Industry Committee on March 18th, 2024

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

Thank you, Mr. Chair.

Thank you to the witnesses.

Mr. Bibic, if I understand correctly, Bell has invested $23 billion over the past four years and Rogers has invested about $40 billion. I didn't get the exact figure for Telus, but I imagine that the combined amount is about $75 billion.

However, I understand that you made the decision to withdraw from investments that you were going to make right away, and perhaps in future as well, because the government, the CRTC or both did not provide you with an environment conducive to investment. Can you explain what you mean by an environment conducive to investment?

[Mirko Bibic]

Thank you very much for this fundamentally important question.

As I mentioned at the outset, we inject $5 billion a year into the Quebec economy. I mentioned the fibre optic network that we rolled out in Trois‑Pistoles, Saint‑Côme, Lac‑Beauport and all over Quebec, in places such as Shawinigan, Saguenay—Lac‑Saint‑Jean and Thérèse-De Blainville. It's a very long list.

We want to do more, but the CRTC recently imposed a decision that forces us to give our competitors, even dominant ones, access to our infrastructure in Quebec and everywhere else.

In Quebec, two major cable companies dominate the Internet services market. They have by far the largest market share. What we're trying to do is put in fibre optic infrastructure to encourage competition in communities across Quebec and Canada. The CRTC tells us to invest tens of millions of dollars in community after community and then let a competitor use our network once we've set it up. That competitor is then able to compete with us without our having a single subscriber. That takes away our return on investment, and we've had to invest less as a result.

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

Mr. Bibic, you are obviously talking about Videotron without naming the company. Mr. Péladeau was indeed very critical of his competitors, including you, on the issue of increasing competition. Are you afraid of competition? If I understand correctly, you are saying that you cannot get a return on those investments. However, at the end of the day, it's consumers who have to pay their cellphone bills. How is it that you are not able to continue investing despite the CRTC decision?

[Mirko Bibic]

We want to introduce competition, especially in Quebec. We're rolling out fibre optics. We have the best network. We're cutting prices. Bell is cutting prices for Internet services from Manitoba to Newfoundland and Labrador. We're cutting prices, especially in Quebec. Cable companies are finally facing tough competition. They need to improve their own networks. They must cut prices to compete with Bell.

We want to do more. However, when we reach the more remote communities, construction costs are very high. When the CRTC imposes a decision of this nature, the return on these investments in more remote areas, where construction costs are very high, makes it impossible for us to invest at the same pace as before.

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

Mr. Bibic, have you received any government subsidies?

I'm asking you this question, but I would also like to put it to the other two witnesses. They're also presidents and chief executive officers of major Canadian companies. Have you received federal government subsidies in the past four years to make these investments?

[Mirko Bibic]

We're working in partnership with all levels of government to share the cost of construction in remote areas. When we received subsidies, we met expectations.

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

What percentage of the subsidies have you received? What amounts can you disclose?

[Mirko Bibic]

I don't have the figures on hand.

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

If possible, I would like you to send this information in writing to the committee. I have the same request for Mr. Staffieri and Mr. Entwistle.

[Mirko Bibic]

I can tell you that the information on the funding received under these subsidy programs is available in the Public Accounts of Canada.

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

I would still like to hear from the companies themselves how much money they received in the past four years to make these investments. Canadians want to know how these subsidies lower prices. In particular, the subsidies are supposed to lower the cost of their cellphone bill, which isn't always noticeable. In any case, Canadians want to see these price reductions.

Mr. Staffieri and the president of Telus, I would like you to answer the same question.

[Tony Staffieri]

We do receive and have received, in particular over the last few years, subsidies and grants from the government to build out rural and indigenous communities. That's been more about accessibility than affordability. We have not received any material grants or subsidies that are focused on affordability for Canadians. We've done that as an industry through efficiency and productivity gains.

In terms of the amounts, it will depend on a region-by-region basis as we build out these communities across the nation. In some areas—in particular, we can look at some of the coverage work we've done in B.C. on Highway 16 and Highway 14—much of that is without government assistance. As an industry and certainly at Rogers, we are a net payer of taxes and fees to the government while we continue to bring down prices and improve accessibility and coverage and reach.

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

How about Telus?

[Darren Entwistle]

Telus has done significant deployments in terms of broadband wireless and wireline within our rural communities.

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

Did you get subsidies? That's my question.

[Darren Entwistle]

I'm getting to that. In terms of 507 rural communities that we've connected and 577 indigenous communities that we've connected, almost half a million rural households, the preponderance of that we've done of our own volition, on our own cost base, but we have collaborated as well with the Canadian government in the connecting Canadians program. We've had federal support to extend our broadband network to some of those communities.

I would be pleased to file those amounts with you. They are modest in nature relative to the overall spend.

[The Chair, Liberal, Joël Lightbound]

Thank you.

MP Gaheer, the floor is yours.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

Thank you, Chair.

Thank you to the witnesses for appearing before the committee.

We know that wireless prices are going down. The data shows it. It's practically undeniable. I'd like to thank the witnesses. I believe in giving credit where credit is due. I'll also give credit to the current industry minister and the previous industry minister for their work on this file.

My question is for Mr. Bibic with regard to Bell Media. Earlier this year, we heard that Bell Media was cutting 4,800 jobs. The company was selling 45 of its radio stations. This is on top of the cuts from last June, when 1,300 jobs were cut and I think nine different radio stations. Bell Media went on the record to say that it's blaming regulators and policy-makers for these cuts. I felt that there was a bit of scapegoating going on.

In this age of misinformation and disinformation, where we see democratic backsliding across the world, where democracies are being targeted by misinformation, wouldn't you agree, Mr. Bibic, that media companies have a role to play? You're still making billions of dollars. These companies are very profitable. Wouldn't you agree that companies have a bit of a role to play to make sure that our news infrastructure stays intact so that we can fight against that misinformation and disinformation?

[Mirko Bibic]

That's a great point, and it's a fundamentally important issue to have credible news in an age of disinformation.

I'd like to clarify some of the facts, though, as they relate to Bell Media. Fully less than 10% of the most recently announced job cuts were in the media division. The large majority of those unfortunate job reductions were not in media. It's the same thing with the reductions from 2023. Mention was made of 1,300. They were all unfortunate but they were not all at Bell Media. In fact, the minority of those job reductions were at Bell Media.

The fact of the matter is that when it comes to the media business generally and to news as well, what worked three years ago or five years ago or 10 years ago in Canada no longer works so we have to adjust. Our advertising revenues declined by $140 million in 2023 compared to 2022. That's a massive reduction in revenues. Our CTV network across the country incurred $185 million in operating losses last year despite the fact that CTV is the most watched news network. I've shared the next statistic publicly many times: We incur more than $40 million in losses in use per year.

Despite that, we continue to invest in news and we continue to invest in our media division. We deliver more news than we are required to by regulation and we just shifted how we do news. We're now on all the time. We're making sure we disseminate news from our skilled journalists at every point in time during the day over our digital news platforms, and then also at particular points in time on our conventional broadcast network as well. We're completely invested in continuing to deliver world-class news and to be number one, but we had to adjust how we operate.

We are right now operating in an environment in which our competitors are no longer the traditional competitors that you would think of. Typically you'd think of Global and CBC/Radio-Canada. We're now competing in the news realm against Meta, Google, Facebook—which is Meta—Snapchat, etc.

When I referred to the regulatory environment with respect to when we announced the reductions, it was to make the point that in Canada, the traditional broadcasters are saddled with significant regulatory requirements. BCE contributes close to $2 billion a year in regulatory fees. The Metas, the Googles, the Disney Pluses, the Paramounts and the Netflixes all operate in Canada. They generate billions of dollars in revenue from Canadian viewers and consumers, and they do not contribute any of that.

We need to face this last point. It's just a question of levelling the playing field. That's all.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

On that point, we know that this government brought in the Online Streaming Act, which is abolishing certain licensing fees, which will save the company about $40 million a year. There's the $100-million deal that was struck with Google, and $30 million of that is expected to go to broadcasters.

There is work being done on this front, but my larger point is that if it's just a profit statement we're looking at, what kind of world are we heading into? Does that mean that all local newspapers and local radio stations are going to close? Does that mean that eventually larger news carriers are going to close as well? How will people get information? Is it just going to be off TikTok and Instagram stories?

[Mirko Bibic]

In media, revenues are generated through subscriptions or advertising. We have to confront the fact that if we accept having the lion's share of advertising revenues going to the Googles and the Metas, etc., and they're not required to contribute anywhere near as much as the Canadian broadcasters are having to contribute, whether they are digital, print or television, there are going to have to be adjustments.

What we say is that we're open to competition, and Canadians should have a wide choice of news, entertainment content and sports content. All we've ever asked for, really, is to have a level playing field. Let everyone compete on the same terms, and we'll be happy to continue to make massive investments in entertainment content, sports content and news content.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

I want to make one last point. It's not really a question. I meet folks all the time who tell me that they know what's going on in Canada from my Instagram stories or my social media posts, and that fundamentally worries me, so I think it's food for thought for you folks to think about how news can actually reach individuals in the younger generations.

Thank you.

[Mirko Bibic]

I think that's so critical, and that's why we're making more investments pivoting towards delivering our news at every single point in time during the day on our digital platforms. That's exactly why we're making those investments towards digital.

[The Chair, Liberal, Joël Lightbound]

Thank you.

Mr. Perkins, the floor is yours.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Thank you, Mr. Chair.

Mr. Entwistle, I was fascinated by something in your presentation that you mentioned a couple of times. It was about the impact of spectrum. I think you said it was five dollars a month, on average, per cellphone bill. When he was here, Mr. Péladeau also talked about a similar number around roaming.

I'd like your opinion. What do you think it is for roaming? The CRTC mandated fees that I believe haven't been reduced in five years. What is the impact on a monthly phone bill thanks to the fact the government policy hasn't changed?