Industry Committee on March 29th, 2021

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Okay, perfect.

My next question is for Mr. Natale, then.

We are looking at this transaction as parliamentarians. I'm sure a lot of Canadians, as well as people working in the industry, are watching our deliberations here today. Personally, I'm a businessman, so you don't have to convince me that mergers are sometimes necessary to expand certain businesses or industries quickly.

However, we're hearing some conflicting information today, so I want to give you an opportunity to clarify a few things.

You say your prices are in the middle of the price range. My assistant told me about price increases Rogers has imposed on its customers over the past few years, coming in at roughly $25. Nevertheless, price is an important factor for all Canadian consumers.

I'd like to give you the opportunity to explain what's really going on. I have no doubt whatsoever about your intentions. That being said, if the deal goes through, the number of major players in Canada could go from five to four, or even three. That is a reality that Canadians may have to live with. How would such a change affect prices and service to Canadians over the long term?

In addition, Canada's population density is low, despite being the third largest country in the world. Implementing the system over such a vast area requires expensive infrastructure.

What arguments would you make to convince us and everyone watching today that this transaction is justified and to prove that it would benefit all Canadians?

[Joe Natale]

I'll start by saying that we're on the doorstep of a very important time in our history in the telecommunications industry. It is the same doorstep we faced in 1999 when people started talking about the Internet and whether there was a market for it. It is the same doorstep we faced in the 1960s when we started talking about whether cable TV had a market. It is the same doorstep we faced in 1985 when we wondered how many Canadians might actually want a wireless device. If I dusted off the business cases of all those different moments in time, we would see that we were dead wrong, in every estimate, in terms of the importance and quality of the capability and adoption that was important to Canadians.

We're on that doorstep again. This is the doorstep of 5G, and 5G will fundamentally change our nation and our ability to participate in the digital economy. This is really about nation-building. That's what's at stake here more than anything else.

The ability to drive 5G will lead to more affordability and lower wireless prices. It will also, importantly, create the capabilities that are important to our nation, whether they are in health care, transportation, the resource sector, oil and gas, agrotech or the technologies that will change our productivity and our capability as a nation. If these two companies come together, it will give us the opportunity to contribute in those ways and deliver on the 5G promise. That's the doorstep we're on and the importance of what we're up to.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Rogers employs 3,000 Quebeckers and has two million customers in Quebec, and yet Quebec is not really part of Shaw's business plan. Do you intend to—

[The Chair, Liberal, Sherry Romanado]

I'm sorry, Mr. Généreux, but you're out of time.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Oh, my goodness.

[The Chair, Liberal, Sherry Romanado]

We'll now go to Mr. Ehsassi for the final round.

Mr. Ehsassi, you have five minutes.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you, Madam Chair. I will ask Mr. Natale a question.

I have to say, sir, that I'm very much confused. On the one hand, you've essentially been arguing, not only today but also in the media, that there is very little overlap between Rogers' operations and Shaw's operations, whether in market segments or in services. On the other hand, you're saying that consumers should be cheering you on and they should be very much looking forward to this.

If there are no overlaps and there are no efficiency gains, so to speak, how could you possibly argue that there will be savings and that those savings will be passed on to Canadians?

[Joe Natale]

You're right that there is minimal overlap, but there are incredible complementarities to the capabilities of the business. I'll give you the most important one as an example: Shaw has spent five decades building an extensive fibre network throughout every major city and medium-sized city all through western Canada.

[Ali Ehsassi, Liberal, Willowdale, ON]

Mr. Natale, do you believe in trickle-down economics? Is that essentially what we're supposed to believe?

[Joe Natale]

No, it's not based on any economic theory. It's just based on the fact that we would have to spend a few billion dollars of Rogers capital to replicate that fibre network. By coming together, we can leverage that fibre network and extend it further into rural Canada, and we can also leverage it as the backbone for 5G capability, because 5G only works with a very extensive fibre network. Right there, there's a massive synergy—

[Ali Ehsassi, Liberal, Willowdale, ON]

You're saying, given all the investments that have to go into 5G, that all Canadian companies should be now acquiring one another and gobbling each other up.

[Joe Natale]

I'm saying that we're on the doorstep of a very important investment cycle and the onus is on us as Rogers and as Shaw to look at the possibilities and opportunities to deliver on 5G and deliver on the rural opportunity—

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you, Mr. Natale.

Mr. Shaw, I have the same question. If there are no efficiency gains and no overlap between the services, essentially speaking, that you offer and that Rogers offers, why would there be savings for Canadians?

[Brad Shaw]

Well, listen, just as Joe said so well, I think there's a real opportunity here for us to be able to put our capital together, and the balance sheets and the two companies with [Technical difficulty—Editor] to have that capital dollar extend all the way through to rural, remote, indigenous and 5G, because.... As you know, we have prided ourselves on being able to serve and deliver the products and services Canadians want. I think this is an opportunity to accelerate that and actually provide an opportunity and a doorstep that will truly make Canada even more competitive and really drive economic growth and jobs.

I think those things are so fundamental and key, because we're a builder. We're a family that has always looked at that and has always done that. This is an opportunity. As some of you know, Yogi Berra said that if there's a “Y” in the road, you should take it. We have fundamentally believed that this is the right thing for us to do in western Canada, and when you can drive connectivity that way, I think it's terribly exciting.

[Ali Ehsassi, Liberal, Willowdale, ON]

Mr. Shaw, it might very well be the right thing for you to do, and it might be very well the right thing for Rogers to do, but we're concerned about consumers. Why is it the right thing for consumers?

[Brad Shaw]

I think this opens up new doors. With any capital investment, you have an opportunity to drive competition, innovation, new products and services and really, I would say, make that digital divide a lot smaller for all of us.

[Ali Ehsassi, Liberal, Willowdale, ON]

You're asserting that less competition leads to more innovation. That's your—

[Brad Shaw]

The right competition, dynamic competition adds to that. It doesn't have to be a number of players. I think that when you have that dynamic competition in the market, the federal government will be able to create the policies to be able to do that. We still have a regulatory overhang—

[Ali Ehsassi, Liberal, Willowdale, ON]

But this proposed merger undermines competition. Surely you would agree with that.

[Brad Shaw]

No, I don't agree.

[Ali Ehsassi, Liberal, Willowdale, ON]

You don't agree that this proposed acquisition would diminish competition.

[Brad Shaw]

No. I think it's going to drive it in a way that is terribly exciting for Canadians.

As you look at investment cycles, you don't want to underinvest. If you're underinvesting, then you're not actually going to be delivering to Canadians what you wanted to deliver. I think this is what it's about. It's about driving that investment.

[Ali Ehsassi, Liberal, Willowdale, ON]

You're driving this merger because of your concern about Canadian consumers rather than your shareholders. That's what you're telling us today.

[Brad Shaw]

Oh, absolutely. As I said in the opening statement, we're all about consumers. That's our lifeblood. That's everything we do and everything we've been successful for. We all want to make sure—

[The Chair, Liberal, Sherry Romanado]

My apologies. We really are out of time. That is our time for today.