Industry Committee on March 31st, 2021

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you. I'm out of time.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Mr. Lemire, you have the floor for six minutes.

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

Thank you, Madam Chair.

I'll begin with Ms. Tribe from OpenMedia.

First of all, what do you at OpenMedia think of 5G? Will that technology actually provide the innovative connection solutions we're promised for rural and indigenous communities and remote regions? Will 5G provide benefits for those regions?

[Laura Tribe]

Thank you.

I think there is a world where 5G can lead to a lot of innovation for indigenous, remote and rural communities. There's a lot of talk of what it can do for farming communities, for example, and how it can actually help with our agricultural industries. I think the concern I have, and that a number of people have, with 5G is that the promises of what it can do for rural Canada are very far from where we are in actually implementing it in rural Canada.

In the same way that we have seen all other Internet technologies start in the most densely populated areas and work their way out, 5G will follow the same footprint and the same path. We've heard from the companies themselves that they're looking to deploy their 5G technology starting in cities like Toronto, Vancouver and Montreal, and rolling outward from there.

A lot of the talk about what it can do is dependent on not just its first being served to those who already have the best Internet access but its being reliant on things like fibre as the backbone to actually get there, which, as we know through previous conversations around Internet infrastructure, is far from reality in a number of those areas. We're a long way away from there.

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

So you're very much afraid the Shaw and Rogers merger may have a major and negative impact on service rates.

Could you please try to quantify the impact of that merger on customer rates?

[Laura Tribe]

It's hard to predict specific prices, although everyone wants to be able to do that. What Rogers promised for Freedom cellphones, as an example—and this is not just about cellphones, but it will impact home Internet as well—is that for the next three years Freedom cellphone prices will stay the exact same. However, when you actually look at what's been happening in the cellphone market overall, prices have actually been coming down slowly in Canada, slower than they have around the world but they have been coming down. Therefore, even just staying where we are is falling further and further behind, and Freedom itself has been the one that has been helping push Bell, Telus and Rogers to lower their prices.

If you have them locked in, then, and there's no pressure for the other companies to lower their prices, immediately I think you're going to see the effects of that.

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

What do you expect the CRTC and the Competition Bureau to do about Rogers's potential acquisition of Shaw?

[Laura Tribe]

I hope they look at this really closely, and I hope they understand just how big a decision this is and what an impact it will have.

Looking back at how the Bell MTS deal was handled, it's not encouraging, because even though all of the flags were raised about what damage it would do, it was allowed to proceed anyway.

However, I really hope that the CRTC, the Competition Bureau and the minister and cabinet learn from previous decisions and previous mistakes.

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

Thank you very much.

I would put the same question to Mr. Lawford from the Public Interest Advocacy Centre.

What do you expect from the CRTC and the Competition Bureau in the current circumstances?

[John Lawford]

I expect the Competition Bureau to conduct a thorough investigation. We'll be there to advocate consumers' interests. As I indicated in my remarks, it's been proven by means of a rigorous test that this major merger would hurt consumers more than it would promote efficiency gains for both businesses.

As for the CRTC, it has a very limited scope of action in the matter. In fact, it can only rule on the question whether the two companies can switch wireline services. That doesn't change much. This is really a review of broadcasting distribution. So I don't expect the CRTC to intervene. I do hope it will render an earlier decision on its review of mobile wireless services.

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

That's perfect. Thank you. Thanks as well for your effort to answer in French.

I have a second question for you.

There are no signs that Shaw is in financial difficulty. Despite the fact we obviously don't know the reasons for the sale of the business, what you think are Shaw's reasons for selling its operations to Rogers?

[John Lawford]

I'll answer in English if you don't mind.

The Shaw family, of course, is at that stage where they may want to cash out, and they're going to have a seat on the board. It's also, unfortunately, showing the difficulty of mounting a full attack and being a fourth player in Canada. I think it's tiring and it takes a lot of capital, and even with all the advantages they have of being a big, strong cable, they're feeling the heat. However, at the end of the day it's about money, it's a big deal, and they're probably just cashing out.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Our next round of questions goes to MP Masse.

You have the floor for six minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

I've seen this scenario before, starting with Minister Rock. Ministers Robillard, Emerson, Bernier, Prentice, Clement, Paradis, Moore, Bains and now Minister Champagne have had to wrestle with this since I've been here.

In the 1990s, Canada had a regulatory process. Wouldn't it make some sense right now for us to get things in check, and get things in order right now, by bringing in—similar to water and other types of utilities we have, since this is a public asset—some type of a regulatory approach for some base services to settle things down, especially during a time when this is obviously an essential service, as has become so clear with COVID-19, for education, social inclusion and so forth.

As Ms. Tribe noted, we have quite a discrepancy among our aboriginal communities as well. Doesn't it make some sense to perhaps take a pause here and make sure that basic prices are instilled in our regulatory processes?

I'll go to Mr. Lawford first, and then Ms. Tribe.

[John Lawford]

Raising the issue of whether to have either price regulation, which is what I think you're saying, or at least an affordable package for lower-income Canadians hasn't been favoured by the CRTC since the new act came in, in 1993. There have been many proceedings since saying they're getting out of the business of price setting. I think it would be a shock that would require the government to indicate to the CRTC that this policy had to be repursued. To the extent that you can do that in Parliament, I would highly encourage that policy statement from the government, whoever forms it.

In terms of an affordability package, we've been pushing one for years because cellular service, in particular, is out of reach for many Canadians, and we need a subsidy for those folks.

[Brian Masse, NDP, Windsor West, ON]

Ms. Tribe.

[Laura Tribe]

I think you raised two important issues. One is price, and one is service. When you look at remote and indigenous communities, these often go hand in hand, but very often it's so expensive because they are so underserved. The actual service is not available. I think that's where we look at the need to have the government support building the infrastructure.

In this deal there's a lot of talk and promises, but there's absolutely no accountability. There's no transparency into what is currently planned or what would be any different should this deal go through, other than it sounds nice and it's something we need desperately.

I think one of the biggest things we could do for prices for those underserved communities is to make sure they have access, because once you do that and you look at the number of providers over the wholesale regime that are now available, the types of different choices that people have, it's very different from being stuck with a dial-up connection or a single satellite provider. I think that would go a long way, in addition to making sure there are affordability mechanisms in urban areas as well.

[Brian Masse, NDP, Windsor West, ON]

What's often lost in this conversation is that the use of public right of way, be it on the ground or in the air, is a privilege, not a right. It is owned by the Canadian public, and we have complete control at the end of the day on how we want to exercise that in our society and our communities.

Mr. Lawford, you specifically raised the efficiencies defence. I'm not sure everybody's aware of that, but this is archaic. If I'm correct, I think we're one of the last countries to even have this relic because it really is an excuse. We've seen that through the propane case, as an example, where consumers really got the bum's rush at the end of the day and competition was shut down because of, basically, this cleanup that is necessary in the legislation.

[John Lawford]

The efficiencies defence is something that the Business Council of Canada urged be put into the Competition Act when it was reviewed in the nineties. It's an unfortunate appendix that we should really cut out, because we are pretty much alone in OECD countries with that kind of defence.

What it does is.... Even if we go in and prove that a four to three merger is bad, even if we go in and say the wireline control is now going to be in the hands of Bell and Telus and Rogers nationwide and that's not good for competition, if Rogers shows that they're going to, in effect, save money by combining the two, with their capital expenditures and so on, they win. It's like putting your hand on the scale. It's impossible for us to counter that unless we do quite a difficult proving exercise, and the Supreme Court made it even harder recently in a case called Tervita.

We'll try, but it is something that Parliament should re-engage with.

[Brian Masse, NDP, Windsor West, ON]

To Ms. Tribe, I have a lot of faith in the capabilities of the Competition Bureau. They have some excellent women and men working there, who have done some tremendous work.

They have, though, been on the record, coming in at different times—I don't need to read through all the ministers again—asking for more resources or for enhanced resources.

I'm worried about their not having the tools necessary to delve in and also to be respected. Do you have any concerns about that, or am I just basically on the wrong side on that particular point?

[Laura Tribe]

No, I would agree with you.

I think it is well past time to look at the Competition Act, at the powers of the competition commissioner and at what the bureau is able to do, to look at what competition actually means in this country.

When you look at a number of industries, telecom being an excellent example, there is a long history of oligopolies or government-sanctioned monopolies that do not provide the competition that I think we would like to believe the bureau is there to support.

[Brian Masse, NDP, Windsor West, ON]

I know that I'm running out of time, so very quickly, Mr. Andy Kaplan-Myrth, is TekSavvy going to be part of the spectrum auction coming up? Do you have any thoughts as to whether it should be delayed?

[Andy Kaplan-Myrth]

I think I am out of time, and I'm not sure that I can actually speak to it. Maybe I'll leave that there, and maybe we can get back to it.

[Brian Masse, NDP, Windsor West, ON]

I'll try to get back to you next time.

Thanks, Madam Chair. I appreciate it.

[The Chair, Liberal, Sherry Romanado]

I think that was a “saved by the card”. I think he was playing that one.

For our next round of questions, we'll start with MP Kelly.

Welcome to INDU. You have the floor for five minutes.