moved that Bill C-17, an act to amend the Telecommunications Act and the Teleglobe Canada Reorganization and Divestiture Act, be read the second time and referred to a committee.
Madam Speaker, the government's agenda as outlined in the speech from the throne sets out the course it intends to take to ensure that Canada succeeds in the global knowledge economy of the 21st century.
The agenda sets out clearly the actions to be taken and the partnerships to be forged to ensure that Canada realizes its potential in this new economy.
One of the first priorities is to connect Canadians. The goal is to make Canada the most connected nation in the world, making sure that all Canadians can have access to the electronic highway and the information economy by the year 2000. This is perhaps the single most important action that government can take to ensure success in the knowledge based economy.
A national strategy designed to give access to the information and knowledge infrastructure will enable individuals, rural communities, and small and medium size businesses to find new opportunities to learn, communicate, trade and develop their economic and social potential.
Bill C-17 marks a major step in our strategy to connect Canadians to the information highway.
It is also a milestone in this government's strategy to encourage competition, innovation and growth in Canada's telecommunications industry, which plays a vital role in the knowledge economy and greatly contributes to the information infrastructure.
Today, the telecommunications industry accounts for 115,000 quality jobs and 3.36% of GDP. We believe it will be one of the key growth areas in the 21th century economy.
The purpose of Bill C-17 is to pursue the liberalization of Canadian telecommunications, which started more than 10 years ago and has already greatly benefited Canadians and Canadian telecommunications companies.
That liberalization began with the licensing of competitive cellular telephone service and moved forward with the privatization of Teleglobe and Telesat, the introduction of competition to long distance telephone service and the passage of the new Telecommunications Act.
Over the last two years, this process has been continued with the licensing of suppliers of new services, including personal communications services and local multi-point communication services. We have also been pursuing this liberalization agenda at the international level to promote global competition and new opportunities for Canada's telecommunications sector.
The bill before us today paves the way to implement an international agreement that Canada concluded last February. Members may remember that the Uruguay round of the GATT trade negotiations developed new trade rules for the services sector. These are known as the general agreements for trade and services, GATS.
Last February agreement was reached to extend the GATS to cover basic telecommunications. Following successful negotiations under the auspices of the World Trade Organization, 69 countries including Canada concluded an agreement to liberalize basic telecommunications services. These countries account for more than 90% of the world's $880 billion telecommunications market.
The GATS agreement on basic telecommunications covers basic telecommunication services, including voice and data but not broadcasting.
One of our key objectives during the negotiations was to gain access to foreign markets for Canadian telecommunications companies. This we have achieved. As a result, our telecommunications companies will have more secure access to major markets such as the United States, the European Union and Japan, as well as the developing markets of Asia and Latin America. The agreement also establishes a clear set of multilateral rules in a sector that previously had no rules. The dispute settlement process provides the necessary safeguards to ensure that countries respect their commitments.
Under the agreement, we will be making a few changes here, in Canada.
First of all, we will lift all restrictions on mobile services provided to Canadians worldwide using satellites belonging to foreign concerns.
We will put an end to Telesat's monopoly on fixed satellite services.
Our transparent and independent regulatory and competition regimes will be maintained.
We will also put an end to Teleglobe Canada's monopoly on international traffic and eliminate the special ownership restrictions imposed on this company, which prohibit any investment by foreign telecommunications companies.
We will authorize foreign concerns to have full ownership of international submarine cable landing facilities in Canada.
We will, however, maintain our general foreign investment regulations to ensure that the industry remain in the hands of Canadian interests.
Many of the changes we promised can be implemented by administrative means, while others require that legislation be passed. This bill provides the legislative framework required to make these changes.
Perhaps more important than these details is the overall objective to foster competition both domestically and internationally. Competition fosters innovation and innovation sparks the development of new products and services, more choice for consumers, job creation and economic growth.
Over the last 10 years Canada has made major strides in liberalizing its telecommunications industry, and the benefits to consumers and businesses have been impressive. For example, a study by the international consulting firm KPMG estimates that long distance telephone rates today are 55% below and traffic is 67% above what they would have been in the absence of competition in that market. Savings to consumers are in the billions of dollars. And the benefit is not just in services. Investment in switches and related hardware is estimated to be more than $2 billion higher than it would have been under monopoly conditions.
Our objective is to free Canada's telecommunications and information technology sectors to be more competitive and dynamic both at home and abroad. It was to further this objective that we became parties to the information technology agreement last year. About 40 economies with 90% of the world's trade in information technology have endorsed that agreement.
They have agreed to eliminate tariffs on some 300 information technology products by the turn of the century. Together these two agreements have significantly opened up the global marketplace in telecommunications services and equipment, creating new opportunities for all countries. As a result, Canadian telecommunications companies will be able to capture a larger share of the global market in telecommunications services and equipment.
The bill we are considering today will also strengthen our ability to keep pace with a rapidly changing telecommunications environment. We will be empowering the CRTC to introduce a licensing regime to ensure that all providers of international services play by the same rules. We are also strengthening our ability to enforce standards for telecommunications equipment.
We must pass this bill as rapidly as possible. The agreement on basic telecommunications services takes effect January 1, 1998. A good number of the amendments to our regulations do not take effect before October 1, 1998, but the new regime must be in place before then.
One of the amendments proposed in this bill will enable the CRTC to establish a licensing regime for telecommunications service providers. The CRTC will ensure that Canadian and foreign telecommunications providers hold licences consistent with WTO rules and Canadian regulations.
The CRTC has held public hearings on licensing and the whole issue of international services. If the CRTC is to be able to wrap up this process and introduce the new regulations by October 1, 1998, the bill must be passed without delay.
The bill also amends the Teleglobe Canada Reorganization and Divestiture Act so as to repeal the provisions concerning the special ownership and other regimes related to ending Teleglobe's monopoly. I wish to point out that Teleglobe approves of this initiative.
Changes to the Telecommunications Act are necessary for us to meet our commitments in the area of satellites, undersea cables and international services, and also to ensure observance of other Canadian telecommunications policies.
The benefits flowing from the GATS agreement are significant. We anticipate that Canadian businesses and consumers will gain access to a wide variety of world class telecommunications services at competitive prices. Canadian telecom service providers will be able to penetrate new markets on an equal footing with local companies and foreign competitors. Canadian telecom manufacturers will find a huge new demand for their state of the art products as telecom operators around the world prepare for a new global environment of open markets and competition.
Canadians want us to move quickly to realize the economic, social and cultural benefits of the knowledge based society. International agreements like the GATS agreement lay the groundwork for us to construct this society.
We are working on a number of fronts to build. For example, I have invited my OECD counterparts to come to Canada in the fall of 1998 for discussions to develop a global framework for electronic commerce. Electronic commerce means using advanced communications and computer technologies to do business. Its uses range from selling consumer products and services electronically to managing investments over computer networks, to transactions between major banks that involve large amounts of money and other assets.
Electronic commerce is not only central to a modern knowledge based economy, it is also the foundation for future growth and job creation. Given our small domestic market and dependence on foreign trade, we must foster a domestic and international environment that is friendly to electronic commerce if we are to reap the significant trade and investment benefits it offers to Canadian firms and citizens.
The OECD Canada conference is an important step in this direction. It ensures that we can support, participate in and influence the creation of an open, transparent, multilateral electronic commerce regime.
Our hope is that this conference will set out the policy framework and implementation timetable needed to establish a stable, open and transparent environment favourable to the development of worldwide electronic commerce. An integrated approach would allow all countries and regions to enjoy the benefits of electronic commerce while avoiding duplication of effort and the creation of new international trade barriers.
We need to do more if Canada is to be a leader in electronic commerce. That is why the government is also working toward using electronic commerce when doing business with its own clients. By being a model user we can encourage the private sector and other levels of government to adopt the new technologies.
Advances in information technologies are transforming industrial economies such as our own. Canada has the opportunity to be among the first rank of the new knowledge based economies.
As these new technologies eliminate distance they are taking us ever closer to the global village envisioned by Marshall McLuhan. They are also creating a world in which knowledge is our most important commodity and the key to our economic performance.
By overcoming the barriers of distance these technologies are creating great opportunities for people, communities and countries that were once on the periphery, from the developing nations of Asia, Latin America and Africa to Canada's own rural and remote communities.
Over the last four years, we have defined and implemented a information highway strategy, so that Canada can take full advantage of these technologies and so that all Canadians can have access to the information based economy.
This information highway will be Canadian and will offer Canadian products and services, but it will be open to the entire world. It will encourage innovation, economic growth, job creation and communication throughout Canada.
Our government's priority is to create the conditions necessary to encourage the private sector to build this information highway. Hardware and software suppliers, and designers of related contents and services are now among the fastest growing sectors in Canada.
Opening up competition in the telecommunications services sector represents an important component of the Canadian strategy. We know that the best, as well as the fastest, way to build an information based economy infrastructure is to institute an open competition policy.
We have the best overall communications infrastructure among the G-7 nations. We are among the leaders in terms of penetration, quality, market development and rates. For example, Canada tops the G-7 in proportion of households with personal computers. We have the lowest residential telephone and Internet access charges in the G-7. We have the highest rate of cable television subscribers in the G-7.
As we build the world's best communications infrastructure we have also built industries that sell knowledge based goods and services around the world. Our information and communications technology industries export to more than 90 countries. The sector is a leader in research and development, accounting for one-third of total industrial R and D in Canada.
These industries hold enormous potential for jobs and growth. Now that we have cleared the way for them to compete internationally that potential is growing even greater.
This legislation is a necessary step toward the continuing process of liberalizing telecommunications trade worldwide. I urge the House to act on it quickly and to secure for Canadians their entry into the global telecommunications marketplace.
