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PIAC comments on the telecommunications foreign ownership provisions in the budget

PIAC has been asked about the effect of the loosening of foreign ownership rules on Canadian subsidiaries in the telecommunications market. PIAC is not in a position to comment from the standpoint of matters such as employment, taxation, research and development, or cultural sovereignty. PIAC’s comments are directed to the possible effect on the position of the consumer in the telecommunications marketplace.

PIAC notes consumers have not been provided with lower prices and more choices by the major Canadian telecommunications players as promised when they were deregulated some three years ago through the actions of then Industry Minister Maxime Bernier in response to the lobbying of the big telephone companies. The budget changes are clearly directed to addressing this market and policy failure.

“New foreign entrants may may make for more competitive telecom markets with more efficient pricing and choice, particularly in markets where there is largely a duopoly between the old telephone company and the incumbent cable provider. But if relaxation of foreign ownership rules leads to takeovers and mergers of existing Canadian firms, we won’t get there. As well, more foreign competition won’t solve the problem of the need for enforceable rules ensuring consumer friendly standards and conduct by providers,” says Michael Janigan, executive director of the Public Interest Advocacy Centre.

 

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