Industry Committee on Jan. 25th, 2023

[Tony Staffieri]

Absolutely. We have a commitment to affordability. My colleague Dean Prevost will walk through some of the plans, some of which we've already launched and will continue to launch, to improve connectivity as well as provide more affordability.

There are two principles that I would leave you with at the outset. We are committed to making investments in networks and infrastructure. That's what we do. As a business, we are aiming for better coverage and better quality for Canadians across the country. It may surprise you to know that we are the only wireless carrier that has a national network from coast to coast. That's what we do. We invest in networks.

In terms of affordability, we continue. We get up every day looking for more value-add for our customers. As I stated earlier, you've actually seen prices come down from Rogers over the last several years.

[Dean Prevost, President of Integration, Connected Home, Rogers for Business, Rogers Communications Inc.]

Thank you, Tony.

Let me add to that on two points. First, let's take affordability, which is so important, as Tony has said. Something that we're bringing to the table that did not exist before in western Canada is something we call Connected for Success. It has two key elements. One is low-cost, in fact substantially discounted at 70% to 80% off—

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you, Mr. Prevost. Unfortunately I have very limited time.

My second question is for Mr. McAleese, but first I would like to point out that as committee members, we appreciate all witness testimony. That includes from such witnesses as Anthony Lacavera, who appeared here earlier today.

I can't help but draw a contrast between Canadians struggling with affordability and seeing some of Canada's wealthiest families gain significantly from this transaction. Shaw employs thousands of Canadians. How are you ensuring that this deal benefits not only the owners of Shaw but also your own employees, who are also challenged by affordability issues?

[Paul McAleese]

Well, I think as the tribunal found and as was upheld yesterday, this is a very pro-competitive series of transactions. The recent CPI data that was released by Stats Canada last week demonstrates that we're seeing considerable advances in the affordability of telecom across the board. That, of course, applies to not just our employees but also Canadians writ large. I think our employees are representative of the broader Canadian population, which is seeing really material increases in the quality of the overall service.

It's often lost that while we tend to focus very specifically on pricing in the Canadian market, at the same time we're seeing massive advances in the quality of those networks, be it from 3G to 4G to 5G, or in the massive advances in the upload and download speeds available with our wire line. All Canadians get to take advantage of those advantages.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you, Mr. McAleese.

The floor is yours, Mr. Housefather.

[The Chair, Liberal, Joël Lightbound]

You have the floor, Mr. Housefather.

[Anthony Housefather, Liberal, Mount Royal, QC]

Thank you very much, Mr. Chair.

First of all, thank you for giving me some time, Viviane.

Mr. McAleese, I just want to echo Madam Lapointe's comments. I don't think attacking other witnesses is very appropriate.

By the way, it's nice to see so many Anthonys on the panel.

My first question is for Rogers. I want to ask a question about the NDA that Globalive talked about. I used to be the general counsel for a multinational. I'm very well aware of what NDAs are normally signed at the beginning of the process. Is it true that you asked Globalive in that NDA not to engage with government, and to identify to you and give you veto power over any investors in the transaction?

[Tony Staffieri]

As part of the divestiture process that we undertook, Rogers together with Shaw, this was a sale of Freedom wireless—a large, complex transaction—and as you would expect, we went through a very rigorous and comprehensive process to solicit bids and vet those bids relative to the criteria that the government set, and that they wanted to see, as a robust fourth wireless player.

It's standard, as part of that process, that all bidders sign standard NDAs, non-disclosure agreements, to prevent sensitive information from being disclosed. Those are standard, and—

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Staffieri, I understand very well that they sign standard NDAs. What I'm saying is that the elements identified by Mr. Lacavera in his testimony are not standard in the NDA at the beginning of this type of process. Is it true that the NDA required them not to speak with government, and to identify to you and give you veto rights on investors? That would not be in a standard NDA.

[Tony Staffieri]

The NDAs we deployed were standard NDAs that are used in the industry that all the other bidders signed in order to gain access to sensitive information in the data room. They are very standard in the industry, and those are the ones we deployed for this sale process, for all the bidders, as I said.

[Anthony Housefather, Liberal, Mount Royal, QC]

Did the other bidders sign your standard NDA with no changes?

[Tony Staffieri]

There were very minor changes, if any. Today we stand here looking at two transactions, one of them being Videotron acquiring Freedom wireless. Mr. Péladeau can speak to the NDA he signed, which is the standard NDA that all the other bidders signed.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Housefather.

You have the floor, Mr. Lemire.

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

Mr. Chair, let me begin by saying that it would have been very interesting to have Telus representatives here with us today. I had asked the clerk to invite them, so if they are not here they must have declined our invitation.

Mr. Péladeau, my next question is for you.

When you purchased Freedom Mobile, you received mandates and promised many results, such as reducing prices by about 20%.

Can those mandates really be fulfilled?

How can we be sure of your willingness and ability to fulfill those promises, which many people have called into question, especially today?

[Pierre Karl Péladeau]

Thank you, Mr. Lemire.

There are not 42 ways to succeed and we know full well that the issues surrounding rates are extremely important to the success of a company.

In Quebec, we have certainly had a range of services: cable distribution, Internet, landline telephone and wireless telephone. To achieve our current share of more than 23% of the market, we offered Quebeckers prices below the industry norm.

That is especially true since we launched Fizz, a fully digital network, as I mentioned in my opening remarks, which is cost-effective and less expensive than our main brands. That is certainly the strategy we will use for the regions and markets that Freedom Mobile currently covers and for the markets it could cover in the years or decades ahead.

So we will indeed reduce rates and use innovation and client service, which is so important, in order to be as successful as we have been in Quebec over the past 10 or 15 years.

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

What guarantees can you offer the minister or the public that you will live up to your commitments?

You said that public policies have changed recently and are now more favourable to competition, which will allow you to keep rates low.

What would prevent you from lowering your rates in Quebec now?

[Pierre Karl Péladeau]

Our rates in Quebec are among the lowest in Canada. Let me give you some examples. For the same cellphone with six gigabytes of data, our subsidiary brand, Fizz, offers a bundle at $39 per month in Quebec and $45 in British Columbia, Alberta and Ontario. Virgin, Bell's subsidiary brand, offers the same package at $65 per month in Quebec and $80 per month in the other provinces.

I find it amusing to look at Canadian newspapers, especially the Postmedia ones—they all look the same. Bell places the same ads as in Quebec, the only difference being the price. It is $15 to $20 cheaper in Quebec.

Such a significant price gap, which ranges from 20% to 35%, means that all the players need to offer products that grab people's attention. Our low prices and client service have enabled us to reach our current market share.

This is not an original strategy. It is used all over the world and in all kinds of industries. We do not claim to be very original. On the other hand, I think our approach is very successful.

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

I am curious about something. You bought VMedia in August. The tribunal viewed that as proof of your ability to expand and be competitive.

How could VMedia help you achieve your objectives?

[Pierre Karl Péladeau]

VMedia is a provider of Internet services and of regulated and unregulated television services that is already present in various regions, including Vancouver, Alberta, Manitoba and Ontario. We thought it would certainly be an asset for us to group a number of products together, as we have successfully done in Quebec, by offering what we call bundles.

The acquisition of VMedia gives us the opportunity to do that. In accordance with the requirements for companies that purchased spectrum at the last auction, we are required to build a network in the next seven years that will enable VMedia to transition from a mobile virtual network operator to a company with its own network. We have always considered that an asset for the company and a sign of success.

As I said, we branched out into wireless services in 2006 on the Rogers network, with the intention of taking part in auctions, purchasing spectrum and building a network. That is what we have done and why we still today have the largest market share of new subscribers in Quebec.

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

Thank you. My time is up.

I would also point out that Abitibi-Témiscamingue is not currently served by Videotron and that, when you plan your expansion, it would be helpful if you could create competition elsewhere in Quebec.

[Pierre Karl Péladeau]

Thank you, Mr. Lemire, allow me to correct you.

On the contrary, we have launched a third-party internet access or TPIA service on the Bell network, since Bell has a monopoly in Abitibi. We intend to build our own network and then migrate our current customers who have the TPIA rate to that network, as we do for all our clients in Quebec.

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

Thank you very much.

[Pierre Karl Péladeau]

You're welcome.

[The Chair, Liberal, Joël Lightbound]

I would feel lost at the Standing Committee on Industry and Technology if Mr. Lemire did not mention the situation in Abitibi-Témiscamingue at least once, which is his role.

Thank you, Mr. Lemire.

Mr. Masse now has the floor for six minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you so much, and thank you to the witnesses for being here.

As the New Democrat on this committee for 15 of my 20 years in Parliament, I've seen a lot of companies come and go. I've seen a lot of promises being made. I want to remind the public, in the process here, that having the tribunal panel was a political decision. It was made by legislation. It's not a pure system by any means; it's an appointed process.

To hammer that point through, under Bill C-27 this committee will also have to consider another tribunal creation, which could potentially undermine the Privacy Commissioner. I want to make it clear that upholding the tribunal's decision is not independent of politics in itself. It's shaded in its birth of being part of political decision-making. That's one reason I think the minister still has a lot of choices here.

I want to note a couple of quotes that I have here. Mr. Péladeau, in 2009 you said that in terms of spectrum, you didn't have any plan for now and you felt there's a great value that will become an even greater value.

In 2013, your colleague, Mr. Dépatie, said that as for the spectrum, Quebecor had acquired Ontario, Alberta and British Columbia and “could not pass up the opportunity” to acquire high-value spectrum at such an attractive price. That was a carve-out that was done specifically.

Lastly, another of your colleagues, Mr. Dion, said, “Today's licence acquisitions [in Ontario, British Columbia and Alberta] continue our strategy of buying spectrum at advantageous prices, mainly to support Videotron's operations in Quebec.”

From that time period, you didn't provide a lot of rollout. Even ISED noted that you left 83% of rural residents in the area with no coverage.

During this process we've had COVID, where this is very serious for other businesses and also to the pocketbooks of people. Also, the areas of schools, business and telehealth were left without competition. They were left with higher prices, and sometimes they were left with no services.

My question to you is this. What makes us believe that now, at this point in time, you're actually going to be in the race and you're actually going to compete?

When there's no actual way for us to follow through with any type of punishment if you don't, what makes it comforting for those people who were left behind when Quebecor didn't act on the spectrum it acquired? More importantly, it actually acquired income and revenue from that spectrum that was provided for it.

It's a situation that I think is pretty serious. It's one that has to be answered to, because if we are going to have a disrupter—that's what the tribunal noted—it has to be one that will actually be in place and be forward-thinking.