Evidence of meeting #29 for Industry, Science and Technology in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was spectrum.
A recording is available from Parliament.
3:25 p.m.
Liberal
The Chair Liberal Sherry Romanado
Thank you very much, Mr. Lemire.
Our next round of questions goes to MP Masse for two and a half minutes.
3:25 p.m.
NDP
Brian Masse NDP Windsor West, ON
Thank you, Madam Chair.
Mr. Boswell, with regard the year-long review that you're able to have, how does that compare with the United States and Europe? I'm just curious about that. You have a year to do that. How does it compare with your peers?
3:25 p.m.
Commissioner of Competition, Competition Bureau
That statute of limitations doesn't exist in the United States with respect to merger transactions. They can go back after a period of time and re-examine them or reopen them, and that has taken place in the United States. It's not something they do lightly, obviously, for the business community, but there is no one-year....
I cannot say with certainty, sir, what the situation is with respect to the European Commission directorate general on competition. Perhaps Mr. Durocher or Ms. Wright can chime in on that, if they know the exact answer.
3:30 p.m.
Deputy Commissioner, Competition Promotion Branch, Competition Bureau
I'm afraid I'm of no assistance with respect to that question.
3:30 p.m.
NDP
Brian Masse NDP Windsor West, ON
That's okay. I mean, our best comparator is here with the United States anyway, given our integrated economies and so forth. I think members here see a trend developing with regard to consumer protection and competition in Canada versus a country that we have quite a bit of connection with economically, socially and culturally.
Perhaps I will move quickly back to the CRTC. Mr. Scott, do you feel that you have appropriate resources to compel decisions in a quick and timely manner? The odd timing of this takeover merger towards a spectrum auction puts a squeeze that's untenable for everyone. Past that, though, I'm just curious to know whether you have the capability to do quick and orderly reviews for yours.
3:30 p.m.
Chairperson and Chief Executive Officer, Canadian Radio-television and Telecommunications Commission
Madam Chair, I'd be lying, and Mr. Seidl who runs the telecommunications branch would probably come and threaten me thereafter if I said, “No, we're all good, we have tons of resources.” We are fully deployed. We are very busy, but we have adequate resources. These are large, complicated proceedings and they do take a long time. The COVID situation has prolonged it, as we made sure that carriers that were part of our proceeding had the requisite focus on ensuring that services to Canadians continued and they weren't preoccupied with meeting our deadlines.
Generally speaking, we do have the resources and we do render timely decisions, recognizing that this has been a long process.
3:30 p.m.
Liberal
The Chair Liberal Sherry Romanado
Thank you very much, Mr. Scott.
Our next round of questions will go to MP Généreux.
You have the floor for five minutes.
3:30 p.m.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Thank you, Madam Chair.
Thank you to all the witnesses for being here today.
Mr. Scott, we have heard a number of comments related to the CRTC, some good, some not so good.
Mr. Natale from Rogers expressed the idea that the arrival of 5G in Canada was a turning point in the development of technology in Canada. He compared it to the arrival of cable, or even the advent of television, and then cable Internet. For people of our generations, these are all things that have been important in the development of Canadian society.
In your opinion, is the arrival of 5G truly a cornerstone in the development of technology in Canada?
3:30 p.m.
Chairperson and Chief Executive Officer, Canadian Radio-television and Telecommunications Commission
The short answer is yes. I think 5G technology is really... I'm looking for the right word in French to say it.
It is a step function change. It is not only the speed, but the nature of applications and the proximity of devices to their antennae that will permit a wide range of applications that don't exist today.
3:30 p.m.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
In my riding, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, there are people who ask me for 1G. So we are far from 5G.
3:30 p.m.
Chairperson and Chief Executive Officer, Canadian Radio-television and Telecommunications Commission
Oh! I see.
3:30 p.m.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
The fact that there are not many players in the field makes access difficult. If I have time, I'm going to speak later to the people who issue spectrum licences. Accessibility is a fundamental issue in the provision of services in Canadian regions. We know that the territory is very large and that the population density is low in some places.
Do you think the rates we pay in Canada are reasonable, too high or completely unreasonable? You're in a good position to tell us, because the CRTC certainly gets complaints. In fact, I would like to know if you receive many complaints about the rates in Canada. We hear that we pay way too much in Canada, but is that the truth?
3:35 p.m.
Chairperson and Chief Executive Officer, Canadian Radio-television and Telecommunications Commission
Thank you for the question.
On the spectrum, I will leave it to my colleague from ISED to answer.
But for our perspective, let me answer the last part first, which is are prices too high? I think the question is, should they be lower? The answer is yes. I'll always answer that way. It is to the benefit of Canadians to have the lowest possible prices.
As to the deployment of services, that's one of the reasons that we have a discrete broadband fund, and the CRTC's broadband fund can also be used and is also used to deploy or support the deployment of wireless services to cover highways and secondary highways, so we are endeavouring to do so.
The question of spectrum I would defer to my colleague, Monsieur Dagenais.
3:35 p.m.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Dagenais, not only in the course of our study, but elsewhere as well, I have heard that portions of the spectrum had been purchased by companies that ultimately did not use them. However, it did add significant value to their business. If I'm not mistaken, I think that's the case with Shaw Communications, which is the subject of the transaction we are examining today.
Is it normal for companies to have access to portions of the spectrum that they will not use?
3:35 p.m.
Senior Assistant Deputy Minister, Spectrum and Telecommunications Sector, Department of Industry
Thank you for the question.
No, this is not normal. When we do spectrum auctions, we impose deployment conditions. For example, in the auction that's coming up in two months, there will be deployment conditions attached to the award of the licences. We check after five, 10, 15, 20 years to make sure that companies that buy a portion of spectrum are not just reserving it without using it.
Ultimately, the main objective is to get the spectrum into the hands of companies that will use it and provide services to Canadians. If they don't meet the conditions of deployment, we have the ability to take away their licences.
3:35 p.m.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Have you ever withdrawn any?
3:35 p.m.
Senior Assistant Deputy Minister, Spectrum and Telecommunications Sector, Department of Industry
We have already had several discussions with Internet and telecom service providers regarding deployment conditions.
3:35 p.m.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
So you are telling me that the conditions have always been met.
3:35 p.m.
Senior Assistant Deputy Minister, Spectrum and Telecommunications Sector, Department of Industry
I said we had had several discussions. Generally, the problem was resolved afterwards.
3:35 p.m.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
You will understand that I, in a...
Madam Chair, you're showing me your red card, but I would prefer it to be green.
3:35 p.m.
Liberal
The Chair Liberal Sherry Romanado
Thank you very much, Mr. Généreux. We may get a chance to do a fourth round and you may still have time.
We'll now go to MP Jowhari for five minutes.
3:35 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Thank you, Madam Chair, and to the witnesses for your testimony today.
Mr. Boswell, maybe I can start with you. Yesterday, as I'm sure you heard, a representative from the CNOC, Madam Shaban, raised some concern regarding the efficiency defence. She indicated that use of the efficiency defence might render this whole process of review fruitless.
Can you share with us your thoughts on that and the applicability of the efficiency defence in this case?
Thank you.
3:35 p.m.
Commissioner of Competition, Competition Bureau
Madam Chair, the efficiencies exception is set out in section 96 of the Competition Act. It's available for use on any merger in Canada, and effectively it says that where efficiency gains are likely to be brought about by the merger and are greater than and offset the anti-competitive effects, that will carry the day, and even if there is a finding of substantial lessening and prevention of competition, the merger will be allowed to proceed.
That is in the Competition Act today. My job, which I took an oath to do, is to administer and enforce the act to the best of my ability, so when it comes to the efficiency exception, it's something that does come into play.
The onus, I should say, is on the parties to prove the efficiencies. There are five layers they have to go through to establish what we call “cognizable efficiencies”. They either have to prove there are those, at the Competition Tribunal on a balance of probabilities, or they can advance the efficiencies exception with the bureau—and I'm talking generally here—in connection with our merger review.
We have been very clear lately—and I have been very clear—that this is a very serious exercise of enforcement discretion to approve an otherwise anti-competitive merger based on the efficiencies exception, so we have made it very clear in a model timing agreement to parties that if they are going to rely on the efficiencies exception, they are going to have to commit to providing the bureau with ample time, reasonable time, to thoroughly scrutinize the efficiencies they are advancing and to cross-examine under oath representatives of the merging parties to really dig down on those efficiencies. However, it is a reality in Canada's Competition Act, and Canada is really the only country that has this particular specific provision that allows an otherwise anti-competitive merger to go forward based on efficiencies.
3:40 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Is this an area that you are going to consider re-evaluating when the Competition Act is up for review?
3:40 p.m.
Commissioner of Competition, Competition Bureau
Madam Chair, what I can tell the honourable member is that this particular provision of the Competition Act has been the subject of significant debate since it came into place in 1986. It's controversial both inside and outside Canada. Certainly from the perspective of the person who administers and enforces the act, I think it would be worthwhile in this country to discuss this particular section of it. That's for parliamentarians.