rolled out to 5.6 million households and to target wireless home Internet to reach a million households, you need investment capital. The only way you get investment capital is from shareholders willing to invest their money with your company in order to fund your network expansion.

If we don't have investment capital and if we're not delivering shareholder returns, Canada will not have the level of investment required to build the networks that we need in order to—

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

That's a long way of saying, though, that where main street businesses are getting crushed in a pandemic, you see increased dividends. You could have gone from $5.2 billion in available cash flow down to $5.05 billion in available cash flow, and you would have blinked. Whereas, we have main street businesses getting crushed, unable to access some of the necessary supports, and here you are increasing dividends.

I take it, though, you would not have reformed, so that a profitable company like yours, with $5 billion in available cash, wouldn't continue to receive millions of dollars in taxpayer funds, but you like it just the way it is.

On a separate note, access to the Internet, both broadband and wireless, does BCE view access to the Internet as an essential service?

[Robert Malcolmson]

Yes, it is essential for Canadians, particularly at a time like this.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

When we look at the broadband space, resellers have existed in the market for quite some time. Do you oppose the reseller marketplace?

[Robert Malcolmson]

The reseller marketplace undermines investment. There's absolutely no debate about that. Their business model is based on accessing networks that someone else builds, in our case Bell, and using those networks to provide service to consumers. If you look at what we need, as I said in my opening remarks, we need ubiquitous connectivity quickly for all Canadians. The only way that's going to happen is through companies that are willing to invest.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

So—

[Robert Malcolmson]

Just let me finish. I'll give you a couple of stats. We as an industry—and I'm talking about facilities-based carriers—invested in the range of $46 billion, while the reseller community invested $150 million. Which one of—

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

And yet, another part of the equation, Mr. Malcolmson, is price, accessibility, but also affordability, which is a key component of accessibility. Without the resellers, you would gouge Canadians even worse.

[Robert Malcolmson]

I'm not going to comment on that. I'm not sure it's a question.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

It's not a question; it's a fact. I appreciate your time.

[The Chair, Liberal, Sherry Romanado]

We now move to Mr. Lemire.

You have the floor for two and a half minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Madam Chair.

Mr. Malcolmson, Télébec and Cablevision have been wholly owned by Bell for 20 years, since 2001. This transaction was approved by the CRTC. The public notice states that the proposed transaction serves the public interest.

I'm still trying to figure out how this transaction has served the people in my area, where Internet service is ranked among the most expensive in the world and where people live in one of the least connected areas. These people don't have access to the prices listed in Bell advertisements. However, when they file a complaint with Cablevision, they receive a response in a letter with the Bell letterhead.

Could you provide the price chart for Bell companies?

[Robert Malcolmson]

I have to apologize, because I wasn't getting the translation. I believe you were asking, is Bell acquiring companies and achieving scale? How is that good for your area and good for Canada?

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Madam Chair, I want to go back to my question.

[The Chair, Liberal, Sherry Romanado]

I stopped the clock. Can you repeat your question, please?

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you.

My question is the following. Could you provide the price chart for all Bell companies?

[Robert Malcolmson]

All the prices we charge for our various wireless, home Internet, television services, is that what you're asking?

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Yes.

[Robert Malcolmson]

That would be a tall order. Those retail prices are all public, because retail customers are buying those services. I'm not quite sure how to answer your question.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Could you send me a letter stating the official prices charged by Cablevision, Télébec and Bell, and the reasons for the price variances, particularly in my area, Abitibi-Témiscamingue? What parameters make prices vary in my area, in Quebec and in other parts of Canada?