Madam Speaker, I am pleased to speak today to the second reading of Bill C-57, an act to issue a broadcasting licence to Bell Canada to allow it to compete in the cable industry.
What is at stake here with the bill is not the principle of deregulation as such, but the results obtained as opposed to the results expected by the minister responsible for the communications sector.
You will recall that, when the Liberals formed the federal government in 1993, they promised to pursue the deregulation objective in the telephone industry and the communications sector. They promised especially that, with this deregulation, consumers in Quebec and Canada as a whole would end up benefiting from reduced rates. However, since this deregulation objective has been set into motion, the effects have been totally the opposite.
Far from arriving at a reduction of these rates, we were confronted with rate increases, even in the sector where they had promised the most reductions in communications rates, that is long distance rates.
Data have been checked out. Since 1992, most residential subscribers, mainly those of Stentor, which is a partner of Bell Canada, have not seen one cent of reduction in the long distance rates. Not one cent of reduction since 1992, while they were promised, especially in the long distance market, a substantial reduction of these rates.
The only ones whose long distance bills went down are the major consumers, most of which are large corporations concentrated in major urban centres such as Montreal and Toronto.
Everywhere else, all regular customers in Quebec, all the people who voted for this government in Canada and for the Bloc Quebecois in Quebec did not see a penny in reduction in long distance rates. As for local rates, the situation is almost disastrous. Not only has there been no reduction in rates but, by deregulating left and right and promising just about anything, they compromised the basic principle of cross-subsidizing telephone services.
Under the cross-subsidization principle, operating surpluses generated in major urban centres, especially for long distance, were used to subsidize local service, which, in some small communities throughout Canada, costs more than in major centres.
The cross-subsidization principle was replaced by that of rate rebalancing. What was the result of this rate rebalancing? Since 1994, basic telephone service rates have risen by $2 per month, per year, over three years. In other words, in three years, the monthly bills of consumers in Quebec and Canada will be $6 higher than if the principle of cross-subsidization had been maintained.
The most outrageous in all of this is that Bell Canada is taking advantage of these CRTC rulings, which Bell Canada itself contributes to since it provides documentation to the CRTC. Bell has a range of experts who do not carry as much weight as consumers or their representatives. But, instead of using these higher revenues taken from the pockets of consumers to remain competitive or modernize, Bell uses them to increase its stockholders' rate of return.
Mr. McLennan, the president of Bell Canada, made no bones about it. He was quoted in the December 21, 1995 edition of Le Devoir as saying as that the rate increases approved by the CRTC would result in a 1 per cent increase in the rate of return of stockholders' equity for the year 1996.
This is not modernization. Bell Canada is taking advantage of increases authorized by the CRTC to dig into the pockets of consumers and increase the return on investment of its shareholders. In fact, a spokesperson for the Fédération nationale des associations de consommateurs had this to say at the time: "Canadian households will have to pay more than $1 billion in increases over the next three years for the telephone companies to achieve the level of profits they are hoping for".
In other words, deregulation, CRTC decisions, what the minister says, his policies and directions, all that is not designed to serve consumers, as he claimed, nor to reduce long distance rates for the average consumer or local rates, but to increase all these rates and take out of the pockets of consumers the money Bell Canada needs to sweeten the package offered to its shareholders.
I find that absolutely despicable. Especially given that Mr. McLennan was going around this year forecasting $700 million in net profits for Bell Canada, or a 40 per cent increase over last year's profits.
Now, they have the gall to ask for more rate increases to be approved, so that they can fill their pockets even more, with the blessing of the minister, who keeps talking about abstract and vague concepts and does not bother to monitor the impact of his decisions and directions.
When you are looking to deregulate and ensure that communications systems meet the needs of the 1990s, into the next century, as my hon. colleague so aptly pointed out, you must ensure at the same time that a procedure is in place to follow up and monitor what is going on in terms of price increases. Soon, with such increases for basic telephone services, andother services too, communications will become a luxury item. Average families will no longer be able to afford these services.
Bell Canada and its competition offer an incredible range of services. But, as the hon. member for Portneuf said, who will be able to use these services?
This issue raises a lot of questions. Here is another example of rate increase based on deregulation without monitoring, as applied by by the minister responsible for communications: Last spring, Bell Canada asked the CRTC to increase the rates of its business clients located in small rural communities.
Some small businesses, referred to as VSBs or very small businesses, located in rural communities saw their basic rate jump from $44 to $54 per month, a $10 increase. This puts small businesses located in rural communities at a further competitive disadvantage, since the increase in densely populated areas, that is in major urban centres, was only $5. The increase imposed on small businesses located in rural communities is more than twice that of their competition in major urban centres.
This is not normal, particularly from a government that claims to support small rural communities and regional development. The government is killing entrepreneurship by playing a part in such decisions.
This is a serious matter. The Quebec vice-president of the Canadian Federation of Independent Business, Mr. Cléroux, condemned this decision made last spring regarding small businesses in rural communities. He said the situation of a number of these businesses is precarious, adding that such an increase would adversely affect their performance and could even threaten their survival. Such are the effects of this government's deregulation, a process which does not involve any monitoring and which is irresponsible.
When the industry asks the government to support deregulation, as we do, the government must monitor the situation and provide a framework. It must not let the situation turn into a free for all. It must not let anarchy set in. More importantly, it must not let the shareholders of Bell Canada, Stentor and all the others raid the pockets of consumers in Quebec and Canada. That is not the purpose of deregulation. The purpose is to have better service, service that is competitive and is more concerned with what consumers can afford than with making money for the richest shareholders in Bell Canada. It is not right.
Finally, last September 6, and I tell you this because it is a matter of great importance to me, Bell Canada had good news for us. I said to myself that any good news in the matter of deregulation brings with it news that is not so good, and I was right. Last September 6, Bell Canada announced that it was modernizing all its telephone and communication facilities in small municipalities in Quebec and Ontario.
I believe some 500 or 550 municipalities, including 300 in Quebec, were involved. This was good news, excellent news, because for years, municipalities and economic development corporations, as well as the federal government, have been pushing Bell Canada to modernize its exchanges. Why? You would be surprised.
At a time when the focus is on telecommunications, the very latest in service, the information highway, all these ultramodern services, you would be surprised to learn that over 300 municipalities in Quebec and over 200 in Ontario do not even have 9-1-1 service.
The networks are so antiquated that they do not have 9-1-1, and conference calls are not possible. The vast array of services offered by Bell Canada is not to be found in these municipalities. But the advertising is.
It is frustrating for people to receive advertising on a range of services with a 30 per cent discount on 10 ultramodern communications services offered by Bell Canada and to be told by head office that they are not entitled to these services, that they may not take advantage of the 30, 40, 50 and 70 per cent discounts because their system is completely behind the times, ready for the junk heap.
We were happy last September 6 at the marvellous news that Bell Canada was going to modernize its networks. At last, no more lives will be at risk. It is a serious matter when you do not have access to 9-1-1 service in communities. Situations can arise where citizens' lives are in danger and Bell Canada is doing nothing.
They are happy, except that there is a hitch, and it is this: Bell Canada will be passing on to these small communities the cost of modernizing the network in the form of a major hike in rates for local service. In other words, three municipalities elsewhere in Quebec, as in Ontario, located in urban or semi-urban areas, had their modernization paid for by all Bell customers, but those remaining, small rural communities, will have to cover the cost themselves. This is no small matter.
If I look at my riding, where two municipalities and parishes have these outmoded communications systems, monthly rates will increase by approximately $4. In addition to this $4, there are the increases already planned by Bell. I would remind you that they are talking of a $2 hike in 1996, $2 in 1997, $2 in 1998, which makes $6 more on local rates. Now another $4. Do you realize what this means over 25 months for telephone service charges? A rise of close to 100 per cent.
Is such a situation normal, when everywhere else with a high population density systems were modernized from the funding of the entire client base? Now they will be demanding a rate increase on a case by case basis to meet the costs of such modernization.
Small rural communities are required to be cost-effective, to fit in with the movement toward market globalization, to compete with major centres, as well as internationally, and so we end up with situations of discrimination such as this.
About a year and a half ago, a coalition for the modernization of Bell Canada service was formed in my riding. I would like to take this opportunity to acknowledge the hard work of that coalition, which may have prompted Bell Canada's decision to speed up modernization. No rate increases were called for, mind you.
Today, I would like to single out the following for their excellent work: the mayor of Saint-Hyacinthe, Claude Bernier, who is also reeve of the regional county municipality and one the key players in the coalition; Jean Messier, Mayor of Saint-Damase; Mr. Guillet, Mayor of the Parish of Saint-Damase; Mr. Adam, Mayor of the Village of Saint-Pie; Rosaire Martin, Mayor of the Parish of Saint-Pie. I salute, as well, Mario de Telly, Director of the Saint-Hyacinthe economic development corporation. I am grateful for their support and the strong stands they have taken in this matter for the greater good of their fellow citizens.
As I have said, this coalition had only one purpose: to obtain for a population marginalized by Bell Canada the broad range of modern services which technological advances have now made available.
Bell was not, however, ever asked to increase rates inordinately, as it did in the plan it submitted to the CRTC this past September.
We are calling for the government to get a little more involved in this situation, not only for the sake of Saint-Pie and Saint-Damase, but also for the other 300 Quebec and 250 Ontario municipalities. In the name of its deregulation policy, in the name of its communications policy, the government must require the CRTC not to allow any anomalies such as there are in Saint-Pie and Saint-Damase in my region, and in more than 300 other municipalities in Quebec and Ontario.
The government has to act responsibly, because you cannot treat people in rural areas like second class citizens. They have the same rights as everybody else, and they are entitled to the basic service provided by Bell Canada and other telephone companies. And they also have the same right as anyone else to the services provided by Bell Canada.
I was astonished to see Mr. McLennan announce at a press conference that Bell Canada would make a profit of $712 million this year and probably even more next year, which will mean more money for the shareholders. Meanwhile, after announcing this increase in profits and increased dividends for shareholders, he announced that in the course of the next 25 months, basic service rates in small rural municipalities would go up by 100 per cent.
Here we do not find compassion nor any concern for dealing fairly with the various regions in this country.
Sure, we want Bell Canada to modernize its equipment. Sure, we want deregulation which, if the minister does his job and if this government does its job, might improve rates for the consumer, but at the same time, we do not want small municipalities which are already at a disadvantage because of their location, compared with more centrally located areas, to be charged more by a big corporation that is federally regulated.
We hope the CRTC will respond to appeals from the coalition in my riding, and I mentioned some prominent members of the coalition earlier, and that it will require Bell Canada to use part of its $700 million in profits to modernize its equipment without gouging the consumer. I also speak on behalf of Quebec's 300 rural municipalities which are in the same boat as the municipalities of Saint-Pie et Saint-Damase in my region, since the UMRCQ, at its last convention, voted almost unanimously to pass a resolution along the lines of the coalition founded in Saint-Hyacinthe against rate increases to pay for updating facilities.
